Univision Reveals Write-Down of Struggling Gizmodo Media Group Assets
The company reported that the assets lost $32.5 million in the fourth quarter of 2018.
Univision is acknowledging the financial weakness of the Gizmodo Media Group digital media assets the company has purchased over the last few years, including the former Gawker Media Group publications it picked up in the summer of 2016.
“In 2018, we recognized a non-cash impairment charge on our English-language digital assets,” a company spokesperson told The Hollywood Reporter on Thursday.
Earlier in the day, the company reported that its English-language digital businesses, which includes The Onion, lost $32.5 million in the fourth quarter of 2018, compared to just $3 million in the same quarter a year earlier. But the losses were even greater in the third quarter of 2018, with the company reporting a loss of $96.1 million for the U.S. digital brands.
Univision is still looking for a buyer for the Gizmodo Media Group properties, which the company still believes to be strong.
“Our English-language digital brands are longstanding, recognized sources of news, information and entertainment in their verticals that we believe can thrive as part of a company whose focus better aligns with theirs,” the Univision spokesperson said.
The spokesperson declined comment when asked about the status of the company’s acquisition talks, but a media executive familiar with the company said the weak financials and the broader struggles in the digital media industry don’t bode well.
“They haven’t been able to get anyone to buy it and in this environment, things aren’t promising,” the executive said.
BuzzFeed and Vice Media have both recently undergone painful rounds of cost-cutting as they strive for profitability.
A Gizmodo Media Group employee told THR that staff have not been updated in months about the status of the sales talks.
While the transaction was not announced at the time, Univision revealed in a finding that it spent $28.7 million in September 2018 to purchase the stake in The Onion that it did not already own. A source speculated that the buy was made to be able to sell The Onion as a whole entity.
Although a buyer has emerged, industry analyst Ken Doctor said there’s a lot to like about the Gizmodo Media Group properties, which he said command “passionate, niche audiences” and a solid e-commerce business based on product recommendations.
“Given those two factors, I can see a buyer taking on the properties and rationalizing them,” Doctor said, though they may only fetch a “fire sale price.”