Skip to main content
Select Source:

Univision Communications Inc

Univision Communications Inc.

1999 Avenue of the Stars, Suite 3050
Los Angeles, California 90067
U.S.A.
Telephone: (310) 556-7665
Fax: (310) 556-7615
Web site: http://www.univision.com

Public Company
Incorporated:
1961 as Spanish International Communications Corp.
Employees: 4,200
Sales: $1.92 billion (2005)
Stock Exchanges: New York
Ticker Symbol: UVN
NAIC: 513120 Television Broadcasting; 513220 Cable and Other Subscription Programming; 513111 Radio Networks; 513112 Radio Stations; 514191 On-Line Information Services; 334612 Prerecorded Compact Disc (Except Software), Tape, and Record Reproducing; 512220 Integrated Record Production/Distribution; 512230 Music Publishers; 512240 Sound Recording Studios

Univision Communications Inc. owns and operates an ever increasing group of media companies, including Univision and TeleFutura, the leading Spanish language television networks in the United States; Galavision, a Spanish language cable network; dozens of radio stations and several record companies as part of Univision Music Group; and the burgeoning web-based entertainment of its Univision Online division. With Hispanic television viewership on the rise, Univision has captured more than three-quarters of this growing demographic, regularly defeating ABC, CBS, NBC, and Fox programming in markets with Spanish-speaking households. Though Univision Chairman A. Jerrold Perenchio was looking for a buyer, Univision remained solid with soaring stock prices and revenues of just under $2 billion annually.

SPANISH LANGUAGE PIONEER:
196085

Univision began in 1961 as Spanish International Communications Corp. (SICC), founded by Rene Anselmo, with the purchase of KWEX-TV in San Antonio, Texas. The Massachusetts-born Anselmo had worked in Mexico for Emilio Azcárraga Milmo, president of Telesistema Mexico (later Grupo Televisa), which indirectly provided SICC with 20 percent of its financingthe legal limit on foreign control of a television stationand all of its programming. Anselmo also became head of the Spanish International Network (SIN), established to handle advertising sales for the stations. The SIN eventually became a full fledged network with more than 350 affiliated stations, with Telesistema Mexico holding 75 percent and Anselmo owning the remaining 25 percent (because limits on foreign ownership of television stations did not extend to television networks).

The joint venture of SICC and SIN almost single-handedly established Spanish language television in the United States. By the autumn of 1968 SIN had added KMEX-TV in Los Angeles, WXTV in New York City, and KPAZ-TV in Phoenix to its holdings. All of these were UHF stations. Along with a non-SIN UHF station in Chicago, they constituted the only television stations in the United States broadcasting exclusively in Spanish. Five Mexican stations also belonged to the network.

During the 1970s the Spanish-speaking population of the United States increased seven times faster than the population at large. In 1976 SIN became the first network to deliver its signal by earth satellite. Paying $1.5 million for a transponder on Western Union's We-star II satellite, SIN was able to increase its potential outlets and pick up direct transmissions from abroad, while markedly reducing its transmission costs.

Communications satellites greatly enhanced SIN's capabilities, enabling it to reach about two-thirds of all Hispanics in the United States by 1980, beaming 100 hours of weekly programming to 10 over-the-air stations, 21 cable systems, and hundreds of cable television systems. By 1982 all but two of the 35 all-Spanish television stations in the United States were receiving programming from SIN. About 55 percent of the programming came from Televisa, with the other 45 percent produced in the United States. The fare included news, variety shows, World Cup soccer, and the wildly popular soap opera series known in Latin America as telenovelas. By 1978 SIN's revenues were estimated at $10 million. The following year, 1979, SIN launched Galavision, a commercial-free pay cable television service in Spanish with programming beamed by satellite. First offered in Arizona, Colorado, New Mexico, and Florida, the Los Angeles-based network had 60,000 subscribers in early 1981 and more than 100,000 in early 1984. Featuring films, sports, and telenovelas, it was offering 14 hours a day of programming in early 1984.

Galavision's launch did much for SIN's bottom line, as revenues for 1980 had climbed to $20 million, and to $45 million for 1984. SICC, whose revenues came to about $90 million in 1985, also owned a string of Spanish language radio stations.

SUBSEQUENT OWNERSHIP

In 1986 a Federal Communications Commission (FCC) administrative law judge refused to renew the licenses of the SICC stations, ruling they were under the control of Azcárraga and his relatives in violation of the 20 percent legal limit on ownership by foreigners. As a result, SICC sold its ten TV stations in 1987 for roughly $300 million to Hallmark Cards Inc. and its minority partner, First Chicago Venture Capital. A new firm was established to oversee operations, called Univision Holdings Inc. By the terms of the sale, SIN, which was renamed the Univision Network, was to provide all of the programming.

