Televisa’s U.S. shares rose 9.8% this morning after yesterday’s announcement that it was investing $1.2 billion in Univision Communications, getting a share of the company and expanding its content-sharing deal beyond its current 2017 date and adding online and mobile use of its programming.
Univision will be increasing its royalty payments to Televisa for its programming. The royalties are set to 11.91% of Univision’s audiovisual and interactive revenue until 2017 and jumps to 16.22% after that. Univision’s current agreement stipulates paying 9.36% of its TV revenue to Televisa.
According to Bloomberg, Univision’s liabilities exceed its assets by $1.6 billion and has $8.6 billion in debt maturing in 2014. As part of the deal, Univision must refinance $3.25 billion of debt.
Three Televisa reps will join Univision’s board, increasing its size to 20 members. Univision Chairman Haim Saban says he’s not leaving the company.
In 2007, Televisa sold an 11% stake in Univision for $1.09 billion to the current investors, after it was shut out by former Chairman Jerry Perenchio from the possibility of buying the company.
An investor group led by Saban took Univision private in 2007 in a $12.3 billion buyout. Univision’s worth took a big tumble shortly after. Three years later, Televisa is buying its way back in, with slightly more money and a much higher ownership stake.