Inside Univision’s troubled acquisition of Gizmodo and The Onion
Last July, hours before Univision announced that it was looking to sell Gizmodo Media Group and The Onion, Univision CEO Vincent Sadusky gathered the leadership team at Fusion Media Group, Gizmodo Media Group and The Onion in New York City to break the news. After years of trying to diversify its portfolio beyond Spanish-language television, Univision was going back to its roots. This came a few months after Univision decided to cancel plans for an IPO and installed a new CEO and leadership team — which left no room for the English-language digital properties the broadcaster had acquired and clumsily merged over the years.
“Once you go from an IPO strategy to wanting to position yourself for a potential acquisition, you go from diversification to simplification — and the English-language assets make less sense to you,” said a source who was present during that meeting. “And that was [Sadusky’s] message: We are moving to simplification.”
“But in stereotypical Univision fashion, no one consulted the leadership [at Fusion, Gizmodo or The Onion] on how it would be communicated,” the source continued. “The announcement did not even set them up as something worth buying, there were no stats of the size of the portfolio or the depth of engagement; you’d think they would use this opportunity to pitch why someone should buy these assets.”
Univision once had grand ambitions with its English-language assets. Under the umbrella of Fusion Media Group, which oversaw Gizmodo Media Group and The Onion’s stable of sites, the Spanish-language broadcaster was going to become a diversified media company with a fast-growing digital business. To accomplish this, Univision poured money into both building its own digital media assets under the Fusion brand and acquiring properties in the former Gawker Media properties and The Onion, spending roughly $200 million on the latter two companies, according to three sources familiar with the matter.
Yet the effort was troubled from the start, offering yet another example of a corporate shit show, repleted with competing management cliques, clashing company cultures, ballooning costs and impatient investors. Ultimately, Univision cut bait, reportedly selling off GMG and The Onion for less than $50 million — less than 25 percent of what Univision paid for the properties since 2016.
This story is based on conversations with six current and former executives across Univision and its former digital assets. Univision did not provide an official comment by press time, but representatives pointed to a recent interview from Sadusky during which the executive confirmed about focusing on Univision’s core assets and Hispanic audience, but pushed back against the idea that it’s all in service of a sale of the company.)...MUCH MORE
Diversifying ahead of a planned IPO
At a time when the drumbeat of bad news about digital media is commonplace, it’s worth remembering the headier times. Back in 2016, traditional media was in a panic, worried about losing share to digital upstarts. More than a few traditional media company had some form of “BuzzFeed envy.” That let stalwarts such as Disney and NBCUniversal to pour a billion dollars into companies such as Vice Media, BuzzFeed and Vox Media. Univision, with its Spanish-language roots, was little different.
Univision’s pivot to digital originally centered on building up Fusion. In 2012, Univision partnered with Disney’s ABC to create Fusion, a news brand originally aimed at English-speaking Hispanic millennials. Fusion’s portfolio includes a website and a cable network. By 2016, Fusion had racked up $60 million in losses, prompting Disney to exit the partnership with Univision buying out full ownership of the Fusion assets....
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