10-K

Use these links to rapidly review the document
TABLE OF CONTENTS1
TABLE OF CONTENTS2

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2015
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                   to

Commission file number: 001-35886

Hemisphere Media Group, Inc.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	80-0885255 (I.R.S. Employer Identification No.)
2000 Ponce de Leon Blvd., Suite 500 Coral Gables, FL (Address of principal executive offices)	33134 (Zip Code)

(305) 421-6364
(Registrant's telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Class A common stock, $0.0001 par value	The NASDAQ Stock Market LLC

          Securities Registered Pursuant to Section 12(g) of the Act:

          Warrants to purchase Class A common stock, par value $0.0001 per share

          Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

          Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý or No o.

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý or No o.

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer o Accelerated Filer ý Non-accelerated Filer o
(Do not check if a
smaller reporting company) Smaller reporting company o

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o or No ý

          The aggregate market value of the Class A common stock held by non-affiliates of the registrant, computed by reference to the closing price as of the last business day of the registrant's most recently completed second fiscal quarter, June 30, 2015, was approximately $90,593,391. No market exists for the shares of Class B common stock, which is neither registered under Section 12 of the Act nor subject to Section 15(d) of the Act. The Class B common stock is convertible into Class A common stock on a share-for-share basis at the option of the holder. For the sole purpose of making this calculation, the term "non-affiliate" has been interpreted to exclude directors and executive officers and other affiliates of the registrant and persons affiliated with Hemisphere Media Group, Inc. Exclusion of shares held by any person should not be construed as a conclusion by the registrant, or an admission by any such person, that such person is an "affiliate" of the Company, as defined by applicable securities laws.

Class of Stock	Shares Outstanding as of March 11, 2016
Class A common stock, par value $0.0001 per share	15,635,655 shares
Class B common stock, par value $0.0001 per share	30,027,418 shares

          Documents Incorporated By Reference: The information required by Part III of this Form 10-K, to the extent not set forth herein or by amendment, is incorporated by reference from the registrant's definitive Proxy Statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A for the 2016 Annual Meeting of Shareholders.

HEMISPHERE MEDIA GROUP, INC. AND SUBSIDIARIES
INDEX TO FORM 10-K
December 31, 2015

		PAGE NUMBER
PART I
Item 1.	Business		4
Item 1A.	Risk Factors		24
Item 1B.	Unresolved Staff Comments		50
Item 2.	Properties		50
Item 3.	Legal Proceedings		50
Item 4.	Mine Safety Disclosures		50
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		51
Item 6.	Selected Financial Data		53
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		54
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		66
Item 8.	Financial Statements and Supplementary Data		66
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		66
Item 9A.	Controls and Procedures		66
Item 9B.	Other Information		67
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		68
Item 11.	Executive Compensation		68
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		68
Item 13.	Certain Relationships and Related Transactions and Director Independence		68
Item 14.	Principal Accountant Fees and Services		68
PART IV
Item 15.	Exhibits and Financial Statement Schedules		69
Signatures			73
Index to Consolidated Financial Statements and Schedule(s)			F-1

PART I

Unless otherwise indicated or the context requires otherwise, in this disclosure, references to the "Company," "Hemisphere," "registrant," "we," "us" or "our" refers to Hemisphere Media Group, Inc., a Delaware corporation and, where applicable, its consolidated subsidiaries; "Acquired Cable Networks" refers to (i) Pasiones, (ii) Centroamerica TV and (iii) Television Dominicana; "Amended Term Loan Facility" refers to our term loan facility amended on July 31, 2014 as set forth on Exhibit 10.4 to this Annual Report on Form 10-K; "Azteca" refers to Azteca Acquisition Corporation, a Delaware blank check corporation; "Business" refers collectively to our consolidated operations; "Cable Networks" refers to our Networks (as defined below) with the exception of WAPA and WAPA2 Deportes; "Cable Networks Acquisition" refers to the acquisition of the Acquired Cable Networks; "Centroamerica TV" refers to HMTV Centroamerica TV, LLC, a Delaware limited liability company; "Cinelatino" refers to Cine Latino, Inc., a Delaware corporation; "MVS" refers to Grupo MVS, S.A. de C.V., a Mexican Sociedad Anonima de Capital Variable (variable capital corporation); "Distributors" refers collectively to satellite systems, telephone companies ("telcos"), and cable multiple system operators ("MSO"s), and the MSO's affiliated regional or individual cable systems. "Networks" refers collectively to WAPA, WAPA2 Deportes, WAPA America, Cinelatino, Pasiones, Centroamerica TV and Television Dominicana; "Pasiones" refers collectively to HMTV Pasiones US, LLC, a Delaware limited liability company, and HMTV Pasiones LatAm, LLC, a Delaware limited liability company; "Television Dominicana" refers to HMTV TV Dominicana, LLC, a Delaware limited liability company; "WAPA" refers to Televicentro of Puerto Rico, LLC, a Delaware limited liability company; "WAPA America" refers to WAPA America, Inc., a Delaware corporation; "WAPA Holdings" refers to WAPA Holdings, LLC, a Delaware limited liability company, and, where applicable, its consolidated subsidiaries; "WAPA2 Deportes" refers to a sports television network in Puerto Rico operated by WAPA; "WAPA.TV" refers to a news and entertainment website in Puerto Rico operated by WAPA.

FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

        Statements in this Annual Report on Form 10-K, including the exhibits attached hereto, may contain certain statements about Hemisphere Media Group, Inc. (the "Company") and its consolidated subsidiaries that do not directly or exclusively relate to historical facts. These statements are, or may be deemed to be, "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.

        These forward-looking statements are necessarily estimates reflecting the best judgment and current expectations, plans, assumptions and beliefs about future events (in each case subject to change) of our senior management and management of our subsidiaries (including target businesses) and involve a number of risks, uncertainties and other factors, some of which may be beyond our control that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets," "plans," "believes," "expects," "intends," "will," "likely," "may," "anticipates," "estimates," "projects," "should," "would," "expect," "positioned," "strategy," "future," "potential," "plan," "forecast," or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. These include, but are not limited to, the Company's future financial and operating results, plans, objectives, expectations and intentions and other statements that are not historical facts.

        We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements.

        Forward-looking statements are not guarantees of performance. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance, or achievements may vary materially from any future results, performance or achievements expressed or

2

implied by these forward-looking statements. In addition to the risk factors described in "Item 1A—Risk Factors" in this Annual Report on Form 10-K, those factors include:

•

the reaction by advertisers, programming providers, strategic partners, the Federal Communications Commission (the "FCC") or other government regulators to businesses that we acquire;

•

the potential for viewership of our Networks' programming to decline or unexpected reductions in the number of subscribers to our Networks;

•

the risk that we may fail to secure sufficient or additional advertising and/or subscription revenue;

•

the inability of advertisers or affiliates to remit payment to us in a timely manner or at all;

•

the risk that we may become responsible for certain liabilities of the Acquired Cable Networks;

•

future financial performance, including our ability to obtain additional financing in the future on favorable terms;

•

the failure of our new or existing businesses to produce projected revenues or cash flows;

•

reduced access to capital markets or significant increases in borrowing costs;

•

our ability to successfully manage relationships with customers and Distributors and other important relationships;

•

continued consolidation of Distributors in the marketplace;

•

a failure to secure affiliate agreements or renewal of such agreements on less favorable terms;

•

disagreements with our Distributors over contract interpretation;

•

our success in acquiring, investing in and integrating complementary businesses;

•

the outcome of any pending or threatened litigation;

•

the loss of key personnel and/or talent or expenditure of a greater amount of resources attracting, retaining and motivating key personnel than in the past;

•

strikes or other union job actions that affect our operations, including, without limitation, failure to renew our collective bargaining agreements on mutually favorable terms;

•

changes in technology, including changes in the distribution and viewing of television programming, including the expanded deployment of personal video recorders, video on demand ("VOD"), internet protocol television, mobile personal devices and personal tablets and their impact on subscription and television advertising revenue;

•

the failure or destruction of satellites or transmitter facilities that we depend upon to distribute our Networks;

•

uncertainties inherent in the development of new business lines and business strategies;

•

changes in pricing and availability of products and services;

•

changes in the nature of key strategic relationships with partners and Distributors;

•

the ability of suppliers and vendors to deliver products, and services;

•

fluctuations in foreign currency exchange rates and political unrest and regulatory changes in the international markets in which we operate;

•

the deterioration of general economic conditions, either nationally or in the local markets in which we operate, including, without limitation, the Commonwealth of Puerto Rico;

3

•

changes in the size of the U.S. Hispanic population, including the impact of federal and state immigration legislation and policies on both the U.S. Hispanic population and persons emigrating from Latin America;

•

changes in, or failure or inability to comply with, government regulations including, without limitation, regulations of the FCC, and adverse outcomes from regulatory proceedings; and

•

competitor responses to our products and services.

        The list of factors above is illustrative, but by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty. All subsequent written and oral forward-looking statements concerning the matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are qualified by these cautionary statements.

        The forward-looking statements are based on current expectations about future events and are not guarantees of future performance, and are subject to certain risks, uncertainties and assumptions. Although we believe that the expectations reflected in the forward-looking statements are reasonable, these expectations may not be achieved. We may change our intentions, beliefs or expectations at any time and without notice, based upon any change in our assumptions or otherwise. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 1.    Business.

OVERVIEW

Our Company

        We are a leading U.S. Spanish-language media company serving the fast growing and highly attractive U.S. Hispanic and Latin American markets with five Spanish-language cable television networks distributed in the U.S., two Spanish-language cable television networks distributed in Latin America, and the #1-rated broadcast television network in Puerto Rico.

        Headquartered in Miami, Florida, we own and operate the following leading Spanish-language networks and content production platform, including leading movie and telenovela channels, two of the most popular Hispanic entertainment genres, and the leading cable television networks targeting the second, third and fourth largest U.S. Hispanic groups:

Cinelatino: the leading Spanish-language cable movie network with over 16 million subscribers across the U.S., Latin America and Canada, including 4.4 million subscribers in the U.S. and 11.9 million subscribers in Latin America. Cinelatino is programmed with a lineup featuring the best contemporary films and original television series from Mexico, Latin America, the U.S. and Spain. Driven by the strength of its programming and distribution, Cinelatino is the #1-rated Spanish-language cable movie network in the U.S. and the #2-rated Spanish-language cable television network in the U.S. overall.