COMPANY PERSPECTIVES

Univision Communications Inc. is the premier Spanish language media company in the United States. Its operations include Univision Network, the most watched Spanish language broadcast television network in the U.S. reaching 98% of U.S. Hispanic households; TeleFutura Network, a general interest Spanish language broadcast television network, which was launched in 2002 and now reaches 86% of U.S. Hispanic households; Galavision, the country's leading Spanish language cable network; Univision Television Group, which owns and operates 62 television stations in major U.S. Hispanic markets and Puerto Rico; Univision Radio, the leading Spanish language radio group which owns and/or operates 69 radio stations in 16 of the top 25 U.S. Hispanic markets and 4 stations in Puerto Rico; Univision Music Group, which includes Univision Records, Fonovisa Records, La Calle Records and a 50% interest in Mexico-based Disa Records labels as well as Fonomusic and America Musical Publishing companies; and Univision Online, the premier Spanish language Internet destination in the U.S. located at http://www.univision.com. Univision Communications also has a 50% interest in TuTv, a joint venture formed to broadcast Televisa's pay television channels in the U.S., and a non-voting 14.9% interest in Entravision Communications Corporation, a public Spanish language media company. Univision Communications is headquartered in Los Angeles with television network operations in Miami and television and radio stations and sales offices in major cities throughout the United States.

Galavision became a basic cable network in 1987 and in 1989 was on some 300 cable systems in 12 states and the District of Columbia. Its 24-hour-a-day fare of news, entertainment, and variety shows was supplied by Televisa and appeared to be aimed primarily at Mexican Americans. Like SIN, Galavision was 75 percent owned by Azcárraga and other principals of Televisa and 25 percent owned by Anselmo. Galavision and a dozen other companies operated under a U.S. subsidiary of Televisa called Univisa. In 1988 Hallmark purchased a majority stake in the Univision Network for $265 million. Revenues of Univision Holdings, including its network subsidiary, came to about $150 million for the year.

Under the direction of William Grimes, formerly chief executive of ESPN Inc., Univision launched Spanish language clones of such English language shows as Saturday Night Live, Entertainment Tonight, The People's Court, the Oprah Winfrey and Phil Donahue talk shows, and the 20/20 celebrity magazine-format program. It hired 16 more news correspondents and became noted for its coverage of Latin American hot spots, including the wars in El Salvador and Nicaragua. Its most popular offering, however, remained, Sabado Gigante (Giant Saturday), a three-hour combination variety-game-talk show, and the new programs it introduced were not as popular as the Televisa-made telenovelas they supplanted.

Univision and rival network Telemundo suffered from low advertising bookings; although Hispanics made up eight percent of U.S. residents in 1989, the Spanish language networks received only about 2 percent of the $11 billion the Big ThreeCBS, NBC, and ABCcollected in revenue from commercials. Univision reportedly lost about $50 million in 1989. Hallmark had taken on $555 million in debt to buy the stations and network, nearly half of it in the form of high-yielding junk bonds issued by Univision Holdings. When this subsidiary missed interest payments on the bonds in early 1990, Hallmark bought them back from the holders, but at a deep discount, paying only about 49 cents on the dollar. In 1992 Hallmark sold Univision Holdings for $550 million to investors which included former owner Emilio Azcárraga Milmo and A. Jerrold Perenchio.

By 1992 Univision had annual revenues of more than $200 million, 13 Spanish language television stations, and a potential audience of 90 percent of the nation's Hispanic households. Perenchio, a non-Hispanic producer of TV shows who had owned and operated Spanish language television stations, made his purchase in partnership with Grupo Televisa and Venevision, Venezuela's largest broadcasting company. Perenchio took the reins as president, chief executive, and chairman of the board, owning 75 percent of the station group and 50 percent of the network, with the foreign companies splitting the remainder of each. The foreign investors also received warrants enabling them to acquire 50 percent of the station group if U.S. laws were changed to permit greater foreign ownership of broadcast outlets.

This sale was approved by the FCC despite protests by Telemundo and three Hispanic groups who feared Univision would end production in the United States (where it was producing 41 percent of its programming in Miami) and farm all of its programming out to Televisa and Venevision. When Univision dropped three U.S.-made shows in 1993 (replacing two of them with Mexican programs) and fired 70 people who worked on them, critics of the network felt their misgivings were confirmed. Within several years Televisa and Venevision were providing Univision with 92 percent of its programming. At the end of 1993, Univision's revenues had reached $104.7 million.

