NEW YORK — Mexico's Grupo Televisa SAB said Tuesday it will invest $1.2 billion in New York-based Univision Communications in exchange for a minority stake, expanding cooperation between the Spanish-language media heavyweights.
The deal brings an end to long-standing legal disputes between the companies, recently over privately held Univision's rights to distribute Televisa's programs online and to phones. It also helps Televisa strengthen its foothold in the U.S., an important market as the company works to widen its reach beyond Mexico.
Televisa will contribute its 50 percent stake in its TuTV joint venture with New York-based Univision. In exchange, it will get a 5 percent stake in Univision, as well as debentures convertible into another 30 percent stake in the future. It will also have the option to buy another 5 percent stake in Univision, bringing the total to a possible 40 percent stake. That would, however, require a change in U.S. law to allow a foreign company to own more than 25 percent of a U.S. broadcaster.
As part of the deal, Univision will now have exclusive U.S. rights to distribute Televisa's programs online, for cell phones and for video-on-demand services.
The companies signed a 25-year contract in 1992 that gave Univision the exclusive U.S. broadcast rights to shows made by Grupo Televisa. The latest agreement extends that license deal to 2020 from 2017, and "at least" 2025 if certain conditions are met, the companies said. In exchange, Televisa will receive higher royalty payments from Univision.
The companies said three Televisa representatives will join Univision's board, which will increase to 20 members.
The deal "fully aligns the interests of Univision and Televisa for the long-term," said Saban, chairman of Univision, in a statement.
Grupo Televisa tried to buy Univision in 2007, but lost out to investor group Broadcasting Media Partners Inc., which includes billionaire entertainment mogul Haim Saban.