4

	WAPA: the leading broadcast television network and television content producer in Puerto Rico. WAPA has been the #1-rated broadcast television network in Puerto Rico for the last seven years. WAPA is Puerto Rico's news leader and the largest local producer of entertainment programming, producing over 75 hours each week of programming that is aired on WAPA and WAPA America. Through WAPA's multicast signal, we distribute WAPA2 Deportes, a leading sports television network in Puerto Rico, featuring Major League Baseball (MLB), National Basketball Association (NBA) and professional sporting events from Puerto Rico. Additionally, we operate WAPA.TV, the leading broadband news and entertainment website in Puerto Rico featuring news and content produced by WAPA.
	WAPA America: a cable television network serving primarily Puerto Ricans and other Caribbean Hispanics in the United States, collectively the second largest segment of the U.S. Hispanic population. WAPA America's programming features news and entertainment offerings produced by WAPA. WAPA America is distributed in the U.S. to over 5.0 million subscribers.
	Pasiones: a cable television network dedicated to showcasing the best telenovelas and serialized dramas, licensed from the most important producers. Pasiones is distributed in the U.S. to 4.4 million subscribers and in Latin America to 10.2 million subscribers.
	Centroamerica TV: a cable television network targeting Central Americans, the third largest U.S. Hispanic group and the fastest growing segment of the U.S. Hispanic population. Centroamerica TV features the most popular news and entertainment from Central America, as well as soccer programming from the top professional soccer leagues in the region. Centroamerica TV is distributed in the U.S. to 4.0 million subscribers.
	Television Dominicana: a cable television network targeting Dominicans living in the U.S., the fourth largest U.S. Hispanic group. Television Dominicana features the most popular news and entertainment from the Dominican Republic, as well as the professional winter baseball league from the Dominican Republic. Television Dominicana is distributed in the U.S. to 3.0 million subscribers.

        Hemisphere was incorporated in Delaware on January 16, 2013. On April 4, 2013, we completed a series of mergers pursuant to which WAPA Holdings, Cinelatino and Azteca, each became our indirect wholly-owned subsidiaries, which we refer to as the Transaction. Azteca, a special purpose acquisition vehicle, delivered the proceeds of a trust account raised in its 2011 initial public offering to us in the Transaction. Since the consummation of the Transaction, Azteca has had no operations and was subsequently dissolved on December 31, 2013. Shares of our Class A common stock, par value $0.0001 per share ("Class A common stock") are publicly traded under the symbol "HMTV" on the Nasdaq Global Market ("NASDAQ"). Our warrants, exercisable for shares of Class A common stock

5

("Warrants"), are publicly traded on the Over-the-Counter Bulletin Board under the ticker symbol "HMTVW."

        On April 1, 2014, we closed a transaction in which we acquired the assets of the following three Spanish-language cable television networks: Pasiones, Centroamerica TV and Television Dominicana, which we refer to as the Acquired Cable Networks.

Our Strategy

        Our strategy is to provide unique programming focused on underserved but significant segments of the U.S. Hispanic population, allowing us to reach a deeper and broader U.S. Hispanic demographic than our competitors. Our objective is to maintain and improve our position as a leading U.S. Spanish-language media company by, among other things, (i) investing in content for our Networks to build viewership, (ii) growing retransmission fees in Puerto Rico and subscriber revenues in both the U.S. and Latin America, and (iii) driving advertising sales, including advertising on Cinelatino in the U.S. which was converted to ad-supported in July 2015. Additionally, we continue to look for attractive opportunities to acquire assets that we consider to be undervalued or fairly valued with attractive financial or strategic characteristics. We intend to take a long-term view and primarily seek opportunities which will (i) expand our leadership position in the fast growing and highly desirable U.S. Hispanic pay-TV market and (ii) expand our portfolio within broadcast networks, and/or cable networks in Latin American. We may also seek a variety of acquisition opportunities, including businesses where we believe an opportunity for value realization is already present, where we can realize synergies with our existing businesses, or that are in need of operational turnaround, which we believe would benefit from our experienced and cohesive management team with the proven ability to develop and grow acquired assets. Additionally, we evaluate various digital strategies, from time to time.

Employees

        At December 31, 2015, we and our subsidiaries employed 300 full-time persons. In the normal course of business, we use contract personnel to supplement our employee base to meet business needs. We or our subsidiaries may hire additional personnel in connection with the closing of future acquisitions. We believe that employee relations are generally satisfactory. Approximately 152 of our employees based in Puerto Rico are full-time unionized employees covered by two collective bargaining agreements (each, a "CBA" and collectively, the "CBAs"), one of which was scheduled to expire on July 23, 2015 and the other which expires on June 27, 2016. Pursuant to its terms, the CBA which was scheduled to expire on July 23, 2015 automatically renewed for a period of eighteen (18) months upon such expiration date and remains in effect through January 23, 2017 while the Company and the employees' union, Union de Periodistas Artes Graficas y Ramas Anexas (UPAGRA), negotiate its renewal. For more information, see Note 11, "Retirement Plans" of Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K.

Revenue Sources

        We operate our business in one operating segment. Our two primary sources of revenue are advertising revenues and retransmission/subscriber fees. All of our networks generate both advertising revenues and retransmission/subscriber fees. Cinelatino had been commercial-free, and generated 100% of its revenue from subscriber fees. However, to further monetize Cinelatino's strong ratings and attractive audience, we introduced advertising on Cinelatino's U.S. feed in July 2015. Advertising revenue is generated from the sale of advertising time. Our advertising revenue tends to reflect seasonal patterns of our advertisers' demand, which is generally greatest during the fourth quarter of each year, driven by the holiday buying season. In addition, Puerto Rico's political election cycle occurs every four years and WAPA benefits from increased advertising sales in an election year. For example, in 2012, WAPA experienced higher advertising sales as a result of political advertising spending during the 2012 governmental elections. The next election in Puerto Rico will be in 2016.

6

        Retransmission and subscriber fees are charged to Distributors of our television networks, including cable, satellite and telecommunication service providers. Our television networks are distributed pursuant to multi-year agreements that generally provide for monthly subscriber fees with annual rate increases and have terms of varying length. For the year ended December 31, 2015, revenue earned under affiliation agreements with DISH Network, LLC accounted for more than 10% of our total net revenues. We recognize retransmission and subscriber fees when they are accrued pursuant to the agreements we have entered into with respect to such revenue. We set forth our net revenue, total assets and operating income in "Item 8. Financial Statements and Supplementary Data."

        We generate over 90% of our net revenues from the United States. For the years ended December 31, 2015, 2014 and 2013, we generated $120.6 million, $103.7 million and $81.7 million, respectively, from the United States. For the years ended December 31, 2015, 2014 and 2013, we generated $9.2 million, $8.3 million and $4.1 million, respectively, from outside the United States.

OUR NETWORKS

WAPA

        Headquartered in San Juan, Puerto Rico, WAPA is a full-power independent broadcast television network. WAPA was founded in 1954 as the second broadcast television network in the Caribbean and the third in Latin America. WAPA occupies a prime channel position (channel 4), and together with its full-power repeater stations, WTIN in Ponce and WNJX in Mayagüez, reaches the entire island with the strongest television signal in Puerto Rico. WAPA reaches more television households than any of its competitors in Puerto Rico. WAPA is also distributed by all cable, satellite and telecommunication service providers in Puerto Rico. WAPA has been the #1-rated broadcast television network in Puerto Rico for seven consecutive years, with an average household primetime rating of 16.8 and audience share of 30.3% in the year ended December 31, 2015.

        WAPA owns a 66,500 square foot building housing WAPA Holdings' state-of-the-art production facilities, television studios, and administrative offices. All of WAPA's news and most of its local programs are produced at WAPA's production facility, which contains four television studios, including the largest television studio in the Caribbean, fully equipped control rooms, digital video, audio, editing, post editing, and graphic production suites, and a scenery shop which produces all scenery and props for the local productions. WAPA also boasts one of the most technologically advanced news departments in Puerto Rico.

        WAPA is Puerto Rico's news leader and the largest local producer of entertainment programming, producing over 75 hours in the aggregate each week. In addition to having the top-rated morning, mid-day, evening and late night newscast, WAPA's top-rated local shows include Pégate al Mediodía (the #1-rated midday program), and Lo Se Todo (the #1-rated daily show). WAPA also licenses and televises blockbuster Hollywood movies and top-rated U.S. television series dubbed into Spanish. This diverse and unique mix of programming has made WAPA the market leader in Puerto Rico.

        In 2009, WAPA launched WAPA2 Deportes in Puerto Rico through its over-the-air signal and carriage by all cable, satellite and telecommunications distributors in Puerto Rico. WAPA2 Deportes broadcasts various local and U.S. sports programming, including MLB, with exclusive television rights to the World Series and the All-Star Game, NBA and Puerto Rico's professional men's basketball league, Baloncesto Superior Nacional. In a short period of time, WAPA2 Deportes has become the leading local sports network in Puerto Rico.

        In 2008, WAPA launched WAPA.TV, the #1-rated television network website in Puerto Rico and the #5 ranked Puerto Rico-originated web site. WAPA.TV provides up-to-the-minute news and weather, promotional clips of WAPA's most popular shows, additional video content not seen on WAPA, and a platform for viewers to share comments and interact, driving further audience

7

engagement. As of December 31, 2015, WAPA.TV's mobile web version, WAPA Movil, had 82.7 million total page views, 40.2 million total visits and over 1.3 million monthly unique visitors.

WAPA America

        WAPA America, launched in 2004, is a Spanish-language cable television network targeting viewers from Puerto Rico, the Dominican Republic, Cuba, Venezuela and Colombia (collectively referred to as "Caribbean Hispanics"), residing in the U.S. Caribbean Hispanics are the second largest U.S. Hispanic population segment, representing 18% of the U.S. Hispanic population. Puerto Ricans in particular are an attractive subset of the U.S. Hispanic market with a purchasing power index of 113 as compared to other Hispanics. WAPA America is distributed by all major U.S. cable, satellite and telecommunication operators to over 5.0 million subscribers. WAPA America televises over 75 hours per week of the top-rated news and entertainment programming produced by WAPA. WAPA America supplements its programming with acquired telenovelas and cultural programming, popular sports programming from Puerto Rico and other programming from WAPA's library.

        WAPA America is primarily distributed on Hispanic programming packages, which generally consist of 20 or more channels, such as Cinelatino, Pasiones, Centroamerica TV, Television Dominicana, CNN en Español, Discovery en Español, History en Español, ESPN Deportes and Fox Deportes (together, "Hispanic Programming Packages"). WAPA America is also distributed in more highly penetrated packages in the major markets of Orlando and Tampa. Hispanic pay-TV subscribers in the U.S. are expected to grow, driven by the continued long-term growth in Hispanic television households and by increased penetration of pay-TV among Hispanics. We expect to capitalize on this strong growth. For more information, see "—Industry."

Cinelatino

        Cinelatino is the leading Spanish-language cable movie network with over 16 million subscribers across the U.S., Latin America and Canada. Cinelatino is programmed with a lineup featuring what it believes to be the best contemporary films and original television series from Mexico, Latin America, the U.S. and Spain. Cinelatino was launched in Mexico in 1993, and introduced into the U.S. in 1995.

