Corporate Telenovela

Joe Uva, Univision’s former CEO, may have left the stage suddenly, but he walked off while he was on top. By most accounts, his resignation just weeks before his four-year contract expired at the end of March came as a surprise both to Univision executives and network industry watchers.

Uva’s stated reason was a desire to seek other opportunities. Some observers doubt his exit was self-motivated. Regardless of the reason, Uva will be remembered for a series of successes and no noteworthy stumbles. Hired from OMD, a major ad agency where he was president, Uva came in to help Univision capture more of the ad dollars that marketers spend with English-language networks. Despite a rapidly growing population, Hispanics pull in only 2 percent of ad spending. In February, Univision surpassed NBC in the younger demographic ratings groups to finish fourth among American broadcast networks. And as Uva was clearing his office, Univision debuted Teresa on March 31, raking in ratings that were second only to Fox’s American Idol in the 18 to 34 age group. Uva’s legacy includes presiding over Univision’s presence at the World Cup and two national elections.

On the corporate side, Uva will also be remembered as the pilot at the helm that helped steer Univision through a crucial transition, the new partnership with Grupo Televisa. That partnership, however, was prefaced by a long battle over control of Univision and hard bargaining for the programs Televisa produces. And therein lies a bit of intrigue that subsequently raised questions about Uva’s resignation. Televisa’s CEO Emilio Azcarraga Jean---having lost one campaign to take control of Univision--- supposedly used the Program License Agreement as leverage to oust executives close to Haim Saban, Univision’s executive chairman. At least, that is the view of Jose Cancela, a principal of Miami-based market communications firm Hispanic USA. Azcarraga, by this theory, would install into high management positions his own people. Moving forward, a strategic migration of talent from Televisa into Univision would ensue. The weeks following Uva’s announced resignation would bring indicators about Televisa’s reach, Cancela predicted, as several important posts were about to be filled.

Nice theory, but Univision’s moves to date have shown a company dedicated to promoting people from within. Proof perhaps of Saban’s resilience? Jose Valle, named president of Univision Radio, was vice president and general manager of Univision Radio Los Angeles. German Perez Nahim, named senior vice president and operating manager of Telefutura, the number two Spanish-language broadcast network, was vice president of Univision Studios. Moreover, Uva hired Randy Falco in January to be chief operating officer and he doesn’t seem to be going anywhere. A well-regarded television executive, Falco was the second ranking executive at NBC Universal and was CEO at AOL until March 2009. There’s been speculation he could step in as interim CEO, if asked. Another candidate is Cesar Conde, the president of Univision Networks since 2009.

So how much influence does Mexico-based Televisa have over the largest Spanish-language television network in the United States? Enough to play a starring role in upper management, claims Cancela. It is no coincidence, he insists, that Univision’s management went through a major shakeup during and shortly after negotiations over the long-term partnership finalized in December.

Before progress could be made on extending the Program License Agreement that provides Univision a rich supply of telenovelas, Azcarraga insisted on the ouster of Univision President Ray Rodriguez. Saban, an Israeli-American billionaire, first encountered Azcarraga as a rival---both were in a bidding war over control of Univision. Saban was reluctant to ask for Rodriguez’s resignation but Univision was highly leveraged and the Great Recession had slammed ad revenues.

The Uva resignation followed. Or was that just coincidence? There is this. Major corporations don’t normally wait until the last minute to offer their chief executive a contract extension. “I think it’s pretty clear that ever since they renewed the [Program License Agreement] part of that deal was to give more power to Azcarraga and Televisa,” said Drew Wilson, a Denver-based Hispanic marketing consultant and Spanish-language broadcast industry analyst. Three Televisa officials joined Univision’s board of directors after the renewal. “I think they are flexing their muscles. It’s almost a foregone conclusion that Azcarraga will have a lot of influence on whoever replaces Joe, if the position is even replaced.” Upon the Uva resignation announcement, Univision said it immediately search for a new CEO. In the interim, Saban is assuming Uva’s responsibilities. “That is pretty awkward,” Wilson said. “What that does is it allows easy access for Azcarraga to call some shots.” Maybe so, maybe not. It’s not like the Saban and Azcarraga camps are the only two in the boardroom. Univision has six owners. Saban came in as part of a consortium that includes Providence Equity Partners, Madison Dearborn Partners, Thomas H. Lee Partners and Texas Pacific Group.

Cynthia Corzo, editor at Hispanic Market Weekly, said there has been no reliable information that Uva was asked to step aside. That said, Univision’s upper management will be focused in a financial restructuring now that the programming content has been assured. “On the financial side, they do have a lot of debt,” Corzo said, noting its $10.3 billion liability. Saban and the private equity holders are moving toward stabilizing the company’s financial footprint, she said.

Whatever gamesmanship may be going on, it doesn’t worry Al Aguilar, co-founder of San Antonio-based ad agency Creative Civilization. He’s built a career out of helping clients buy broadcast time on Spanish television and he sees a bright future for Univision. “Every few years, it seems a new leadership group comes in with new visions. That’s to be expected,” Aguilar said. What is important is that as a media company it has good leadership on the content and the sales sides of the business. And Univision has that, Aguilar said. “Their goal is they was to reach the point where they are considered in the top tier of TV properties,” Aguilar said. The way the ad industry has short-changed Spanish language media remains as much a challenge as ever, but the momentum is with Univision. More and more national companies are realizing they must reach Spanish speakers to sell shoes in Charlotte, North Carolina, guitars in Aurora, Ill. and toothpaste in Nashville, Tenn.

So stay tuned to the corporate telenovela.

By Adolfo Pesquera