Last week, the new owners named Joe Uva, OMD's president-CEO, to take over April 1 as CEO, ending wild speculation about a field of candidates rumored to include Mexico's ex-President Vicente Fox and U.S. Commerce Secretary Carlos Gutierrez. As both a buyer and a seller in his career at OMD and Turner Broadcasting Sales, Mr. Uva brings expertise and relationships that Univision needs to capture more of the ad dollars marketers spend with the English-language TV networks.
Mr. Uva, 51, succeeds A. Jerrold Perenchio, 76, who also steps down as chairman and a major shareholder after engineering the company's sale.
Ready to dump music
The buyers have already made it clear they will shed Univision's money-losing music division and radio stations not in the top 15 Hispanic markets. The company's core business is TV, accounting for 74% of 2006 net revenue of $2.1 billion.
When the deal closes, Mexican media giant Televisa will sell its 11.4% stake in Univision. But Televisa, Univision's biggest program supplier and a failed bidder to buy the company, isn't going away. The two companies are locked in escalating litigation on everything from program payments to precious online rights.
Univision spent $18.7 million in 2006 on litigation with Televisa, including programming payments made under protest, up from $10.8 million in 2005 and $4 million the year before. A federal trial, set to start in June 2007, may be postponed until October, according to the latest filed documents.
Much of the wrangling is over the long-term deal under which Televisa supplies programming including popular telenovelas to Univision until 2017, and whether Televisa is getting its fair share of ad-sales-derived revenue. But one of the most interesting battles is over online rights and who gets to distribute on the internet in the U.S. market the shows Televisa creates and Univision airs to U.S. Hispanics.
Televisa started a big online push in Mexico late last year, offering more than 3,000 free videos on its site and the chance to watch its shows online. But online users in the U.S. who try to download video from Televisa's Esmastv.com.mx are blocked and see only the bilingual message, "We're sorry but at the moment our service isn't available in your country."
Writs are Flying
When Televisa and Univision negotiated program sales years ago, online rights weren't an issue. But now the writs are flying as an irked Televisa tries to establish U.S. online rights while Univision blocks every move. For Televisa, already Mexico's dominant media player, the U.S. is its biggest growth opportunity.
Some analysts think with Mr. Perenchio gone, there could be more room for negotiation. "Televisa's main beef has been with Perenchio," said David Joyce, a media-equity analyst at Miller Tabak & Co.
One loose litigation end has just been tied up. Univision agreed to a consent decree with the Federal Communications Commission to pay a $24 million fine for failing to provide enough educational children's programming. The FCC didn't buy Univision's argument that its novelas should count as educational for kids, not even the one about 11-year-old twins separated at birth who later switch identities.
At OMD, Mr. Uva apparently will not be replaced. Daryl Simm, head of Omnicom Media Group, will assume Mr. Uva's OMD duties, with the media agency's regional bosses reporting into him.