        Our programming strategy for Cinelatino is specifically intended to provide the audience with the broadest selection of the most popular and highest-quality films across all of the popular genres, from Mexico and all other Latin American countries which have significant populations in the U.S., including Puerto Rico, the Dominican Republic, Colombia and Venezuela. Consistent with its programming strategy, Cinelatino has licensed the rights to many of the highest grossing box office films in Mexico each year from 2009 to 2014. Additionally, in 2014, we acquired a Spanish-language film library of 100 titles. This has provided us with substantial additional content, and will be a source of content for our channel as well as content available for us to license to over-the-top platforms. Cinelatino has an expansive library of over 600 of the best Spanish-language titles from suppliers across the globe. Driven by the strength of its programming and distribution, Cinelatino is the #1-Nielsen rated Spanish-language cable movie network in the U.S. and the #2-Nielsen rated Spanish-language cable television network in the U.S. overall. Beginning in July 2015 Cine Latino began accepting advertising.

        Cinelatino has two feeds of its service, one that is distributed in the U.S., and a second that is distributed throughout Latin America and Canada. Cinelatino is distributed by all major U.S. cable, satellite and telecommunications operators on Hispanic Programming Packages. Hispanic pay-TV subscribers in the U.S. are expected to grow, driven by the continued long-term growth in Hispanic television households and by increased penetration of pay-TV among Hispanics. We expect to capitalize on this strong growth. For more information, see "—Industry."

        Cinelatino is also distributed by many Latin American pay television distributors, generally on basic video packages, and has more than 12 million subscribers in more than 15 countries throughout Latin America. Cinelatino is presently distributed to only 23% of all pay-TV subscribers throughout

8

Latin America (excluding Brazil), representing a significant growth opportunity. Additionally, we have licensed movies on a limited basis for over-the-top digital services.

Pasiones

        Pasiones, launched in August 2008, focuses on one of the most popular program genres among Hispanics, telenovelas. The network sets itself apart by showcasing telenovelas produced in Latin America and Asia (dubbed into Spanish), in contrast to most competitor networks, which focus exclusively on Mexican telenovelas. In owning both Pasiones and Cinelatino, we provide content in two of the most popular genres with Hispanics, telenovelas and movies.

        Pasiones has two feeds of its service, one that is distributed in the U.S. and a second that is distributed throughout Latin America. Pasiones is distributed by all major U.S. cable, satellite and telecommunications operators on Hispanic Programming Packages, and has approximately 4.4 million U.S. subscribers. Hispanic pay-TV subscribers in the U.S. are expected to grow, driven by the continued long-term growth in Hispanic television households and by increased penetration of pay-TV among Hispanics. We expect to capitalize on this strong growth. For more information, see "—Industry."

        Pasiones is also distributed by many Latin American distributors, generally on basic video packages, and has 10.2 million Latin American subscribers. Pasiones is presently distributed to only 20% of total pay-TV subscribers throughout Latin America (excluding Brazil), representing a significant growth opportunity.

Centroamerica TV

        Centroamerica TV, launched in September 2004, is the leading network targeting the nearly 6 million Central Americans living in the U.S. Central Americans are the third largest U.S. Hispanic population group, and represent the fastest growing segment of the U.S. Hispanic population, having grown 265% from 2000-2015. Centroamerica TV features news and entertainment programming from leading television broadcast networks in El Salvador, Honduras, Costa Rica, Guatemala, and Panama, as well as exclusive soccer programming from the top professional leagues in the region.

        Centroamerica TV has 4.0 million subscribers in the U.S. and is distributed on Hispanic Programming Packages. Hispanic pay-TV subscribers in the U.S. are expected to grow, driven by the long-term growth in Hispanic television households and by increased penetration of pay-TV among Hispanics. We expect to capitalize on this strong growth. For more information, see "—Industry."

Television Dominicana

        Television Dominicana, launched in November 2005, is the leading network targeting the 2.3 million Dominicans living in the U.S. Dominicans are the fourth largest U.S. Hispanic population group and have grown by 201% between 2000-2015. Television Dominicana features news and entertainment programming from leading content producers in the Dominican Republic, as well as exclusive rights to the Dominican Republic professional baseball league.

        Television Dominicana currently has 3.0 million subscribers in the U.S. and is distributed on Hispanic Programming Packages. Hispanic pay-TV subscribers are expected to grow, driven by continued long-term growth in Hispanic television households and by increased penetration of pay-TV among Hispanics. We expect to capitalize on this strong growth. For more information, see "—Industry."

OUR COMPETITION

        We compete for the development and acquisition of programming, distribution of our Networks, selling of commercial time on our Networks, viewership to our networks, and on-air and creative talent. Our Networks compete with other Spanish-language broadcast and cable television networks and digital media companies for the acquisition of programming, viewership, the sale of advertising and creative talent. Our ability to produce and acquire popular content impacts our viewership and the sale of advertising.

9

        We also compete with both Spanish-language and English-language broadcast and cable television networks for distribution of our Networks and the fees paid by cable, satellite and telecommunication service providers. Our ability to retain and secure distribution agreements is necessary to maintain and grow subscriber fees, and to attain viewership which drives advertising sales. Our contractual agreements with Distributors are renewed or renegotiated from time to time in the ordinary course of business. The launch of new networks and consolidation within the cable and satellite distribution industry may adversely affect our ability to obtain and maintain distribution of our Networks.

        Certain technological advances, including the increased deployment of fiber optic cable, are expected to allow cable and telecommunication video service providers to continue to expand both their channel and broadband distribution capacities and to increase transmission speeds. In addition, the ability to deliver content via new methods and devices is expected to increase substantially. The impact of such added capacities is hard to predict, but the development of new channels of content distribution could lead to increased competition for viewers by facilitating the emergence of additional channels and mobile and internet platforms through which viewers could view programming that is similar to that offered by our subsidiaries.

        WAPA competes with broadcast television networks and cable television networks in Puerto Rico for audience viewership, advertising sales, and programming. WAPA's main competitors are broadcast television stations owned by Univision and Telemundo, which rely heavily on their U.S. parents for programming, which consists primarily of telenovelas produced in Mexico, the U.S. and Latin America. There are a few other local broadcasters, but they tend not to be competitive due to weak programming and/or poor signal quality. WAPA reaches more television households in Puerto Rico than any of its competitors. In addition, while all major English-language U.S. broadcast networks have local affiliates, they are, for the most part, low power stations with nominal ratings. Only approximately half of the television households in Puerto Rico subscribe to pay-TV and cable channels are generally not competitive, as they tend to be U.S.-based, English-language channels with little relevance to the Puerto Rico Spanish-speaking market. WAPA has effectively customized its programming for the viewing preferences of the Puerto Rican market with more local entertainment and news programming than its competitors, as well as blockbuster Hollywood movies and hit U.S. television series (dubbed into Spanish). As a result, WAPA has been the ratings leader for the past seven years. WAPA2 Deportes competes for viewership, advertising sales and programming with other channels offering similar sports programming in Puerto Rico. Competitors include U.S.-based cable networks, such as ESPN, TNT, and TBS, and certain satellite distributors who have acquired sports media rights for their owned channels. WAPA.TV, including its mobile version, WAPA Movil compete with other news, weather and entertainment websites for development and acquisition of content, audience and advertising sales. To an extent, WAPA.TV and WAPA Movil also compete with U.S. search engines and social networks, such as Google, Facebook and Yahoo, for website traffic.

        Many of our competitors may possess greater resources than us, and our financial resources may be relatively limited when contrasted with many of these competitors.

INTELLECTUAL PROPERTY

        Our intellectual property assets principally include copyrights in television programming, websites and other content, trademarks in brands, names and logos, domain names and licenses of intellectual property rights of various kinds. The protection of our Networks' brands and content is of primary importance to our success. To protect our intellectual property assets, we rely upon a combination of copyright, trademark, unfair competition, trade secret and internet/domain name statutes, laws and contractual provisions. However, there can be no assurance of the degree to which these measures will be successful in any given case. Moreover, effective intellectual property protection may be either unavailable or limited in certain foreign territories. Policing unauthorized use of our products and services and related intellectual property is difficult and costly. We seek to limit unauthorized use of

10

our intellectual property through a combination of approaches. However, the steps taken to prevent the infringement of our intellectual property by unauthorized third parties may not work.

        Third parties may challenge the validity or scope of our intellectual property from time to time, and the success of any such challenges could result in the limitation or loss of intellectual property rights. Irrespective of their validity, such claims may result in substantial costs and diversion of resources which could have an adverse effect on our operations. In addition, piracy, which encompasses the theft of our signal, and unauthorized use of our content in the digital environment continues to present a threat to revenues from products and services based on intellectual property.

INDUSTRY

U.S. Hispanic Market

        The U.S. Census Department estimated that over 55 million Hispanics resided in the United States in 2014, representing an increase of approximately 20 million people between 2000 and 2014. Hispanics represent the largest minority group in the U.S. at over 17% of the total U.S. population and accounted for half of the total U.S. population growth between 2000 and 2014. This trend is expected to continue as the U.S. Hispanic population is projected to grow to 70 million by 2025, an increase of 27% from 2014. As a result of this growth, the U.S. Hispanic market represents the second largest Hispanic economy in the world after Mexico. In 2015 about 67% of the U.S. Hispanic population reported their origin as Mexican, followed by Puerto Rican, the second largest Hispanic national group, at over 9%. In addition, the Hispanic population on average is significantly younger than the overall population. For example, the median age of U.S. Hispanics is 29, which is 14 years younger than the median age for non-Hispanic whites.

        Puerto Ricans are the second-largest Hispanic national community in the U.S. behind Mexican Americans. There are 5.4 million Puerto Ricans and an additional 5.3 million Hispanics from other Caribbean countries residing in the U.S., and together, Puerto Ricans and other Caribbean Hispanics represent more than 18% of the total U.S. Hispanic population. The Puerto Rican population in the U.S. grew 58% from 2000 to 2015, while the overall Caribbean Hispanic population grew 78% during the same time period, including the Dominican population which grew 201% between 2000-2015.

Caribbean Hispanics (WAPA America and Television Dominicana target audience)

Place of Origin	Population 2015		% of U.S. Hispanics
Puerto Rico		5,368,991		9.2	%
Dominican Republic		2,300,278		4.0	%
Cuba		1,704,956		2.9	%
Colombia		976,129		1.7	%
Venezuela		288,349		0.5	%
Total Caribbean Hispanics		10,638,703		18.3	%

Source: 2015 Geoscape

        Central Americans are the third largest U.S. Hispanic regional population group in the U.S. (behind Mexicans and Caribbean Hispanics), and represent the fastest growing segment of the U.S Hispanic population. There are 5.8 million Central Americans residing in the U.S., an increase of 263% since 2000. Central Americans comprised approximately 10% of the U.S. Hispanic population in 2015, compared to approximately 4% in 2000.