GROWTH AND EXPANSION

As a subsidiary of Univisa, Galavision had not been included in the sale to Hallmark, but it was acquired by Univision in July 1996. The cable network offered such attractions as classic movies, original series, and exclusive rights to sporting events, including baseball's Caribbean World Series and Mexican League soccer championship games. In September 1996 Univision completed an initial public offering at $23 a share and raised over $200 million. Univision's revenues for the year totaled $459.7 million with net income of $82.6 million.

KEY DATES

1961:
Spanish International Communications Corporation (SICC) is founded in Texas.
1976:
The Spanish International Network, SICC's partner, begins transmitting via satellite.
1979:
Galavision, a pay cable commercial-free service, is launched.
1987:
Univision Holdings, Inc. and Univision Network are established by Hallmark, Inc.
1992:
Hallmark sells Univision to A. Jerrold Perenchio and investors for $550 million.
1996:
Univision Communications becomes a publicly traded company.
1999:
Univision Online and Univision.com are launched.
2000:
The company announces it will buy 13 television stations from USA Network.
2002:
Company revenues top the $1 billion mark for the first time.
2004:
Univision's acquisition of the Hispanic Broadcasting Company is completed.
2005:
Relations are strained with partner Televisa and Univision puts itself up for sale.
2006:
A group of private investors agrees to buy Univision for $13.7 billion.

By 1997 Univision's share of Spanish language television viewing in the United States had grown to 83 percent. Several acquisitions, including stations in Chicago, Houston, and Sacramento gave Univision 13 full power over-the-air UHF stations, including 12 in the top 15 metropolitan areas with high percentages of Hispanic households. Each ranked first in viewership, as did all of Univision's full power affiliated stations. Gala-vision, the company's cable operator, reached about 2.5 million of the 4.4 million Hispanic households wired for U.S. cable service. A deal with Home Shopping Network led to the formation of the Spanish Shopping Network, available on Galavision.

Galavision was supposed to connect with younger, bilingual, or English-dominant U.S. Hispanics; a prominent producer told a Los Angeles Times reporter, "In a lot of Latino households, mom and pop are at one TV set watching telenovelas and the kids are at another set watching Moesha or Friends. " Galavision began targeting this market segment with two new English language shows aimed at Hispanics: Café Olé with Giselle Fernandez, including crossover Latino actors as celebrity guests, and Funny Is Funny, an all-comedy half-hour series hosted by comedian Carlos Mencia.

In 1997 Univision founder and shareholder Emilio Azcárraga Milmo, who ran Grupo Televisa, passed away and was succeeded by his ambitious son Emilio Azcárraga Jean. Azcárraga Jean, as a major stockholder in Univision, did not see eye to eye with Perenchio, who remained Univision's CEO and chairman but had brought in Henry Cisneros as president and COO. The popular Cisneros, former mayor of San Antonio and U.S. Secretary of Housing & Urban Development, gave Univision's image a boost until he was indicted for lying to the FBI regarding a former mistress (Cisneros later pled guilty to a lesser charge). In 1998 Univision signed an agreement with online portal Ask Jeeves (later renamed Ask.com) to develop a Spanish version of the search engine. Revenues for the year topped $577 million and helped finance the company's launch of Univision Online and an interactive web site, Univision.com. Revenues for 1999 jumped to $693.1 million, a year in which Univision's workforce grew to 1,850.

A NEW CENTURY

By the new millennium Univision was riding high; it dominated Spanish language television programming and saw both its revenues and stock prices surge. At the end of the summer stock prices hit a phenomenal high of over $124 per share, but then tumbled with the announcement of Cisneros's departure and a less than expected increase in ad revenues. Univision also had to contend with growing tension between Azcárraga Jean and Perenchio, even after Televisa had sold the majority of its stake in Univision the previous year. Rumors flew about disputes, lawsuits, and market share as rival Telemundo gained financial backing from Sony and Liberty Media. With the flow of new capital, Telemundo hoped to topple Univision from its berth atop the Hispanic programming throne.

At the end of 2000 Univision bought 13 television stations from mogul Barry Diller's USA Broadcasting Group for $1.1 billion, reinforcing its dominance of the Spanish language media industry. In 2001 Univision segued into music with the establishment of Univision Music. The new company's holdings included a majority stake in Disa Records and Fonovisa Records, bought from Grupo Televisa for over $200 million, and entered into a joint venture with Universal to distribute music by Spanish artists in the United States and Puerto Rico. The next step in Univision's media expansion was the purchase of the Hispanic Broadcasting Corporation (HBC) for $3.4 billion, and the creation of Univision Radio. With the merger, Univision possessed two of the biggest Hispanic record companies, 54 radio stations, 55 television stations, and 43 affiliate stations. Revenues for 2000 and 2001 totaled $863.5 million and $887.9 million, respectively.

