Univision Communications Inc., the Spanish-language media giant, decided to put off a 2015 initial public offering due to poor performance of media company stocks and a sluggish market for first-time share sales.
The New York company, owned by L.A. media mogul Haim Saban (who, with a net worth of $3.9 billion, ranked No.15 this year on the Business Journal’s list of wealthiest Angelenos) and a group of private equity firms, agreed last week to leave Univision’s options open until early next year, the Wall Street Journal reported.
Michael Nathanson, an analyst at MoffettNathanson in New York, said given the situation in the media market, it’s hard to say when the company will return to the idea of holding a public offering.
“It has been a very tough year for media stocks and given those valuations, it’s hard to see why they’d want to go public now,” Nathanson said.
A Univision spokeswoman declined to comment.
Investors in media stocks have been spooked by a surprisingly steep loss of cable TV subcribers.
Univision, which has significant operations in Westchester, went private eight years ago after being acquired by Century City’s Saban Capital Group Inc. and others.
The company’s revenue climbed 11 percent to $2.91 billion last year while net income fell to $900,000 from $216 million in 2013, the latter apparently due to a noncash accounting charge tied to a write-down of programming assets, according to a report in the New York Times.
Univision has two broadcast TV networks, its flagship Univision channel and UniMas, which is aimed at younger viewers. It also operates nine cable networks including Galavision and Univision Deportes. Additionally, the company owns 122 television and radio stations in the United States and Puerto Rico.
For several years, the company’s investors, which include Madison Dearborn Partners and Providence Equity Partners, had been looking to offload the business. But Univision registered in July with the Securities and Exchange Commission, indicating the company was ready to move forward with its IPO plan at the end of this year.
Morgan Stanley, Goldman Sachs Group Inc. and Deutsche Bank Securities Inc. jointly handled the company’s proposed offering.
But then came the market turmoil.
In the second half of the year, media companies such as Walt Disney Co. and Time Warner Inc. saw their stock prices take a roller-coaster ride as the industry continues to see a decline in cable subscribers, particularly among millennial consumers who have chosen to view content online.
The practice, known as cord cutting, was documented in a survey last year of 2,400 consumers by Minneapolis research firm Frank N. Magid Associates Inc., which said that the vast majority of young adults 18 to 34 prefer to watch entertainment on a laptop, smartphone or tablet, rather than a TV. Additionally, 4 percent of cable subscribers 18 to 64 said they were “extremely likely” to cancel their pay-TV service in the next 12 months – an increase of 95 percent compared with 2011.