11

Central American Hispanics (Centroamerica TV target audience)

Place of Origin	Population 2015		% of U.S. Hispanics
El Salvador		2,507,700		4.3	%
Guatemala		1,552,782		2.7	%
Honduras		695,049		1.2	%
Nicaragua		412,251		0.7	%
Panama		352,091		0.6	%
Costa Rica		232,937		0.4	%
Total Central American Hispanics		5,752,810		9.9	%

Source: 2015 Geoscape

Hispanic Television and Pay-TV Landscape

        Within the U.S. cable network industry, the U.S. Hispanic demographic is attractive for a number of reasons:

•

Growth in Hispanic TV households: U.S. Hispanic television households grew by 35% during the period from 2006 to 2016, from 11.2 million households to 15.1 million households, approximately six times the overall U.S. television household growth of only 6%. The continued long-term growth of Hispanic television households creates a significant opportunity to reach an attractive audience at a time when overall household growth in the U.S. is more modest.

•

Growth in Hispanic pay-TV subscribers: Hispanic pay-TV subscribers are expected to grow significantly, driven not only by the rapid growth in Hispanic television households, but also by the increased penetration of pay-TV among Hispanics. Hispanic pay-TV subscribers increased 53% from 2006 to 2016, growing from 7.9 million to 12.1 million subscribers, over 10 times the 5% increase in overall U.S. pay-TV subscribers during the same period. This 53% growth also significantly over-indexes the 35% Hispanic television household growth during the same period.

Television Viewing and Language Preferences

•

Hispanics Enjoy Movies: In 2014, Hispanics made up over 17% of the U.S. population, but accounted for 21% of movie ticket sales. In fact, the President of the National Association of Theater Owners, recently described Hispanics as "the most valuable component of moviegoers."

•

Hispanics Prefer Television in Spanish: Spanish remains the most used language in the home by U.S. Hispanic adults, and this powerfully influences television viewing habits. According to Nielsen, more than 59% of Hispanics aged 18 and over speak Spanish as much as or more than English in their homes. Spanish-dominant or bilingual (Spanish/English Equal) homes comprise about 64% of U.S. Hispanic households, and these homes exhibit a strong preference to watch television in their native language. Spanish-dominant households view 61% of television in Spanish and bilingual homes view about 35% of television in Spanish.

Hispanic Advertising Market

        Persons living in Hispanic households represent over 17% of the total U.S. population and approximately 10% of the total U.S. buying power, but only 7% of the aggregate media spend targets U.S. Hispanics. As a result, advertisers have been allocating a higher proportion of marketing dollars to the Hispanic market, but U.S. Hispanic cable advertising still under-indexes relative to its consumption.

        U.S. Hispanic cable advertising growth has significantly outpaced overall U.S. cable advertising growth as well as Hispanic broadcast advertising growth. U.S. Hispanic cable advertising revenue grew

12

at a 13% CAGR from 2009 to 2015, more than doubling from $204 million to $436 million. Going forward, U.S. Hispanic cable advertising is expected to continue to grow at a 13% CAGR from 2015 to 2019, outpacing forecasted growth for U.S. cable advertising, U.S. Hispanic broadcast advertising and U.S. general market broadcast advertising.

        Similar to the under-indexing of U.S. general market cable advertising relative to viewing share 25 years ago, U.S. Hispanic cable advertising today significantly under-indexes relative to its share of the Spanish-language television audience. In 2015, U.S. Hispanic cable networks garnered only 12% of total U.S. Hispanic television advertising, while accounting for a 20% share of total Spanish-language television viewing. Viewing to Spanish-language cable networks as a percentage of total Spanish-language television viewing has grown dramatically from 11% in 2007 to 20% in 2015.

Latin American Market (excluding Brazil)

        Latin America remains an attractive region due to its large population, shared language, strong economic growth and growing discretionary spending. Pay-TV subscribers in Latin America grew by 32% from 2012 to 2015, and are projected to grow an additional 15 million from 51 million in 2015 to 66 million by 2020 representing projected growth of approximately 29%. Pay-TV penetration of television households has expanded from 44% in 2012 to 54% in 2015 and is projected to reach 62% by 2020. This growth is expected to be driven by a sizeable and growing population, as well as a strong macroeconomic backdrop and rising disposable income across geographies. In addition, investments in network infrastructure have improved service and performance, leading to increased penetration for pay-TV operators.

Puerto Rico Overview

        The Commonwealth of Puerto Rico is a U.S. territory and has a U.S. dollar-based economy, U.S. rule of law and strong governmental ties to the United States. The broadcast television industry in Puerto Rico is regulated by the U.S. Federal Communications Commission, and the banking system is regulated under the U.S. system (Federal Deposit Insurance Corporation). Puerto Rico has a population of approximately 3.5 million, with an additional 5.4 million Puerto Ricans living in the mainland U.S. All Puerto Ricans are U.S. citizens.

Economy

        Once one of the poorest islands in the Caribbean, it now has the highest GDP per capita in the region. Puerto Ricans are considered citizens of the United States and the territory receives appropriations from the federal government. Puerto Rico's economy has declined each year since 2006, except for modest growth in 2012. Economic activity in Puerto Rico remains generally flat at a depressed level and there are no strong signs that a meaningful recovery is taking hold. While the Puerto Rican economy is strongly influenced by the U.S. business cycle, Puerto Rico's latest downturn started earlier and was much steeper and more prolonged than that which occurred in the U.S. This prolonged recession is due to the long-term decline in the dominant manufacturing sector, decreased competitiveness as a result of expired federal tax benefits and high energy costs. The economic hardship has been exacerbated by years of budgetary imbalance that has been funded through increased governmental borrowings. As a result, Puerto Rico's government is dealing with a poor fiscal condition, high unemployment rate and an extremely low labor force participation rate.

        On June 28, 2015, the Governor of Puerto Rico and the Government Development Bank for Puerto Rico released a report by former World Bank Chief Economist and former Deputy Director of the International Monetary Fund, Dr. Anne Krueger, and economists Dr. Ranjit Teja and Dr. Andrew Wolfe that analyzes the full extent of the Commonwealth's fiscal condition including revenues, expenditures, deficits, and current and future obligations. It also makes recommendations for a

13

five-year fiscal adjustment plan. The Krueger Report states that Puerto Rico faces an acute crisis in the face of faltering economic activity, fiscal solvency debt sustainability, and institutional credibility. On June 29, 2015, the Governor of Puerto Rico announced that the Government will seek alternatives to ensure that the aggregate debt burden of the Commonwealth is adjusted so it can be repaid on sustainable terms, while ensuring pension obligations are honored over the long term and essential services for the people of Puerto Rico are maintained, and issued an Executive Order to create the Puerto Rico Fiscal and Economic Recovery Working Group. After the announcement, the top three credit rating agencies, Moody's, S&P and Fitch downgraded the Puerto Rico issued bonds deeper into non-investment grade status.

        Following the Kruger Report and the Governor's announcement, economic conditions in Puerto Rico have further deteriorated and continue to be uncertain. Persistent deficits in the territory's fiscal accounts, as well as mounting deficits in the operation of several major public corporations have substantially raised Puerto Rico's overall public debt to $72 billion. On August 3, 2015, Puerto Rico's Government Development Bank failed to make a $58 million payment in full due on behalf of the Public Finance Corporation, citing lack of appropriated funds for such payment, which prompted Moody's to declare an event of default. On January 4, 2016, the Government Development Bank purposefully elected to default on a $174 million payment behalf of the Public Finance Corporation and Infrastructure Financing Authority to certain lower ranked creditors (in lieu of making a payment in full to higher ranked creditors), which prompted Standard & Poor's to downgrade the rating for Puerto Rico Infrastructure Financing Authority bonds from CC to D. Following Puerto Rico's second default, the U.S. Department of the Treasury urged Congress to enact legislation under the Territorial Clause of the U.S. Constitution to provide Puerto Rico with the power to restructure its approximately $72 billion in debt and other liabilities through the courts and with federal oversight. Congress seeks to review specific legislation addressing Puerto Rico's debt obligations by the end of March 2016. It is unclear if and when any specific legislation will be approved and, if approved, whether such legislation will have retroactive effect for the commonwealth's outstanding debt. The economic outlook is expected to remain negative.

Puerto Rico Broadcast Television Market

        Puerto Rico has 1.4 million television households, comparable to that of a top 20 U.S. television market. Puerto Rico is the third largest U.S. Hispanic market behind Los Angeles and New York.

        Puerto Rican television broadcasters capture the dominant share of viewership, which is unique relative to the U.S. The three primary broadcasters in Puerto Rico—WAPA, Univision and Telemundo—collectively garner approximately 70% of all television household viewership in primetime, distinguishing Puerto Rico from the U.S. television market, where the four major national broadcast networks (ABC, CBS, NBC and Fox) garner a collective primetime audience share of less than 40%. In fact, WAPA's primetime household rating in 2015 was nearly four times higher than the most highly rated English-language U.S. broadcast network in the U.S., CBS, and higher than the combined ratings of CBS, NBC, ABC, FOX and the CW.

GOVERNMENT REGULATION

        Our broadcast and cable network operations are subject to regulation by governmental authorities in the United States, Puerto Rico and other countries where they operate. The rules, regulations, policies and procedures affecting our Business are constantly subject to change. This section contains a summary of certain government regulations that may affect our operations. This information is summary in nature and does not purport to describe all present and proposed laws and regulations affecting our Business.

14

Introduction

        Our Networks are subject to regulation by the FCC under the Communications Act of 1934, as amended ("Communications Act"). Under authority of the Communications Act, the FCC, among other things, assigns frequency bands for broadcast stations, including the WAPA station, and other uses; determines the location, frequency and operating power of stations; grants permits and licenses to construct and operate television stations on particular frequencies; issues, revokes, modifies and renews television broadcast station licenses; regulates equipment used by stations; determines whether to approve changes in ownership or control of station licenses; and adopts and implements regulations and policies which directly or indirectly affect the ownership, operations and profitability of broadcasting stations.

        The FCC has also adopted various rules that regulate the content of programming broadcast by television stations, including the WAPA stations, and carried by cable networks, including our Cable Networks. These rules regulate, among other things, children's programming, sponsorship identification disclosures, closed captioning of certain television programming, and obscene, indecent and profane content. Additionally, the FCC's rules require broadcast stations to implement equal employment opportunity outreach programs and maintain records relating to these programs and make filings with the FCC evidencing such efforts. The FCC could also adopt other regulations that affect cable networks, such as the requirement that the cable programming services be on an "á la carte" basis, which could affect their business operations.