Part of the HBC acquisition and merger included 27 percent of Spanish language broadcasting company Entravision Communications Corporation. To gain FCC approval, Univision agreed to reduce its ownership in Entravision to 10 percent to avoid trust issues in the United States. In 2002 Univision formed TeleFutura, a new Spanish television network in the United States, with Televisa buying a sizeable (12 percent) chunk. Univision ended 2002 with record breaking revenues of $1.09 billion and net income of $86.5 million.

By 2004 the merger with HBC had been completed and any goodwill between Univision and Televisa had turned into an all-out war for domination of the Spanish language television and radio markets. The long relationship between the U.S.-based Univision and Mexico-based Televisa had degenerated into mudslinging and lawsuits. In May Azcárraga resigned from Univision's board and filed suit against his father's former company over unpaid royalties. It was also said Azcárraga had wanted to be Univision's new president, but Perenchio had chosen the Cuban-born Ray Rodriguez. Azcárraga not only turned to the courts but threatened to yank programming, which constituted the majority (more than a third) of Univision's broadcasts, including the wildly popular telenovelas.

TURF WARS, 2005 ONWARD

While Univision continued to gain ground in the United States, Televisa had plenty of room to grow in its top market, Mexico. The young Azcárraga, however, was not content to rule the airwaves in Mexico alone, and was determined to carve up the ever expanding Hispanic market in the United States. Latin Finance likened the battle to "Old Guard v. Young Turk," in a June 2005 article, believing the legal actions and feud would only hurt both Televisa and Univision. If Televisa won its lawsuit over royalties, its long-term programming relationship with Univision would cease; Televisa would lose millions in future royalties and Univision would lose a significant portion of its most popular shows.

By late 2005 Televisa's legal action had expanded from royalty disputes to breach of contract. Univision countersued and announced it was seeking investors or an outright buyer. Azcárraga, of course, wanted to acquire Univision and wielded his legal action as a means to scare away potential suitors. In 2006 Univisionwith its TeleFutura network, cable programmer Galavision, 69 radio stations, 62 television stations, several record labels, Univision Online, and commanding dominance (more than 85 percent) of Hispanic broadcastingwas considered an excellent opportunity for the right buyer. In September an investor group including Madison Dearborn Partners, Thomas H. Lee Partners, Providence Equity Partners, Texas Pacific Group, and Saban Capital Group agreed to buy the company for a reported $13.7 billion. The deal was expected to be completed by the spring of 2007.

Robert Halasz

Updated, Nelson Rhodes

PRINCIPAL SUBSIDIARIES

Entravision; Galavision, Inc.; TeleFutura; Univision Music Group; Univision Network; Univision Online; Univision Radio; Univision Television Group.

PRINCIPAL COMPETITORS

ABC, Inc.; Arts & Entertainment Network; CBS Corporation; Cisneros Group of Companies; Fox Broadcasting Company; Grupo Televisa, S.A.; NBC Universal Inc.; Entertainment TV Azteca S.A. de C.V.; Telemundo Communications Group, Inc.

FURTHER READING

Arrarte, Anne Moncreiff, "And Galavision Makes Three," Advertising Age, February 12, 1990, p. S2.

Bagamery, Anne, "SIN, the Original," Forbes, November 22, 1982, p. 96.

Barnes, Peter W., "Spanish-Language TV Faces Big Changes," Wall Street Journal, April 24, 1986, p. 6.

Derham, Michael T., "Soap Opera Magnate," Latin Finance, June 2005, p. 22.

Dolan, Kerry A., "Muchas Gracias, Congress," Business Week, October 7, 1996, p. 46.

Friedman, Wayne, "How Hot Is Univision?" Broadcasting & Cable, March 6, 2006, p. 20.

Goldsmith, Jill, "Univision Up for Grabs," Daily Variety, February 9, 2006, p. 1.

"Hispanic TV Is Beaming In on the Big Time," Business Week, March 23, 1981, p. 122.

Hoag, Christina, "Televisa to Make Bid for Univision," Miami Herald, April 29, 2006.

Kurtz, Howard, "Hispanic TV, Not Just Fun & Games," Washington Post, March 2, 1991, p. D1.

Landro, Laura, "Univision Expansion Plan Is Under Way," Wall Street Journal, January 23, 1989, p. B9.

McClellan, Steve, "Cisneros Out at Univision," Broadcasting & Cable, August 14, 2000, p. 49.

, "Hispanic Business Lures Anglo Media," Broadcasting & Cable, November 6, 2000, p. 34.

, "Telemondo: Time for Plan B," Broadcasting & Cable, November 9, 1998, p. 30.

, "Univision Speaks Barry's Longo: $1.1B," Broadcasting & Cable, December 11, 2000, p. 11.

