Why Univision Acquired Gawker For $135 Million

If you're in any business you have to grow, but especially in the business of media and entertainment, you grow by selling advertisers on the number of eyeballs which follow you and the button-pushing, purchase-making fingers to which they are attached.

The largest upcoming demographic are millennials, which Gawker delivers. And at $135 mill, Univision got a deal. JL

Madeline Berg reports in Forbes:

Millennials. All those sites owned by Gawker Media reach younger, digital savvy audience members who are much less likely to turn on Univision’s nightly programming. Univision has greatly expanded its digital footprint, is no longer solely focused on the Spanish-speaking audience and is seeking to broaden its coverage area to appeal to other minorities and younger demographics.
When Univision Network was founded more than 50 years ago, its mission was simple: create a Spanish-language television network for a Hispanic audience in America that offers content–news, sports, variety, novelas–not offered on other networks.
On Tuesday, Univision Communications , the broadcaster’s parent company, agreed to purchased the assets of Gawker Media in a move that suggests the organization has moved far beyond the TV network it once was. That bid will likely be approved by a New York bankruptcy court on Thursday.
In the past year and a half, Univision has greatly expanded its digital footprint, and its latest $135 million acquisition following Gawker’s legal battle (and loss) against former professional wrestler Hulk Hogan, shows it is still growing. Univision is no longer solely focused on the Spanish-speaking audience and is seeking to broaden its coverage area to appeal to other minorities and younger demographics. Univision did not respond to a request for comment for this article.
Univision’s digital media buying spree began in May 2015, when the company bought The Root, an online publication targeted at African American readers. When the acquisition was announced, The Root cofounder Henry Louis Gates Jr. said the deal “underscores the ties that have long bound people of color together throughout the Western Hemisphere.”
That spree continued in January when Univision bought a 40% stake in satirical publication The Onion for under $200 million. Between its minority position in The Onion, which also owns spinoff sites Clickhole, StarWipe and The A.V. Club, its undisclosed purchase of ABC’s 50% stake in former joint venture Fusion and its $135 million Gawker bid, Univision has committed to spend more than $300 million for digital media sites since the start of 2016.

The reason? Millennials. All those sites–particularly those owned by Gawker Media, reach younger, digital savvy audience members who are much less likely to turn on Univision’s nightly programming. In purchasing The Onion, Isaac Lee, the chief news and digital officer of Univision and CEO of Fusion, said that the decision was due to the fact that the publication had “proven to be an incredibly engaging format for millennial audiences.” Lee will likely take Nick Denton’s place as the leader of a Univision-owned Gawker.
If a millennial audience is what Univision seeks, Gawker Media’s properties, will be a perfect addition. Feminism-focused Jezebel will help reach female readers with targeted content, and Gizmodo, Kotaku and Lifehacker will allow the company to immediately become a player in tech and gaming news–a millennial favorite. If Univision also decided to restart Valleywag–Gawker’s snarky Silicon Valley site–it could further solidify Univision’s presence in the tech space.
Gawker will certainly be an improvement from Unvision’s first foray into English-language media, Fusion, which began as a television station and accompanying website in Oct. 2013. Despite Fusion’s best efforts to attract millennials with catchy headlines and an abundant use of photos, videos and graphics, the site struggled. As one Gawker story put it last year, “more people work at Fusion than are reading its most popular post.” While traffic has since improved, the site only had 11.5 million unique views in July.
Gawker’s combined assets could provide Univision with more than 50 million more unique views a month. Even more desirable, more than half of those audience members are under the age of 35 according to comScore. 
In addition to content, Gawker’s sites–particularly Kotaku and Lifehacker– will provide e-commerce opportunities. While e-commerce may be a new area for Univision to explore, its importance in digital media is growing as consumers become more sophisticated and wary of advertisements.
That has helped contribute to Gawker’s upward trending revenue figures. In 2015, the company recorded sales of $48.7 million, up from $43.8 million in the year prior, according to bankruptcy filings.
Perhaps these acquisitions will provide Univision the strength it needs to go through with its long-postponed plans for an initial public offering. The company delayed its IPO, which was set to take place last yea, after the poor performance of media and entertainment stocks in the second half of 2015. 
It still remains to be seen what Univision if it will reign in the Gawker blog’s snarky and often aggressive tone in its coverage. Moreover, it’s not clear if the company will be willing to take on namesake site Gawker.com, which has a scandal-filled past. In fact, part of the agreement leaves Univision with the choice to return Gawker.com to Gawker Media LLC.