        The following is a brief summary of certain provisions of the Communications Act, and specific FCC rules and policies and certain other statutes and regulations. The summaries are not intended to describe all present and proposed statutes and FCC rules and regulations that impact broadcast television and cable network operations. Failure to observe the provisions of the Communications Act and the FCC's rules and policies can result in the imposition of various sanctions, including monetary forfeitures, the grant of "short-term" (less than the maximum term) broadcast license renewals or, for particularly egregious violations, the denial of a broadcast license renewal application, the revocation of a broadcast license, or the withholding of approval for acquisition of additional broadcast properties.

FCC Licenses and Renewal

        The Communications Act permits the operation of a broadcast station only in accordance with a license issued by the FCC upon a finding that the grant of a license would serve the public interest, convenience and necessity. The FCC grants broadcast licenses for specified periods of time and, upon application, may renew the licenses for additional terms (ordinarily for the full term of eight years). Generally, the FCC renews a broadcast license upon a finding that (i) the broadcast station has served the public interest, convenience and necessity; (ii) there have been no serious violations by the licensee of the Communications Act or the FCC's rules; and (iii) there have been no other violations by the licensee of the Communications Act or other FCC rules which, taken together, indicate a pattern of abuse. After considering these factors, the FCC may renew a broadcast station's license, either with conditions or without, or it may designate the renewal application for hearing. In 2013, the FCC renewed our television licenses for full eight year terms expiring in 2021.

Media Ownership Restrictions and FCC Proceedings

        The FCC's broadcast ownership rules affect the number, type and location of broadcast and newspaper properties that we are allowed to hold or acquire. The rules now in effect limit the common ownership, directly or by way of attribution, operation or control of: (i) television stations serving the same area; (ii) television stations and daily newspapers serving the same area; and (iii) television stations and radio stations serving the same area. The rules also limit the aggregate national audience reach of television stations under common ownership, directly or by way of attribution. The FCC's rules

15

also define the types of positions and interests that are considered attributable for purposes of the ownership limits. In general, officers, directors and stockholders holding 5% or more of the voting interests in Hemisphere are deemed to have attributable interests. The FCC's ownership limits therefore apply to our principals and certain investors in our Company.

        The FCC is required by statute to review all of its broadcast ownership rules every four years to determine if such rules remain necessary in the public interest. The FCC must review its media ownership rules every four years. In April, 2014, the FCC issued a Further Notice of Proposed Rulemaking to initiate its 2014 quadrennial review of the multiple ownership rules. The FCC determined that the record from the 2010 quadrennial review—which proposed changes to the newspaper-broadcast cross-ownership rule and the elimination of the radio-television cross-ownership rule—be incorporated as part of the 2014 review. The FCC also requested comments on whether local news service agreements and/or shared services agreements should be considered attributable for purposes of applying the media ownership restrictions. The FCC has indicated that it will more closely scrutinize arrangements that involved shared services agreements.

Local Television Ownership Rule

        Under the local television ownership rule, one party may own, operate, or control up to two television stations in a market, so long as the market would have at least eight independently owned full power television stations after the combination and at least one of the stations is not one of the top-four-rated stations (based on audience share) in the television market. The rule also permits the ownership, operation or control of two television stations in a market as long as the stations' Noise Limited Service contours do not overlap. In 2011 the FCC sought comments on its proposal to eliminate the contour overlap exception that permits common ownership of two television stations in the same market. At that time, the FCC proposed to grandfather existing common ownership of stations that would not be permitted after the elimination of this exception. The matter remains pending. Broadcast stations designated by the FCC as "satellite" stations are exempt from the local television ownership rule. WNJX-TV and WTIN-TV have been designated by the FCC as "satellite" stations of WAPA-TV, a division of WAPA. The FCC may also waive its local television ownership rule to permit ownership, operation or control of two television stations in a market that would not otherwise be permissible if one of the stations is in involuntary bankruptcy, is a "failed" station, or is "failing" (i.e., stations with negative cash flow and less than a four share all day audience rating). Under the local television ownership rule, the licensee of a television station that provides more than 15% of another in-market station's weekly programming or advertising will be deemed to have an attributable interest in the other station.

Radio-Television Cross-Ownership Rule

        The radio-television cross-ownership rule generally allows common ownership of one or two television stations and up to six radio stations, or, in certain circumstances, one television station and seven radio stations, in any market where at least 20 independent voices would remain after the combination; two television stations and up to four radio stations in a market where at least 10 independent voices would remain after the combination; and one television and one radio station notwithstanding the number of independent voices in the market. A "voice" generally includes independently owned, same-market commercial and noncommercial broadcast television and radio stations, newspapers of certain minimum circulation, and one cable system per market.

Newspaper-Broadcast Cross-Ownership Rule

        Under the currently effective newspaper-broadcast cross-ownership rule, unless grandfathered or subject to waiver, no party can have an attributable interest in both a daily newspaper (published at least 4 days a week, in the dominant language of the market, and with a circulation exceeding 5% of

16

the households in the designated market area) and either a television station or a radio station in the same market if specified signal contours of the television station or the radio station encompass the entire community in which the newspaper is published.

Attribution of Ownership

        Pursuant to FCC rules, the following relationships and interests are generally considered attributable for purposes of broadcast ownership restrictions: (i) all officers and directors of a corporate licensee and its direct or indirect parent(s); (ii) voting stock interests of at least five percent; (iii) voting stock interests of at least 20 percent, if the holder is a passive institutional investor (such as an investment company, bank, or insurance company); (iv) any equity interest in a limited partnership or limited liability company, unless properly "insulated" from management activities; (v) equity and/or debt interests that in the aggregate exceed 33 percent of a licensee's total assets, if the interest holder supplies more than 15 percent of the station's total weekly programming or is a same-market broadcast company or daily newspaper publisher; (vi) time brokerage of a broadcast station by a same-market broadcast company; and (vii) same-market radio and television joint sales agreements. Because we are controlled by a single stockholder holding a majority of the voting power of our capital stock, the FCC's current rules do not treat other five percent or greater voting stockholders as attributable, and those ownership interests are not required to be reported to the FCC. Pending before the FCC is a proposal to eliminate the single majority shareholder exception. The FCC is also considering a proposal to require the disclosure in biennial ownership reports of information about five percent or greater voting shareholders, even if such interests are not attributable under the FCC's ownership rules.

        Management services agreements and other types of shared services arrangements between same-market stations that do not include attributable time brokerage or joint sales components generally are not deemed attributable under the FCC's current ownership rules, but as indicated above, the FCC is considering a proposal to change this rule and will also scrutinize more closely transactions that involved shared services arrangements.

Commission Approval of Transfer of Control of FCC Licenses

        The FCC's prior approval is required for the transfer of control or assignment of FCC licenses. We are currently controlled by InterMedia Partners VII, L.P. and its affiliates ("InterMedia"), which owns approximately 84% of our Class B common Stock, par value $0.0001 per share ("Class B common stock"). The FCC's prior consent would be required prior to any transaction that would result in a change in control of Hemisphere or InterMedia. An application for consent to a transfer of control or assignment of licenses would be subject to a formal public notice and comment period during which petitions to deny the applications would be accepted by the FCC.

        A person or entity requesting the FCC's consent to acquire or obtain control of our television station licenses must demonstrate that the acquisition complies with the FCC's ownership rules or that a waiver of the rules is in the public interest. As discussed above, we own two television stations, WNJX-TV and WTIN-TV, which are operated as "satellite" stations of WAPA-TV. Stations granted satellite status are exempt from the FCC's local television ownership rule. Thus, this status permits the common ownership of the three WAPA broadcast stations that would not otherwise be permitted. WNJX-TV and WTIN-TV were first accorded satellite status in 2001 due to the unique circumstances of the Puerto Rico market, including its topography and economic conditions, and the FCC has renewed this grant in subsequent transactions. We anticipate the FCC would continue to grant satellite status to WNJX-TV and WTIN-TV in future change-in-control transactions.

17

Alien Ownership Restrictions

        Under the Communications Act, a broadcast license may not be granted to or held by any corporation that has more than 20% of its capital stock owned or voted by non-U.S. citizens or entities, whom the FCC refers to as "aliens," or their representatives, by foreign governments or their representatives, or by non-U.S. corporations.

        Furthermore, the Communications Act provides that no FCC broadcast license may be granted to or held by any corporation directly or indirectly controlled by any other corporation of which more than 25% of the capital stock is owned or voted by non-U.S. citizens or entities or their representatives, by foreign governments or their representatives, or by non-U.S. corporations, if the FCC finds the public interest will be served by the refusal or revocation of such license. These restrictions apply in modified form to other forms of business organizations, including partnerships and limited liability companies. The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before a broadcast license may be granted to or held by any such entity. In the past, the FCC has made such an affirmative finding with respect to broadcast licenses only in highly limited circumstances. In 2013, however, the FCC issued a declaratory ruling that notwithstanding its past practices, it will consider on a case-by-case basis requests for approval of acquisitions by aliens of in excess of 25% of the capital stock of the parent of a broadcast licensee. In 2015, the FCC initiated a rulemaking proceeding proposing to simplify the foreign ownership approval process for broadcast station licensees. In acting upon a request for declaratory ruling, the FCC will coordinate with Executive Branch agencies on national security, law enforcement, foreign policy and trade policy issues. The FCC could revoke the licenses for WAPA's television stations if more than 25% of our outstanding capital stock is issued to or for the benefit of non-U.S. citizens, unless the FCC has ruled in advance that such investments by foreigners are in the public interest.

        To the extent necessary to comply with the Communications Act and FCC rules and policies, our board of directors may (i) take any action it believes necessary to prohibit the ownership or voting of more than 25% of our outstanding capital stock by or for the account of aliens or their representatives or by a foreign government or representative thereof or by any entity organized under the laws of a foreign country (collectively, "Aliens"), or by any other entity (a) that is subject to or deemed to be subject to control by Aliens on a de jure or de facto basis or (b) owned by, or held for the benefit of Aliens in a manner that would cause us to be in violation of the Communications Act or FCC rules and policies; (ii) prohibit any transfer of our stock which we believe could cause more than 25% of our outstanding capital stock to be owned or voted by or for any person or entity identified in the foregoing clause (i); (iii) prohibit the ownership, voting or transfer of any portion of its outstanding capital stock to the extent the ownership, voting or transfer of such portion would cause us to violate or would otherwise result in violation of any provision of the Communications Act or FCC rules and policies; (iv) convert shares of our Class B common stock into shares of our Class A common stock to the extent necessary to bring us into compliance with the Communications Act or FCC rules and policies; and (v) redeem capital stock to the extent necessary to bring us into compliance with the Communications Act or FCC rules and policies or to prevent the loss or impairment of any of our FCC licenses.

Digital Television

        As of June 12, 2009, all full-power broadcast television stations were required to cease broadcasting analog programming and convert to all digital broadcasts. Digital broadcasting allows stations to offer digital channels for a wide variety of services such as high definition video programming, multiple channels of standard definition video programming, such as WAPA2 Deportes, data, and other types of communications. Each station is required to provide at least one free over-the-air video program signal.