Mehta, Stephanie N., "Univision Is Ready for Its Closeup," Fortune, March 6, 2006, p. 53.

Moffett, Matt, et al., "Mexican Media Empire, Grupo Televisa, Casts an Eye on U.S. Market," Wall Street Journal, July 30, 1992, pp. A1, A9.

Murray, Kathleen, "Banging the Drums As Spanish TV Comes of Age," New York Times, April 10, 1994, p. 10.

O'Boyle, Michael, "Televisa Heats Up Feud with Univision," Daily Variety, June 18, 2005, p. 13.

Paxman, Andrew, "Numero Uno, but Univision TV Net Faces Challenge," Variety, March 31, 1997, p. 59.

Pollack, Andrew, "The Fight for Hispanic Viewers," New York Times, January 19, 1998 p. D1.

Puig, Claudia, "Univision Sale Raises Concerns," Los Angeles Times, April 27, 1992, p. F1.

Rohter, Larry, "In Spanish, It's Another Story," New York Times, December 15, 1996, p. 1.

Roman, Monica, "Muy Grande Broadcaster," Business Week, October 6, 2003, p. 58.

Satzman, Darrell, "Univision, Secure in Its Domination, Reaps Spanish-Language Rewards," Los Angeles Business Journal, December 15, 2003, p. 3.

Shiver, Jube, Jr., "Keeping Univision Alive," Los Angeles Times, February 19, 1990, p. D1.

Stevenson, Richard W., "Hallmark to Sell Its Univision TV Group," New York Times, April 9, 1992, p. D1.

Tebbel, John, "Newest TV Boom: Spanish-Language Stations," SR/Saturday Review, June 8, 1968, p. 70.

Tobenkin, David, "Univision Vs. Telemundo," Broadcasting & Cable, October 6, 1997, p. 40.

Volsky, George, "Spanish-Language Cable Network Gaining," New York Times, May 1, 1989, p. D10.

, "Third Hispanic Network Seeks Viewers," New York Times, April 10, 1990, p. D17.

Waters, Harry F., "The New Voice of America," Newsweek, June 12, 1989, pp. 5455.

Wylie, Kenneth, "Hispanic Cable TV Strives to Reach Its Potential," Advertising Age, March 19, 1984, p. M36.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Univision Communications Inc." International Directory of Company Histories. . Encyclopedia.com. 22 Sep. 2017 <http://www.encyclopedia.com>.

"Univision Communications Inc." International Directory of Company Histories. . Encyclopedia.com. (September 22, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/univision-communications-inc-0

"Univision Communications Inc." International Directory of Company Histories. . Retrieved September 22, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/univision-communications-inc-0

Univision Communications Inc.

Univision Communications Inc.

1999 Avenue of the Stars
Suite 3050
Los Angeles, California 90067
U.S.A.
(310) 556-7676
Fax: (310) 556-7697
Web site: http://www.kmex.com/information/univision

Public Company
Incorporated: 1961 as Spanish International
Communications Corp. Employees: 1,500 Sales: $459.7 million (1997) Stock Exchanges: New York Ticker Symbol: UVN
SICs: 4833 Television Broadcasting Stations; 4841 Cable & Other Pay Television Services; 7812 Motion Picture & Video Tape Production

Univision Communications Inc. owns and operates Univision, the leading Spanish-language television network in the United States, and Galavision, a Spanish-language cable television network. The company, in 1997, also owned and operated 21 television stations. The Univision network was providing, in addition to the companys own stations, 27 over-the-air and 835 cable affiliates with 24-hour-a-day programming.

Spanish-Language Pioneer, 1961-87

Univision began in 1961 as the Spanish International Communications Corp. (SICC), which was founded by Rene Anselmo, with the purchase of KWEX-TV in San Antonio, Texas. The Massachusetts-born Anselmo had worked in Mexico for Emilio Azcarraga Milmo, president of Telesistema Mexico (later Grupo Televisa), which indirectly provided SICC with 20 percent of its financingthe legal limit on foreign control of a television stationand all of its programming. Anselmo also became head of the Spanish International Network (SIN), established to handle advertising sales for the stations but eventually becoming a full-fledged network with more than 350 affiliated stations. Telesistema Mexico was able to hold 75 percent of SIN (with Anselmo holding the other 25 percent) because limits on foreign ownership of television stations did not extend to television networks.

SICC and SIN almost singlehandedly established Spanish-language television in the United States. By the autumn of 1968 SIN had added KMEX-TV in Los Angeles, WXTV in New York City, and KPAZ-TV in Phoenix to its holdings. All of these were UHF stations. Along with a non-SIN UHF station in Chicago, they constituted the only television stations in the United States broadcasting exclusively in Spanish. Five Mexican stations also belonged to the network.

