Univision’s foray into digital media comes to an expected and, with the announced sale of its digital media portfolio. As the Spanish-language media giant limps back to its core business, it’s worth looking at what led to this point, and what follows from here.
Univision Communications Inc. today announced that it has completed the sale of assets comprising Gizmodo Media Group (GMG) and The Onion to Great Hill Partners, a leading growth-oriented private equity firm. Great Hill Partners became the owner of these assets immediately upon the completion and signing of the deal. GMG and The Onion will form a new company named G/O Media Inc., which will operate as independent assets within the Great Hill Partners portfolio.
Terms of the transaction were not disclosed.
The sale of GMG and The Onion is part of Univision’s go-forward strategy to focus on its core Hispanic media assets and strengthen its position as the No. 1 media company serving U.S. Hispanics, while enabling both GMG and The Onion to capitalize on new opportunities for growth under the ownership of Great Hill Partners.
The GMG digital portfolio includes Gizmodo, Jezebel, Deadspin, Lifehacker, Splinter, The Root, Kotaku, Earther, and Jalopnik. The Onion portfolio includes The Onion, Clickhole, The A.V. Club, and The Takeout.
Univision didn’t disclose the terms of the deal but that didn’t stop an online leak of the final number, which per several sources ended upthat Univision initially laid out for GMG and its subsequent stake in the Onion brands.
The intent behind the digital expansion -former Chief Content Officer Isaac Lee’s last big gamble with Univision’s money- was to expand Univision’s product offerings (and potential audience) beyond Spanish-language television in advance of an Initial Product Offer (IPO). But the IPO never came, despite many postponements. The demand simply wasn’t there, and the market determined that the price was too high. Furthermore, it turned out that diversification was only skin-deep. Univision’s great undoing was its insistence on appealing almost exclusively to the left, as signaled by its insistence on pretentiously marketing itself as the voice of “The Rising American Mainstream”. As we noted when Univision initially purchased the Gawker remnant:
But the thing about language (especially as pertains to both marketing and political communications) is that what is unsaid and implied is more important than what makes it on to the release. "Rising American Mainstream" is, in itself, an admission that vast portions of FMG's programming are in fact far, far outside of the mainstream, and that the intent is to triple down with programming and content that is, both politically and socially, on the furthest fringe of the far left rather than developing inclusive content.
But the venture never clicked. After a massive loss of face on Election Night 2016, Univision laid off a significant portion of their staff, including at Fusion- which reverted to full Univision ownership several months earlier once Disney decided that it had lost enough money on the joint venture. Subsequent to that, there was a dustup between the Gawker remnant (now known as Gizmodo Media Group) and Univision executives, for a meeting between the latter and then President-Elect Donald Trump.
The relationship between the Gizmodo Media Group and its corporate parent devolved to the point of a scathing exposé run by Gizmodo’s Special Projects Desk which, in hindsight, will likely provide the best autopsy as to the failure of Univision’s digital project...but since it happened before the sale of the Gizmodo Media Group, it’s really more of a vivisection. This particularly prescient paragraph sticks out:
The fate of GMG now rests in the hands of Univision, an indulgently run and suicidally structured company. In turn, Univision’s fate rests in the hands of impatient private equity vampires who are not concerned with the long-term damage to revenue streams that could result from slashed budgets, or with damage to the company’s connection with tens of millions of Spanish speakers—or with journalism, or with anything, as far as anyone can tell—but with their desire to get out of a bad deal with as little damage as possible. This is their right; the people who work for Univision and its subsidiaries are simply unlucky enough to be employed under an economic system that considers the livelihoods of thousands to be less valuable than the panic and avarice of a few fathomlessly wealthy people.
As fate would have it, GMG goes from being owned by the aforementioned “indulgently run and suicidally structured company” to being directly owned by a private equity group- which is naturally populated by some of those “fathomlessly wealthy people” that GMG loathes. For all its troubles, Univision lost $150 million in the deal- and is now more dependent than ever on Spanish-language programming. Can the network find a way to appeal to all Hispanics, or will it continue to operate as a regional channel with a national footprint? Time will tell but we’re not optimistic that Univision can fully adapt. If anything, the GMG dump signals a return to an old business model:
JORGE RAMOS, SENIOR ANCHOR, UNIVISION: I think the future of Spanish-language media is assured for decades, simply, for a very simple reason: In spite of the fact that the majority of the growth within the Hispanic community is coming from people being born here, we still have one to two million immigrants, legally and illegally coming in every single year. Most of them speak Spanish. So, therefore, we have a market that is growing and growing.