Following reports in recent days, Univision confirmed it is formally exploring a potential sale of Gizmodo Media Group and The Onion, two English-language digital portfolios it acquired under a previous management regime.
In a brief press release, Univision said it “determined that pursuing a sale of GMG and The Onion collectively will allow UCI to focus on its core assets and further strengthen UCI’s position as the No. 1 media company serving U.S. Hispanics.” A sale could also offer the benefit of “enabling both GMG and The Onion even greater opportunities to grow under new ownership,” it added.
Univision said it has brought in Morgan Stanley as financial adviser in the process, issuing the caveat that the exercise may not necessarily result in a sale or shift in strategy.
GMG, which was known as Gawker Media until flagship website Gawker went up in flames due to a ruinous libel verdict, operates sites including Gizmodo, Jezebel, Deadspin, Lifehacker and The Root. The Onion group includes the satire mother ship as well as Clickhole and The A.V. Club. When the Gawker properties were shopped, Univision elbowed out a range of other buyers, paying $135 million in 2016. The Onion was snapped up the same year, in roughly the same valuation range.
The sale effort is being supervised by CEO Vince Sadusky, who replaced Randy Falco in the top job a bit more than a month ago and is looking to improve the fortunes of the privately held media giant. The company’s ownership, including Saban Capital, TPG and Thomas H. Lee Partners, at one point had planned an IPO but pulled it abruptly and also accelerated Falco’s planned retirement just months after his contract had been extended.
In green-lighting the digital purchases, Falco theorized at the time that the stable of high-priced digital outlets would balance the company’s longtime Spanish-language broadcast network and related outlets. Marketers, he said, could reach young Hispanics, who often partake of content in both English and Spanish, through online channels as a complement to TV ad buys.
Trouble came as the digital advertising market softened considerably in the two years since, squeezing a range of once-invincible digital players, from BuzzFeed to Vox. Everyone doing battle in the digital world has had to contend with the twin 800-pound gorillas of Facebook and Google, which control more than 80 cents of every online advertising dollar. Layoffs have consequently hit the digital sector hard in recent months, and reports of layoffs at The Onion have accompanied the talk of a potential sale.