During the 1970s the Spanish-speaking population of the United States increased seven times faster than the population at large.

SIN, in 1976, became the first network to deliver its signal by earth satellite. By paying $1.5 million for a transponder on Western Unions Westar II satellite, SIN was able to increase its potential outlets and pick up direct transmissions from abroad, while bringing its transmission costs down markedly.

Communications satellites greatly enhanced SINs capabilities, enabling it to reach about two-thirds of all Hispanics in the United States by 1980, beaming 100 hours of weekly programming to ten over-the-air stations, 21 cable systems, and hundreds of CATV systems. By 1982 all but two of the 35 all-Spanish television stations in the United States were receiving programming from SIN. About 55 percent of the programming came from Televisa, with the other 45 percent produced in the United States. The fare included news, variety shows, World Cup soccer, and the wildly popular soap opera series known in Latin America as telenovelas . SINs revenues were estimated at $10 million for 1978, $20 million for 1980, and $45 million for 1984. SICC, whose revenues came to about $90 million in 1985, also owned a string of Spanish-language radio stations.

In 1979 SIN also launched Galavision, a commercial-free pay cable television service in Spanish with programming beamed by satellite. First offered in Arizona, Colorado, New Mexico, and Florida, the Los Angeles-based network had 60,000 subscribers in early 1981 and more than 100,000 in early 1984. Featuring films, sports, and telenovelas, it was offering 14 hours a day of programming in early 1984. Galavision became a basic cable network in 1987 and in 1989 was on some 300 cable systems in 12 states and the District of Columbia. Its 24-hour-a-day fare of news, entertainment, and variety shows was supplied by Televisa and appeared to be aimed primarily at Mexican-Americans. Like SIN, Galavision was 75 percent owned by Azcarraga and other principals of Televisa and 25 percent owned by Anselmo. Galavision and a dozen other companies operated under a U.S. subsidiary of Televisa called Univisa.

Under Subsequent Ownership, 1987-95

In 1986 a Federal Communications Commission administrative law judge refused to renew the licenses of the SICC stations, ruling that they were under the control of Azcarraga and his relatives in violation of the 20 percent legal limit on ownership by foreigners. As a result, in 1987 SICC sold its ten TV stations for roughly $300 million to Hallmark Cards Inc. and its minority partner, First Chicago Venture Capital, who established Univision Holdings Inc. By the terms of the sale, SIN, which was renamed the Univision Network, was to provide all of the programming. In 1988 Hallmark purchased a majority stake in the Univision Network for $265 million. Revenues of Univision Holdings, including its network subsidiary, came to about $150 million that year.

Under the direction of William Grimes, formerly chief executive of ESPN Inc., Univision launched Spanish-language clones of such English-language shows as Saturday Night Live, Entertainment Tonight, The Peoples Court, the Oprah Winfrey and Phil Donahue talk shows, and the 20/20 celebrity magazine-format program. It hired 16 more news correspondents and became noted for its coverage of Latin American hot spots, including the wars in El Salvador and Nicaragua. Its most popular offering, however, remained, Sabado Gigante (Giant Saturday), a three-hour-long combination variety-game-talk show, and the new programs it introduced were not as popular as the Televisa-made telenovelas they supplanted.

Univision and rival network Telemundo suffered from low advertising bookings; although Hispanics made up eight percent of U.S. residents in 1989, the Spanish-language networks received only about two percent of the $11 billion the Big ThreeCBS, NBC, and ABCcollected in revenue from commercials. Univision reportedly lost about $50 million that year. Hallmark had taken on $555 million in debt to buy the stations and network, nearly half of it in the form of high-yielding junk bonds issued by Univision Holdings. When this subsidiary missed interest payments on the bonds in early 1990, Hallmark bought them back from the holders, but at a deep discount, paying only about 49 cents on the dollar. In 1992 Hallmark sold Univision Holdings to A. Jerrold Perenchio for $550 million.

Univision at this time had annual revenues of more than $200 million, 13 Spanish-language television stations, and a potential audience of 90 percent of the nations Hispanic households. Perenchio, a non-Hispanic producer of TV shows who had owned and operated Spanish-language television stations, made his purchase in partnership with Grupo Televisa and Venevision, Venezuelas largest broadcasting company. Perenchio received 75 percent of the station group and 50 percent of the network, with the foreign companies splitting the remainder of each. They also received warrants enabling them to acquire 50 percent of the station group if U.S. laws were changed to permit greater foreign ownership of broadcast outlets.

