Last month, it was announced that broadcast conglomerate Univision had purchased the embattled Gawker Media for $135 million at auction. This effectively saved the online media company from complete collapse after a costly suit from famed ex-wrestler Hulk Hogan.
While the pairing of Univision, a Spanish-language media network, and Gawker, an often-inflammatory gossip blog, may seem odd, the move is part of a long-term strategy. As Univision prepares to go public, which many predict will come this fall, it has begun to diversify its offerings, especially in the digital sphere.
With the Gawker purchase, Univision adds to its growing digital media presence. Among Gawker Media’s portfolio is the female-focused news and gossip site Jezebel, the tech site Gizmodo, gaming-centered Kotaku, sports blog Deadspin, and Lifehacker, a software blog.
Gawker Media’s brands will join Univision’s existing online offerings, which have all been acquired over the last two years. In May 2015, Univision made its first large-scale digital acquisition when it purchased African-American news site The Root. In January of this year, Univision also acquired a controlling stake in Onion, Inc., a comedy news publishing company known for satire site The Onion and sister publications like AV Club and Clickhole. Univision quickly followed this purchase by buying out the Walt Disney Company’s stake in Fusion, a joint network venture, the following April.
All of the digital stars seemed to align for a strong starting IPO. Yet, Univision delayed its offering for the second time in May (the first time was in the previous December), citing concerns over the performance of its larger networks that had seen drops in audience numbers, especially in younger demographics.
Since Univision has attempted to calm board members about future audiences, partially by investing in digital media companies like Gawker, it has also done so through innovative broadcasting partnerships. Univision partnered with Netflix, in an unprecedented agreement with the online streaming service, to broadcast two shows, “Narcos” and “Club de Cuervos”. With these bilingual, faster-paced, more American-style programs, Univision hopes to attract a younger audience without ostracizing the network’s mainstay of older viewers. The partnership seems to have been successful for both parties – in May, both Netflix and Univision announced that they will co-produce a show about Mexican drug kingpin ‘El Chapo.’
However, Univision has still struggled against shifting dynamics of Latinos in the United States. As the Wall Street Journal reports, some 60 percent of Latinos in the U.S. are millennials, and a sizable portion are American-born. These younger generations, especially those born in the U.S., are less likely to watch television in Spanish, and are less interested in the traditional telenovela offerings that previously propelled Univison to saturation levels among Hispanic households.
While there is significant optimism about Univision’s future (they hope to raise at least $1 billion in their IPO) there are concerns about the network’s ties to Grupo Televisa, the Mexican television company that provides Univision with its telenovelas. The deeply rooted partnership may be less flexible than the market can allow.
It remains to be seen whether these acquisitions in the digital realm will be enough to propel Univision into Wall Street’s good graces before their IPO, and much of its success will depend on how these new acquisitions perform. Univision now stands at a crossroads: they must decide whether to gamble on the lure of the illusive millennial, or play more conservatively with their base audience – a choice which could spell prosperity or failure for the company for years to come.