Los Angeles billionaire A. Jerrold Perenchio on Thursday waved adios to the business he has spent nearly 15 years building into the nation's foremost Spanish-language media company, Univision Communications Inc.
As expected, the sale of the Century City-based company for $12.3 billion closed Thursday, two days after winning the blessing of the Federal Communications Commission.
For The Record
Los Angeles Times Saturday March 31, 2007 Home Edition Main News Part A Page 2 National Desk 1 inches; 39 words Type of Material: Correction
Univision ownership: An article in Business on Friday about the change in ownership of Univision Communications Inc. named Saban Entertainment Group as one of the investors that acquired the Century City company. The entity is called Saban Capital Group.
The new owners, a consortium of investors including another Los Angeles billionaire, Haim Saban, paid $36.25 a share to buy out Univision stockholders, taking the company private.
The 76-year-old Perenchio -- a former talent agent, boxing promoter, and music, TV and movie producer -- collected $1.3 billion for his 11.5% stake.
That's a hefty return on the $33 million that Perenchio paid when he joined two Latin American media moguls to buy Univision from Hallmark Cards Inc. in 1992 for $550 million.
Since then, the Latino population has grown to more than 42 million in the U.S. today. The company's flagship, Univision, has become the nation's fifth-largest television network, behind CBS, Fox Broadcasting, ABC and NBC.
Under Perenchio, Univision added a second broadcast network, TeleFutura, and expanded into music production, radio and the Internet.
In June, four private equity firms -- Texas Pacific Group, Providence Equity Partners, Madison Dearborn Partners, Thomas H. Lee Partners -- and Saban Entertainment Group agreed to pay $13.7 billion for Univision, which includes the company's $1.4-billion debt.
The transaction was highly leveraged, with the group, which calls itself Broadcasting Media Partners Inc., financing as much as $10 billion, according to regulatory filings. The four private equity firms each contributed $914 million, with Saban chipping in $300 million.
Perenchio was traveling and could not be reached for comment Thursday. In a written statement, he said, "I am enormously proud of all that Univision has accomplished since 1992 and look forward to following the next phase of its growth."
Thursday's closing also drew to a close another chapter of Univision's ownership by the descendants of Emilio Azcarraga Vidaurreta, a Mexican entrepreneur who helped launch the company with the acquisition of a San Antonio TV station in 1961.
His son had to sell the company in 1986, in part because of regulatory concerns over foreign ownership.
The son, Emilio Azcarraga Milmo, reclaimed a stake in Univision when he became Perenchio's partner in the firm's 1992 acquisition. Last year, Azcarraga Milmo's son, Emilio Azcarraga Jean, and his company, Grupo Televisa, made a bid for Univision but lost. Thursday, Televisa sold its shares for $1.09 billion.
However, Televisa programming will continue to define Univision. Under a contract fashioned by Perenchio, Televisa must continue to supply its popular \o7telenovelas \f7to Univision through 2017.
Some analysts say the new owners' ability to play nicely with Televisa will be key to Univision's continued success. Others believe that they should wean themselves off Televisa programming, which might prove difficult given the debt the new partners have taken on.
"They need to focus on being a content provider," said Julio Rumbaut, a Miami-based media consultant. "Distribution vehicles are no longer as valuable as content in this digital age. They need to concentrate on convergence and the Internet to become more like a Time Warner or NBC Universal."
Several of Perenchio's key lieutenants, including Chief Operating Officer Ray Rodriguez, Chief Financial Officer Andrew W. Hobson and General Counsel C. Douglas Kranwinkle, are expected to stay on despite the ownership change.
Last month, the new owners hired a top advertising executive, Joe Uva, to be Univision's chief executive.