This sale was approved by the FCC despite protests by Telemundo and three Hispanic groups who feared Univision would end production in the United States (where it was producing, in Miami, 41 percent of its programming) and farm all of its programming out to Televisa and Venevision. When Univision dropped three U.S.-made shows in 1993 (replacing two of them with Mexican programs) and fired 70 people who worked on them, critics of the network felt their misgivings were confirmed. By the end of 1997 Televisa and Venevision were providing Univision with 92 percent of its programming.

Some Hispanics of Caribbean background were already angry at the company because Galavision was being aimed at the growing Mexican and Central American population. And in late 1990 Puerto Ricans demonstrated in front of Univisions New York City metropolitan-area station to protest remarks during a program about Puerto Rican welfare mothers. As a result of the controversy Coca-Cola and Goya Foods withdrew advertising from the network. At nearly the same time Mexican-Americans in Los Angeles were protesting what they perceived as the Cubanization of both Univision and Telemundo in hiring and programming. The protests against Univision in Los Angeles began in May 1989, after the network announced it was consolidating its operations in Miami, where Cuban-Americans had a large presence and there were few Mexican-Americans.

Univision won some praise from Hispanics (as well as some criticism by non-Hispanics) for donating $100,000 in 1994 to a group fighting the ballot initiative known as Proposition 187, which sought to deny government benefits to illegal immigrants in California. Ironically, at the same time Perenchio was making huge donations to Governor Pete Wilson of California and the Republican Party, whose policiesincluding support for Proposition 187were unpopular with many Hispanics.

Univision in the Middle and Late 1990s

Between 1992 and 1997, Univisions share of Spanish-language television viewing in the United States grew from 57 to 83 percent. With the acquisition of Chicago and Houston stations in 1994 and a Sacramento station in 1997, Univision was operating 13 full-power over-the-air UHF stations, including 12 in the top 15 metropolitan areas in terms of numbers of Hispanic households. Each ranked first in Spanish-language television viewership in its metropolitan area, as did all of Univisions ten full-power affiliated stations.

Much of Univisions fare was similar to that offered by the U.S. English-language networks, starting with Despierta America, a Today-type early morning program, and continuing with a morning talk show, Maite, another talk show, Cristina, the popular magazine show Primer Impacto, and, of course, the telenovelas.

Cuban-born Cristina Seralegui claimed to be the most watched talk show host on earth, seen by 100 million people from Boston to Chile. In 1997 the network added a late night variety show, Al Ritmo de la Noche. Of the 20 top prime-time Spanish-language programs in the United States in that year, the first 14 all belonged to Univision.

Noticiero Univision was the most influential and highest-rated Spanish-language news program in the United States. WLTV, the Univision affiliate in Miami, led the CBS, NBC, and Fox stations in news ratings, and KMEX, in Los Angeles, led all of the network newscasts. According to a 1994 study, 45 percent of a typicalNoticiero Univision broadcast dealt with Latin American events, compared with less than two percent of the main nightly ABC newscast. A 1996 poll found that Univision was the second most trusted institution among the nations Hispanics, trailing only the Roman Catholic Church. In smaller, poorer Latin American countries, television stations often simply taped Univision stories for their own use.

As a subsidiary of Univisa, Galavision had not been included in the sale of SIN to Hallmark, but it was acquired by Univision in July 1996. This cable network was offering such attractions as classic movies, original series, and exclusive rights to sporting events, including baseballs Caribbean World Series and Mexican League soccer championship games. Galavision, in 1997, was reaching about 2.5 million of the 4.4 million Hispanic households wired for cable service on more than 370 U.S. cable systems. After the parent company joined with Home Shopping Network to form Spanish Shopping Network in 1997, Galavision began carrying its offerings.

Galavision was also being used by the parent company to connect with younger, bilingual, or English-dominant Hispanics in the United States reported to be turning away or turned off by Univisions programming. A Hispanic producer told a Los Angeles Times reporter, In a lot of Latino households, mom and pop are at one TV set watching telenovelas and the kids are at another set watching Moeshaor Friends.Galavision began targeting this segment of the market in 1997 with two English-language shows aimed at Hispanics: Cafe Ole with Giselle Fernandez, including crossover Latino actors as celebrity guests, and Funny Is Funny, an all-comedy half-hour series hosted by comedian Carlos Mencias.

The station group, Univision Communications, made its initial public offering in September 1996, selling 19 percent of its common stock at $23 a share. In early 1998 Perenchio held 26.5 percent of the Class A common stock, while Grupo Televisa and Venevision each held 10.3 percent, plus warrants that if exercised would nearly double their stakes. Because of his full ownership of Class P stock, however, Perenchio held 78.5 percent of the voting power.