18

        To the extent a station has "excess" digital capacity (i.e., digital capacity not used to transmit free, over-the-air video programming), it may elect to use that capacity in any manner consistent with FCC technical requirements, including for data transmission, interactive or subscription video services, or paging and information services. If a station uses its digital capacity to provide any such "ancillary or supplementary" services on a subscription or otherwise "feeable" basis, it must pay the FCC an annual fee equal to 5% of the gross revenues realized from such services.

MVPD Retransmission of Local Television Signals

        A number of provisions of the Communications Act and FCC rules govern aspects of the relationship between broadcast television stations and distributors of multiple channels of video programming such as cable, satellite and telecommunications companies (referred to as MVPDs). The rules generally provide certain protections for local broadcast stations, for which MPVDs are an important means of distribution and a provider of competing program channels.

        To ensure that every local television station can be received in its local market without requiring a cable subscriber to switch between cable and off-air signals, the FCC allows every full-power television broadcast station to require that all local cable systems and direct broadcast satellite transmit that station's primary digital channel to their subscribers within the station's market (the so-called "must-carry" rule). Alternatively, a station may elect to forego its must-carry rights and seek a negotiated agreement to establish the terms of its carriage by a local MVPD—referred to as "retransmission consent." A station electing retransmission consent assumes the risk that it will not be able to strike a deal with the MPVD and will not be carried. A station has the opportunity to elect must-carry or retransmission consent every three years. Elections were made in October 2014 for the 2015-2017 three year period. WAPA elected retransmission consent and has entered into retransmission consent contracts with all MVPD systems serving Puerto Rico.

        MVPDs are not required to carry any programming streams other than a station's primary video programming channel. Consequently, WAPA's multicast channel WAPA2 Deportes is not entitled to mandatory carriage under the FCC's must-carry rules. However, we are free to negotiate with MVPDs for the carriage of additional programming streams.

        In March 2011 and again in September 2015, the FCC issued a Notice of Proposed Rulemaking (each a, "NPRM") reviewing the retransmission consent rules. The NPRMs request comment on proposals to strengthen the good faith negotiation requirements and to require advance notice of the potential that a television station could be dropped from an MVPD's programming lineup. In 2014, the FCC adopted rules prohibiting a television broadcast station that is ranked among the top four stations to negotiate retransmission consent jointly with another station, if the stations are not commonly owned and serve the same geographic market. In December 2014, the FCC issued a separate NPRM requesting comment on whether the definition of MVPD should be expanded to include providers that make multiple linear streams of video programming available for purchase, regardless of the technology used to distribute the programming (e.g. entities providing video programming to subscribers through internet connections). Each of these proceedings is pending, and we cannot predict what impact, if any, they will have on our negotiations with video programming distributors.

Repurposing of Broadcast Spectrum for Other Uses

        Federal legislation was enacted in February 2012 that, among other things, authorizes the FCC to conduct voluntary "incentive auctions" in order to reallocate certain spectrum currently occupied by television broadcast stations to mobile wireless broadband services, to "repack" television stations into a smaller portion of the existing television spectrum band, and to require television stations that do not participate in the auction to modify their transmission facilities, subject to reimbursement for reasonable relocation costs up to an industry-wide total of $1.75 billion.

19

        The FCC has adopted rules concerning the incentive auction and the repacking of the television band and has commenced the auction process. Under the auction rules implemented by the FCC, television stations will be given an opportunity to offer spectrum for sale to the government in a "reverse" auction while wireless providers will bid to acquire spectrum from the government in a related "forward" auction. Applications from television stations to participate in the auction were due on January 12, 2016 and the auction will begin on March 29, 2016. We have filed an application to participate in the auction. We and our agents, employees, officers, directors and owners are subject to strict FCC prohibitions on directly or indirectly communicating—both internally and externally—information regarding our bidding strategy or the status of our bids in the auction. Accordingly, we will not be able to publicly communicate any updated information about our application other than as stated above. In particular, we will not be able to publicly communicate the preliminary results of our participation in the auction, which we may be apprised of as early as the second quarter of 2016, until the auction is completed, which may not be before the fourth quarter of 2016. These restrictions could have the effect of limiting our ability to access the equity or debt markets during that period, which could adversely impact our ability to raise additional capital or refinance our indebtedness, thereby adversely impacting our ability to reduce our cost of borrowing. If the FCC believes that there have been irregularities in our bidding, or receives a complaint to such effect, then it may launch an investigation and require us to demonstrate that we took adequate precautions to limit our public communications during the auction. Any violation of these prohibitions could result in significant penalties and reversal of our bids, any of which could have a material adverse effect on our business, financial condition and results of operations.

        Following completion of the incentive auction, the FCC will "repack" the remaining television broadcast spectrum, which may require certain television stations that did not participate in the reverse auction to modify their transmission facilities, including requiring such stations to operate on other channel designations. The FCC will reimburse stations for reasonable relocation costs up to a total across all stations of $1.75 billion. When repacking , the FCC will make reasonable efforts to preserve a station's coverage area and population served. In addition, the FCC is prohibited from requiring a station to move involuntarily from the UHF band, the band in which WAPA's broadcast licenses operate, to the VHF band or from the high VHF band to the low VHF band.

        The outcome of the incentive auction and repacking of broadcast television spectrum, or the impact of such items on WAPA's business, cannot be predicted.

EEO Rules

        The FCC's Equal Employment Opportunity ("EEO") rules impose job information dissemination, recruitment, documentation and reporting requirements on broadcast television stations. Broadcasters are also subject to random audits to ensure compliance with the FCC's EEO rules and may be sanctioned for noncompliance.

Recordkeeping

        The FCC rules require broadcast television stations to maintain various records regarding operations, including equipment performance records and a log of the station's operating parameters. Television stations must also maintain a public inspection file, portions of which are hosted on an FCC-maintained website. This file must contain various records, including the station license, FCC applications, contour maps, ownership reports, political broadcasting records, EEO public file reports, a copy of the manual "The Public and Broadcasting," correspondence from the public, material regarding FCC investigations or complaints, issues/programs lists, children's television programming reports, records concerning compliance with commercial limits in children's programming, time brokerage agreements and joint sales agreements, and statements of must-carry/retransmission elections.

20

Broadcast Localism

        In 2007, the FCC issued a Report on Broadcast Localism and Notice of Proposed Rulemaking (the "Localism Report"). The Localism Report tentatively concluded that broadcast stations should be required to have regular meetings with permanent local advisory boards to ascertain the needs and interests of their communities. The Localism Report also tentatively adopted specific renewal application processing guidelines that would require broadcasters to air a minimum amount of local programming. The Localism Report sought public comment on two additional rule changes that would impact television broadcasters. These rule changes would restrict a broadcaster's ability to locate a station's main studio outside the community of license and the right to operate a station remotely. To date, the FCC has not issued a decision adopting rules to implement any of the initiatives in the Localism Report, and it cannot be predicted whether or when the FCC might act to codify any such initiatives.

Programming and Operations

        Rules and policies of the FCC and other federal agencies regulate certain programming practices and other areas affecting the business or operations of broadcast stations, including WAPA, and cable networks, including WAPA America and Cinelatino.

        Obscenity, Indecency and Profanity.    Federal statutes prohibit the broadcast or transmission of obscene material at any time by broadcast television stations, including the WAPA stations or on cable networks, including WAPA America and Cinelatino. The FCC's rules also prohibit television stations, including the WAPA stations, from broadcasting indecent or profane material between the hours of 6:00 a.m. and 10:00 p.m. In recent years, the FCC has intensified its enforcement activities with respect to programming it considers indecent and has issued numerous fines to licensees found to have violated the indecency rules.

        In July 2007, the FCC implemented increased forfeiture amounts for indecency violations that were enacted by Congress. The maximum permitted fine for an indecency violation is $325,000 per incident and $3,000,000 for any continuing violation arising from a single act or failure to act.

        Because the FCC may investigate indecency complaints on an ex parte basis, a licensee may not have knowledge of an indecency complaint unless and until the complaint results in the issuance of a formal FCC letter of inquiry or notice of apparent liability for forfeiture. In July 2010, the U.S. Court of Appeals for the Second Circuit issued a decision finding that the FCC's indecency standard was too vague for broadcasters to interpret and therefore inconsistent with the First Amendment. In June 2011, the Supreme Court granted certiorari in this case. In June 2012, the Supreme Court issued a decision which held that the FCC could not fine ABC and FOX (two television networks that were fined for airing allegedly indecent material) for the specific broadcasts at issue because the FCC had not provided them with sufficient notice of its intent to issue fines for the use of fleeting expletives or momentary nudity. However, the Supreme Court did not make any substantive ruling regarding the FCC's current indecency policies. In April 2013, the FCC requested comments on its indecency policy, including whether to ban the use of fleeting expletives or whether it should only impose fines from broadcasts that involve repeated and deliberate use of expletives. The FCC has not issued any decisions regarding indecency enforcement since the Supreme Court's decision was issued, although it has advised that it will continue to pursue enforcement actions in egregious cases while it conducts its review of its indecency policy generally.

        Children's Programming.    Federal statutes and FCC rules require broadcast television stations, including the WAPA stations, to broadcast three hours per week of educational and informational programming ("E/I programming") designed for children 16 years of age and younger. FCC rules also require television stations to air E/I programming on each additional digital multicast program stream

21

broadcast, with the requirement increasing in proportion to the additional hours of free programming offered on multicast channels.

        Federal statutes and FCC rules also limit the amount and content of commercial matter that may be included in programming primarily produced and carried for children 12 years and younger by broadcast television stations and cable networks, including WAPA America and Cinelatino. The FCC's rules also limit the display, during children's programming on broadcast stations and cable networks, of Internet addresses of websites that contain or link to commercial material or that use program characters to sell products. In October 2009, the FCC issued a Notice of Inquiry ("Children's NOI") seeking comment on a broad range of issues related to children's usage of electronic media and the current regulatory landscape that governs the availability of electronic media to children. The Children's NOI remains pending, and it cannot be predicted what recommendations or further action, if any, will result from it.

        Some U.S. policymakers have sought limitations on food and beverage marketing in media popular with children and teens. In April 2011, the Interagency Working Group on Food Marketed to Children, which is comprised of the Federal Trade Commission, the Centers for Disease Control and Prevention, the Food and Drug Administration and the U.S. Department of Agriculture, jointly requested comment on proposed nutritional restrictions for food and beverage marketing directed to children and teens aged 17 years and under. Although the proposed guidelines are nominally voluntary, if these or other similar guidelines are implemented by food and beverage marketers, they could have a negative impact on our Networks advertising revenues.

