Univision’s reduced revenue and cash flow, the heavy debt load, the upcoming lawsuit with Televisa over programming and the credit crunch the industry is experiencing has analysts predicting the Spanish-language network could be next on the list of media companies to file for bankruptcy.
According to the Hollywood Reporter, Univision had a 25% drop in auto advertising in the third quarter of 2008. It also also has a lot of debt after its buyout last year by private-equity firms, which included media mogul Haim Saban.
Credit analysts have started to compare Univision and Tribune, which also was taken private at the height of the private-equity buyout boom, despite Univision’s stronger growth rate. The company’s liquidity has become a concern given the firm’s debt load – a $500 million debt payment comes due in March. And the sale of its music arm didn’t generate as much cash as Univision management hoped. The company got $153 million – half of what had been expected.
Analysts at Standard & Poor’s and Moody’s have dire predictions for Univision in 2009. Moody’s issued warnings, including in a pre-holiday-season debt-ratings downgrade on the company, its second of 2008.