Curiously, Perenchios partners also were potential threats to Univisions future. Televisa, for example, had agreed with several partners to develop and operate a direct broadcast satellite venture that would use Televisa programming. Univision was threatening legal action, contending that it had exclusive rights to any such venture. Similarly, Univision said it was considering action against Venevision, claiming that the Venezuelan network had not made available the nine hours per day of programming required by an agreement that locked in Univisions rights to Televisas and Venevisions telenovela output through 2017.

Univisions net revenues grew from $104.7 million in 1993 to $459.7 million in 1997. After losing money in 1993, 1994, and 1995, the company had net income of $10.4 million in 1996 and $82.6 million in 1997, including $19.5 million as a carryover for earlier losses. Univisions 1997 revenues were almost double the previous years, primarily reflecting the acquisition of Univision Network L.P. in October 1996. Interest expenses in 1997 came to $40.1 million. The companys long-term debt was $481.3 million in September 1997.

Principal Subsidiaries

Galavision, Inc.; PTI Holdings, Inc.; Sunshine Acquisition Corp.; Sunshine Acquisition, L.P.; and California general partnerships for each of Uni visions 13 full-power stations.

Further Reading

Arrarte, Anne Moncreiff, And Galavision Makes Three, Advertising Age, February 12, 1990, p. S-2.

Bagamery, Anne, SIN, the Original, Forbes, November 22, 1982, pp. 96-97, 99.

Barnes, Peter W., Spanish-Language TV Faces Big Changes, Wall Street Journal, April 24, 1986, p. 6.

Dolan, Kerry A., Muchas Gracias, Congress, Business Week, October 7, 1996, pp. 46-47.

Hispanic TV Is Beaming in on the Big Time, Business Week, March 23, 1981, p. 122.

Kurtz, Howard, Hispanic TV, Not Just Fun & Games, Washington Post, March 2, 1991, pp. DI, D9.

Landro, Laura, Univision Expansion Plan Is Under Way, Wall Street Journal, January 23, 1989, p. B9.

McDougal, Dennis, Univision May Face Ad Boycott, Los Angeles Times, January 1, 1991, p. F3.

Moffett, Matt, and Johnnie L. Roberts, Mexican Media Empire, Grupo Televisa, Casts an Eye on U.S. Market, Wall Street Journal, July 30, 1992, pp. Al, A9.

Murray, Kathleen, Banging the Drums As Spanish TV Comes of Age, New York Times, April 10, 1994, Sec. 3, p. 10.

Mydans, Seth, Spanish-Language TV Called Biased, New York Times, July 24, 1989, p. C16.

Pollack, Andrew, The Fight for Hispanic Viewers, New York Times, January 19, 1998, pp. DI, D6.

Puig, Claudia, Univision Sale Raises Concerns, Los Angeles Times,April 27, 1992, pp. Fl, Fll.

Rohter, Larry, In Spanish, Its Another Story, New York Times, December 15, 1996, Sec. 4, pp. 1, 6.

Shiver, Jube, Jr., Keeping Univision Alive, Los Angeles Times, February 19, 1990, pp. DI, D4.

Spanish TV Network Traces Growth to Satellite Usage, Communications News, February 1980, pp. 68-69.

Stevenson, Richard W., Hallmark to Sell Its Univision TV Group,New York Times, April 9, 1992, pp. DI, D4.

Tebbel, John, Newest TV Boom: Spanish-Language Stations, SR/Saturday Review, June 8, 1968, pp. 70-71.

Tobenkin, David, Univision Vs. Telemundo, Broadcasting & Cable, October 6, 1997, pp. 40, 42.

Univision Staves Off Chapter 11, Chicago Tribune, April 14, 1990, Sec. 2, p. 2.

Volsky, George, Spanish-Language Cable Network Gaining, New York Times, May 1, 1989, p. DIO.

_____, 3d Hispanic Network Seeks Viewers, New York Times, April 10, 1990, p. D17.

Water Harry F., The New Voice of America, Newsweek, June 12, 1989. pp. 54-55.

Wylie, Kenneth, Hispanic Cable TV Strives to Reach Its Potential, Advertising Age, March 19, 1984, pp. M36-M37, M40.

Robert Halasz

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Univision Communications Inc.." International Directory of Company Histories. . Encyclopedia.com. 22 Sep. 2017 <http://www.encyclopedia.com>.

"Univision Communications Inc.." International Directory of Company Histories. . Encyclopedia.com. (September 22, 2017). http://www.encyclopedia.com/books/politics-and-business-magazines/univision-communications-inc

"Univision Communications Inc.." International Directory of Company Histories. . Retrieved September 22, 2017 from Encyclopedia.com: http://www.encyclopedia.com/books/politics-and-business-magazines/univision-communications-inc