        Commercial Loudness.    The 2010 Commercial Advertisement Loudness Mitigation Act ("CALM Act") and the FCC rules implementing the CALM Act, require television stations, cable television operators, satellite television providers, and other pay television providers to limit the average volume of commercials, including promotional announcements, to the same average volume as the programming it accompanies. The FCC rules do not specifically require video programming providers, such as WAPA America or Cinelatino, to comply with the rules regarding the loudness of commercials. However, video programming distributors may request or require by contract that programming providers certify compliance with those rules for commercials embedded in programming.

        Closed Captioning.    FCC rules require the majority of programming broadcast by television stations and carried on cable networks to contain closed captions. In January 2012, the FCC adopted rules to require that television programming broadcast by television stations, including the WAPA stations, or transmitted by cable, including on WAPA America or Cinelatino, with captioning include captioning if subsequently made available online, for example, by streaming on WAPA.TV. Clips of programming carried on television are required to be captioned if subsequently distributed over the internet. Additionally, beginning in March 2015, new FCC rules became effective that require programming captions to adhere to more stringent quality standards.

        Sponsorship Identification.    Both the Communications Act and the FCC's rules generally require that, when payment or other consideration has been received or promised to a broadcast television station for the airing of program material, the station must disclose that fact and identify who paid or promised to provide the consideration at the time of broadcast. Cable systems are subject to the same requirement when the system is originating programming, also known as cablecasting. In June 2008 the FCC sought comments on whether it should adopt additional regulations with respect to sponsorship identification requirements on cable programmers. That proceeding remains pending.

Program Access Restrictions

        Under the Communications Act, vertically integrated cable programmers are generally prohibited from offering different prices, terms, or conditions to competing multichannel video programming

22

distributors unless the differential is justified by certain permissible factors set forth in the FCC's regulations. The FCC's "program access" rules previously limited the ability of a vertically integrated cable programmer to enter into exclusive distribution arrangements with cable television operators. However, in 2012, the FCC declined to extend the exclusive contract prohibition section of the program access rules beyond its October 5, 2012 sunset date. A cable programmer is considered to be vertically integrated if it owns or is owned by a cable television operator, in whole or in part, under the FCC's program access attribution rules. Cable television operators for this purpose may include telephone companies that provide video programming directly to subscribers. Any holdings of cable television operators by our shareholders, officers, and directors may be attributable to us, and therefore could have the effect of making WAPA America and Cinelatino subject to the program access rules, which could adversely affect the flexibility to negotiate the most favorable terms available for their content.

Regulation of the Internet

        Internet services, including WAPA.TV, CINELATINO.COM, TVPASIONES.COM, CENTROAMERICATV.TV, and TELEVISIONDOMINICANA.TV, are subject to regulation in the U.S. relating to the privacy and security of personally identifiable user information and acquisition of personal information from children under 13, including the federal Child Online Privacy Protection Act (COPPA) and the federal Controlling the Assault of Non-Solicited Pornography and Marketing Act (CAN-SPAM). In addition, a majority of states have enacted laws that impose data security and security breach obligations. Additional federal, state, territorial laws and regulations may be adopted with respect to the Internet or other online services, covering such issues as user privacy, child safety, data security, advertising, pricing, content, copyrights and trademarks, access by persons with disabilities, distribution, taxation and characteristics and quality of products and services.

Other Regulations

        In addition to the regulations applicable to the broadcast, cable television and Internet industries in general, we are also subject to other federal, state, territorial, and local regulations, including, without limitation, regulations promulgated by federal, state, and territorial environmental, health and labor agencies. Cinelatino is also subject to laws and regulations that may be adopted or promulgated by the governments of other jurisdictions in which it operates.

AVAILABLE INFORMATION

        Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") are made available free of charge on or through our website at www.hemispheretv.com as soon as reasonably practicable after such reports are filed with, or furnished to, the Securities and Exchange Commission (the "SEC" or the "Commission"). The information on our website is not, and shall not be deemed to be, part of this report or incorporated into any other filings we make with the Commission.

        You may read and copy any materials we file with the Commission at the Commission's Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330. The SEC also maintains a website that contains our reports, proxy statements and other information at www.sec.gov. In addition, copies of our Corporate Governance Guidelines, Audit Committee Charter, Code of Business Conduct and Ethics, are available at our website at www.hemispheretv.com under "Investor Relations—Corporate Governance." Copies will also be provided to any Hemisphere stockholder upon written request to Investor Relations, Hemisphere Media Group, Inc. at 2000 Ponce de Leon Blvd., Suite 500, Coral Gables, FL, 33134, or via electronic mail at ir@hemispheretv.com, or by contacting Investor Relations by telephone at (212) 687-8080.

23

Item 1A.    Risk Factors.

        The following risk factors and the forward-looking statements elsewhere herein should be read carefully in connection with evaluating our Business and our subsidiaries. These risks and uncertainties could cause actual results and events to differ materially from those anticipated. Many of the risk factors described under one heading below may apply to more than one section in which we have grouped them for the purpose of this presentation. As a result, you should consider all of the following factors, together with all of the other information presented herein, in evaluating our Business and our subsidiaries. These risk factors may be amended, supplemented or superseded from time to time in future filings and reports that we file with the Commission in the future.

Risk Factors Related to our Business

Service providers could discontinue or refrain from carrying our Networks, decide not to renew their distribution agreements or renew on less favorable terms, which could substantially reduce the number of viewers and harm our Business and operating results.

        Consolidation among cable and satellite operators has given the largest operators considerable leverage in their relationships with programmers, including our Networks. Some of our largest Distributors are combining and have gained, or may gain, market power, which could affect our ability to maximize the value of our content through those platforms. In addition, many of the countries and territories in which we distribute our Networks also have a small number of dominant Distributors. The success of each of our Networks is dependent, in part, on our ability to enter into new carriage agreements and maintain or renew existing agreements or arrangements with Distributors. Although our Networks currently have arrangements or agreements with, and are being carried by, many of the largest Distributors, having such a relationship or agreement with a Distributor does not always ensure that the Distributors will continue to carry our Networks. Additionally, under our Cable Networks' current contracts and arrangements, we typically offer Distributors the right to transmit the programming services comprising our Cable Networks to their subscribers, but not all such contracts or arrangements require that the programming services comprising our Cable Networks be offered to all subscribers of, or any specific tiers of, or to a specific minimum number of subscribers of a Distributor. Also, WAPA is dependent on its retransmission consent agreements that provide for per subscriber fees with annual rate escalators. No assurances can be provided that WAPA will be able to renegotiate all such agreements on favorable terms, on a timely basis, or at all. A failure to secure a renewal of our Networks' agreements, or a renewal on less favorable terms may result in a reduction in our Business's retransmission fees, subscriber fees and advertising revenues, and may have a material adverse effect on our results of operations and financial position.

The success of our Business is dependent upon advertising revenue, which is seasonal and cyclical, and will also fluctuate as a result of a number of other factors, some of which are beyond our control.

        The success of our Business is dependent upon our advertising revenues. Our Networks' ability to sell advertising time and space depends on, among other things:

•

economic conditions in the markets in which our Networks operate;

•

the popularity of the programming offered by our Networks;

•

changes in the population demographics in the markets in which our Networks operate;

•

advertising price fluctuations, which can be affected by the popularity of programming, the availability of programming, and the relative supply of and demand for commercial advertising;

•

our competitors' activities, including increased competition from other advertising-based mediums, particularly MVPD operators, and the internet;

24

•

decisions by advertisers to withdraw or delay planned advertising expenditures for any reason;

•

labor disputes or other disruptions at major advertisers;

•

changes in audience ratings; and

•

other factors beyond our control.

        Audience ratings may be impacted by a number of factors outside of our control, including a decline in viewership, changes in ratings technology or methodology or changes in household sampling. Any decline in audience ratings could cause revenue to decline, adversely impacting our Business and our operating results. Our advertising revenue and results are also subject to seasonal and cyclical fluctuations that we expect to continue. Seasonal fluctuations typically result in higher operating income in the fourth quarter than in the first, second, and third quarters of each year. This seasonality is primarily attributable to advertisers' increased expenditures in anticipation of the holiday season spending. In addition, we typically experience an increase in revenue every four years as a result of advertising sales in respect of local government elections in Puerto Rico. The next political year will be 2016. As a result of the seasonality and cyclicality of our revenue, and the historically significant increase in our revenue during election years, investors are cautioned that it has been, and is expected to remain, difficult to engage in period-over-period comparisons of our revenue and results of operations.

If our Networks' viewership declines for any reason, or our audience ratings decline for any reason or our Networks fail to develop and distribute popular programs, our advertising and subscriber fee revenues could decrease.

        Our Networks' viewership and audience ratings, as applicable, are critical factors affecting both (i) the advertising revenue that we receive, and (ii) the extent of retransmission, and subscriber fees we receive, as applicable, under agreements with our Distributors. Our ratings are dependent, in part, on our ability to consistently create and acquire programming that meets the changing preferences of viewers in general and viewers in our Networks' target demographic category.

        Our Networks viewership is also affected by the quality and acceptance of competing programs and other content offered by other networks, the availability of alternative forms of entertainment and leisure time activities, including general economic conditions, piracy, digital and on-demand distribution and growing competition for consumer discretionary spending. Audience ratings may be impacted by a number of factors outside of our control, including a decline in viewership, changes in ratings technology or methodology or changes in household sampling. Any decline in our Networks' viewership or audience ratings could cause advertising revenue to decline, subscription revenues to fall, and adversely impact our Business and operating results.

Our Networks may not be able to grow their subscribers and/or subscriber/retransmission fees, or such subscribers and/or fees may decline and, as a result, our revenues and profitability may not increase and could decrease.

        The growth of our Networks' subscriber base depends upon many factors, such as overall growth in cable, satellite and telco subscribers, the popularity of our Networks' programming, our ability to negotiate new carriage agreements, or amendments to, or renewals of, current carriage agreements, maintenance of existing distribution, and the success of our marketing efforts in driving consumer demand for their content, as well as other factors that are beyond our control.

        A major component of our financial growth strategy is based on our ability to increase our Cable Networks' subscriber base. If our Cable Networks' programming services are required by the FCC to be offered on an "à la carte" basis, our Cable Networks could experience higher costs, reduced distribution of our program service, perhaps significantly, and lose viewers. There can be no assurance

25

that we will be able to maintain or increase our Cable Networks' subscriber base on cable, satellite and telco systems or that our current carriage will not decrease as a result of a number of factors or that we will be able to maintain or increase our Cable Networks' current subscriber fee rates.

        In particular, negotiations for new carriage agreements, or amendments to, or renewals of, current carriage agreements, are lengthy and complex, and our Networks are not able to predict with any accuracy when such increases in our subscriber bases may occur, if at all, or if we can maintain or increase our current subscriber fee or retransmission fee rates, as applicable. If our Networks are unable to grow our subscriber bases or if we reduce our subscriber fee or retransmission fee rates, as applicable, our revenues may not increase and could decrease.

