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By Billboard

Spanish-language media giant Univision Communications, which recently put itself up for sale, on Thursday reported lower second-quarter earnings amid lower revenue and higher operating expenses.

Univision, led by CEO Vincent Sadusky, reported second-quarter earnings from continuing operations of $92.0 million, compared with a year-ago profit of $121.3 million, down 24 percent. Quarterly adjusted operating income before depreciation and amortization (OIBDA), another profitability metric, dropped 14 percent to $265.7 million.

Quarterly revenue declined 4 percent to $701.7 million, with core revenue down 3.5 percent to $694.5 million, including a 1.1 percent drop in media networks unit core advertising revenue. Total networks unit advertising revenue fell 2 percent to $347.2 million "due to declines in television advertising revenue, partially offset by higher digital advertising revenue." Media networks unit non-advertising revenue, including carriage fees and content licensing, declined 6.2 percent to $292.8 million in the latest period.

Subscriber fee revenue in the quarter reached $263.3 million, down from $279.6 million in the year-ago period. Univision this year had a carriage dispute with Dish Network, which it settled late in the first quarter.

Quarterly direct operating expenses rose 9 percent to $273.7 million. Expenses related to programming, excluding variable program license fees, increased 31 percent to $40.0 million in the second quarter, "primarily due to increases in sports programming costs of $45.8 million," driven by Gold Cup and UEFA soccer rights, and higher news programming costs, partially offset by a decrease in entertainment programming costs. Operating expenses related to variable program license fees and other operating expenses fell in the second quarter.

"While OIBDA decreased this quarter, we continue to see evidence of improved operational strength fueled by our investments in programming and sales, which positioned us for growth," said Sadusky. "In the recently completed 2019/2020 upfront sales cycle Univision achieved the strongest growth in four years."

Univision last year cut jobs, scrapped plans for an initial public offering and replaced its CFO. The firm then announced that private equity firm Great Hill Partners will buy Univision's digital media group Gizmodo Media Group and The Onion for an undisclosed sum.

In July, it said it would entertain offers from potential buyers, saying that the U.S. Hispanic audience "represents one of the very few certain growth opportunities in today's media." The firm engaged Morgan Stanley, Moelis & Co. and LionTree as financial advisers as its board of directors reviews a sale and other "strategic options for the company."

Univision has been privately owned for more than a decade and investors, like Saban Capital Group, Madison Dearborn Partners and Providence Equity Partners, have been seeking at least a partial exit that formerly might have come via an initial public offering.

This article was originally published by The Hollywood Reporter.


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