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It used to be No. 1. Now lagging, Univision announces radical changes.

Univision Communications headquarters in Doral, FL.
Univision Communications headquarters in Doral, FL. jazpiazu@miamiherald.com

Univision Communications announced Tuesday that it is partnering with Mexican media giant Grupo Televisa in an attempt to boost the U.S. Spanish-language network’s declining ratings.

News and all other operations of both companies will remain independent, and the terms of the licensing agreement between the two will remain the same, according to a news release.

Currently Televisa has a 40 percent voting interest in Univision and holds 49 percent of Univision’s equity.

Isaac Lee, chief news, entertainment and digital officer for Univision Communications, will assume the role of chief content officer for both Univision and Televisa. In the new post, he will oversee the creation of new programming designed to appeal to Mexican and U.S. Hispanic audiences. Televisa will continue to produce its own news and sports content.

José Bastón Patiño, formerly Televisa’s chief content officer, will now head the company’s international division, which currently distributes content to 70 countries around the world.

Once the undisputed champion of the U.S. Spanish-language TV landscape, Univision has lost 58 percent of its prime-time audience — 1.2 million viewers — over the past four years. Rival Telemundo ended 2016 as the No. 1 Spanish-language network in prime-time season-to-date in the prized demographics of adults 18-49 and adults 18-34.

Telemundo has grown its audience by investing in hip, original, innovative programming that delves into timely topics of crime, immigration and the drug trade.

But Univision has continued pay nearly $400 million per year in licensing costs to Televisa for traditional telenovelas, made in Mexico, that recycle plot lines and casts.

Televisa has also shied away from the narco-dramas that have fueled Telemundo’s popularity among younger viewers due to sensitivity over drug-related crime and violence in Mexico.

By merging its production and development operations, Univision and Televisa will be able to share costs while experimenting creatively with a new brand of Spanish-language programming.

Lee, 46, joined Univision in December 2010 as president of news and expanded the company’s digital presence. He has been the CEO of Fusion, a former joint venture with ABC/Disney that courts the millennial audience, since 2013.

“Isaac is a distinctive success story,” says Andrew Heyward, a visiting researcher at MIT Media Lab and the former president of CBS News from 1996-2005. “He is a visionary and he's very bold. He thinks big. He's in no way a typically cautious corporate citizen, yet he's been able to make changes and rise inside a large corporate structure.”

Lee won’t be the first former news executive making the leap to the creative entertainment industry. Jeff Zucker went from producing the “Today” show to being president of NBC Entertainment. Former CBS News president Howard Stringer later served as chairman and CEO of Sony Pictures Entertainment and Sony Music. Ben Sherwood made the leap from ABC News to co-chairman of Disney Media Networks.

Lee’s experience expanding Univision’s news division — including the addition of English-language content and the formation of the Fusion Media Group, which includes several well-known websites such as The Onion and The AV Club — could help him transform the stodgy telenovela format at Televisa.

“Soap operas are a good analogy for the nightly newscast,” Heyward says. “Just like the next generation isn’t going to sit down to watch the noticiero at 6:30 p.m. every night, soaps were a vibrant and sustaining model of entertainment for a long time, but that time has passed. In media in general, you can't just show up and be successful anymore. You have to connect with your audience in some other way, and Isaac is a change agent. You don’t hire him to be a steward of your operation; you hire him to change it.”

Univision has been trying to unveil an IPO since 2015, without success. In November, the company laid off 250 employees, or 6 percent of its staff, following a third-quarter loss of $30.5 million.

Earlier this month, the FCC approved a petition filed by Televisa and Univision to increase the Mexican company’s 14 percent voting interest and 10 percent equity in Univision to 40 and 49 percent, respectively. The strengthened union between the two companies allows them to serve a combined U.S.-Mexico audience of 175 million viewers.

“I look at Isaac Lee as the ideal leader of our joint content efforts,” Univision president and CEO Randy Falco stated in a press release. “With his creative mind and keen understanding of the rapidly changing tastes of young audiences, Univision and Televisa are best positioned to continue to evolve our aligned content offerings.”

Rene Rodriguez: 305-376-3611, @ReneMiamiHerald

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