Demand for our programming and our Business, financial condition and results of operations are affected by changes that impact Hispanic living in the United States.

        We believe one of our growth drivers will result from projected increases in the U.S. Hispanic population and projected increases in their buying power. Factors that impact the U.S. Hispanic population, including a slow-down in immigration into the U.S. in the future, the impact of federal and state immigration legislation and policies on both the U.S. Hispanic population and persons emigrating from Latin America could affect the growth of the U.S. Hispanic population and, as a result, the demand for our programming. If the U.S. Hispanic population grows more slowly than anticipated, the projected buying power of the U.S. Hispanic population may not grow as anticipated. In addition, economic conditions, such as unemployment, that disproportionately impact the U.S. Hispanic population could slow the growth of, or reduce, the projected buying power of U.S. Hispanics. If the U.S. Hispanic population or its buying power grows more slowly than anticipated, it could have a material adverse effect on our business, financial condition and results of operations.

        In addition, in the U.S. we exclusively target our Hispanic audience through Spanish-language programming. As U.S. Hispanics become bilingual or English-dominant, demand for our Spanish-language programming could be adversely impacted by competing English-language programming, including programming primarily in English-language targeting the bilingual or English-dominant U.S. Hispanic population. In addition, a shift in policy towards encouraging English-language fluency among U.S. Hispanic immigrants could also impact demand for Spanish-language programming. If we are unable to create more programming and networks targeted to this audience, we may lose audience share to competing English-language or bilingual programming which could lead to lower ratings and consequently, lower advertising revenues, which could have a material adverse effect on our business, financial condition and results of operations.

The television markets in which our Networks operate is highly competitive, and we may not be able to compete effectively, particularly against competitors with greater financial resources, brand recognition, marketplace presence and relationships with service providers.

        Our Networks compete with other television channels for the distribution of their programming, development and acquisition of content, audience viewership and advertising sales. With respect to audiences, television stations compete primarily based on program popularity. We cannot provide any assurances as to the acceptability by audiences of any of the programs our Networks broadcast. Further, because our Networks compete for the rights to produce or license certain programming, we cannot provide any assurances that we will be able to produce or obtain any desired programming at costs that we believe are reasonable. Our inability or failure to broadcast popular programs on our Networks, or otherwise maintain viewership for any reason, including as a result of significant increases in programming alternatives and the failure to compete with new technological innovations could result in a lack of advertisers, or a reduction in the amount advertisers are willing to pay us to advertise, which could have a material adverse effect on our Business, financial condition, and results of operations.

26

        Our Networks compete with other Spanish-language broadcast and cable television networks, and digital media companies for the acquisition of programming, viewership, the sale of advertising, and creative talent. Our Networks also compete for the development and acquisition of programming, selling of commercial time on our Networks and on-air and creative talent. It is possible that our competitors, many of which have substantially greater financial and operational resources than our Networks, could revise their programming to offer more competitive programming which is of interest to our Networks' viewers.

        Additionally, our Cable Networks compete with other television channels to be included in the offerings of each video service provider and for placement in the packaged offerings having the most subscribers. For example, our Cable Networks' ability to secure distribution is dependent upon the production, acquisition and packaging of programming, audience viewership, and the prices charged for carriage. Our Cable Networks' contractual agreements with Distributors are renewed or renegotiated from time to time in the ordinary course of business. With respect to WAPA, cable network programming, combined with increased access to cable and satellite TV, has become a significant competitor for broadcast television programming viewers.

        Our Networks also compete for advertising revenue with general-interest television and other forms of media, including magazines, newspapers, radio and digital media. Our ability to secure additional advertising accounts relating to our Networks' operations depends upon the size of each Networks' audience, the popularity of our programming and the demographics of our viewers, as well as strategies taken by our Networks' competitors, strategies taken by advertisers and the relative bargaining power of advertisers. Competition for advertising accounts and related advertising expenditures is intense. We face competition for such advertising expenditures from a variety of sources, including other networks and other media. We cannot provide assurance that our Networks' advertising sponsors will pay advertising rates for commercial air time at levels sufficient for us to make a profit, that we will maintain relationships with our current advertising sponsors or that we will be able to attract new advertising sponsors or increase advertising revenues. Changes in ratings technology, or methodology or metrics used by advertisers or other changes in advertisers' media buying strategies also could have a material adverse effect on our financial condition and results of operations. If we are unable to attract advertising accounts in sufficient quantities, our revenues and profitability may be harmed.

        Certain technological advances, including the increased deployment of fiber optic cable, are expected to allow cable and telecommunication video service providers to continue to expand both their channel and broadband distribution capacities and to increase transmission speeds. In addition, the ability to deliver content via new methods and devices is expected to increase substantially. The impact of such added capacities is hard to predict, but the development of new methods of content distribution could dilute our Networks' market share and lead to increased competition for viewers by facilitating the emergence of additional channels and mobile and internet platforms through which viewers could view programming that is similar to that offered by our Networks.

        If any of our existing competitors or new competitors, many of which have substantially greater financial and operational resources than our Networks, significantly expand their operations or their market penetration, our Business could be harmed. If any of these competitors were able to invent improved technology, or our Networks were not able to prevent them from obtaining and using their own proprietary technology and trade secrets, our Business and operating results, as well as our Networks' future growth prospects, could be negatively affected. There can be no assurance that our Networks will be able to compete successfully in the future against existing or new competitors, or that increasing competition will not have a material adverse effect on our Business, financial condition or results of operations.

27

Interpretation of certain terms of our distribution agreements may have an adverse effect on the distribution payments we receive under those agreements.

        Many of our distribution agreements contain "most favored nation" clauses. These clauses typically provide that if we enter into an agreement with another Distributor which contains certain more favorable terms, we must offer some of those terms to our existing Distributors. While we believe that we have appropriately complied with the most favored nation clauses included in our distribution agreements, these agreements are complex and other parties could reach a different conclusion that, if correct, could have a material adverse effect on our results of operations and financial position.

Our results may be adversely affected if long-term programming contracts are not renewed on sufficiently favorable terms.

        Our Networks enter into long-term contracts for acquisition of programming, including movies, television series, sporting rights and other programs. As these contracts expire, our Networks must renew or renegotiate these contracts, and if our Networks are unable to renew them on acceptable terms, we may lose programming rights. Even if these contracts are renewed, the cost of obtaining programming rights may increase (or increase at faster rates than our historical experience) or the revenue from distribution of programs may be reduced (or increase at slower rates than our historical experience). With respect to the acquisition of programming rights, the impact of these long-term contracts on our results over the term of the contracts depends on a number of factors, including effectiveness of marketing efforts, the size of audiences and the strength of advertising markets. There can be no assurance that revenues from programming based on these rights will exceed the cost of the rights plus the other costs of distributing the programming.

There has been a shift in consumer behavior as a result of technological innovations and changes in the distribution of content, which may affect our viewership and the profitability of our Business in unpredictable ways. Our Networks' failure to acquire or maintain state-of-the-art technology or adapt our business models may harm our Business and competitive advantage.

        Technology in the video, telecommunications and data services industry is changing rapidly. Consumer behavior related to changes in content distribution and technological innovation affect our economic model and viewership in ways that are not entirely predictable. Consumers are increasingly viewing content on a time-delayed or on-demand basis from traditional distributors and from connected apps and websites and on a wide variety of screens, such as televisions, tablets, mobile phones and other devices. Additionally, devices that allow users to view television programs on a time-shifted basis and technologies that enable users to fast-forward or skip programming, including commercials, such as DVRs and portable digital devices and systems that enable users to store or make portable copies of content may affect the attractiveness of our offerings to advertisers and could therefore adversely affect our revenues. There is increased demand for short-form, user-generated and interactive content, which have different economic models than our traditional content offerings. Digital downloads, rights lockers, rentals and subscription services are competing for consumer preferences with each other and with traditional physical distribution of our content. Each distribution model has different risks and economic consequences for us, so the rapid evolution of consumer preferences may have an economic impact that is not completely predictable. Distribution windows are also evolving, potentially affecting revenues from other windows. We may be required to incur substantial capital expenditures to implement new technologies, or, if we fail to do so, may face significant new challenges due to technological advances adopted by competitors, which in turn could result in harm to our Business and operating results. Additionally, the development of new methods of content distribution could dilute our Networks' market share and lead to increased competition for viewers. If we cannot ensure that our distribution methods and content are responsive to our target audiences, our Business could be adversely affected.

28

        Certain digital video recording technologies offered by cable and satellite systems allow viewers to digitally record, store and play back television programming at a later time and may impact our advertising revenue. Most of these technologies permit viewers to fast forward through advertisements; or, in certain cases, skip them entirely. The use of these technologies may decrease viewership of commercials as recorded by media measurement services such as Nielsen Media Research and, as a result, lower the advertising revenues of our television stations. The current ratings provided by Nielsen for use by broadcast stations are limited to live viewing plus viewing of a digitally recorded program on the same day as the original air date and give broadcasters no credit for delayed viewing that occurs after the original air date. The effects of new ratings system technologies including people meters and set-top boxes, and the ability of such technologies to be a reliable standard that can be used by advertisers is currently unknown.

We face cybersecurity and similar risks, which could result in the disclosure of confidential information, disruption of our programming services, damage to our brands and reputation, legal exposure and financial losses.

        Our information technology systems, including our online, mobile and app offering, as well as our internal systems, are susceptible to security breaches, operational data loss, general disruptions in functionality, and may not be compatible with new technology. We depend on our information technology systems for the effectiveness of our operations and to interface with our Networks' customers, as well as to maintain financial records and accuracy. Although we have systems in place to monitor our security measures, disruption or failures of our and our subsidiaries' information technology systems, due to employee error, computer malware, viruses, hacking and phishing attacks, or otherwise, could impair our ability to effectively and timely provide services and products and maintain our financial records. Additionally, outside parties may attempt to fraudulently induce employees or users to disclose sensitive or confidential information in order to gain access to data. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any such breach or unauthorized access could result in a loss of our proprietary information, which may include user data, a disruption of our services or a reduction of the revenues we are able to generate from such services, damage to our brands and reputation, a loss of confidence in the security of our offerings and services, and significant legal and financial exposure, each of which could potentially have a material adverse effect on our Business.

We are subject to restrictions on foreign ownership.

        Under the Communications Act, a broadcast license may not be granted to or held by any corporation that has more than 20% of its capital stock owned or voted by non-U.S. citizens or entities or their representatives, by foreign governments or their representatives, or by non-U.S. corporations.

        Furthermore, the Communications Act provides that no FCC broadcast license may be granted to or held by any corporation that is directly or indirectly controlled by any other corporation of which more than 25% of the capital stock is owned or voted by non-U.S. citizens or entities or their representatives, by foreign governments or their representatives, or by non-U.S. corporations, if the FCC finds the public interest will be served by the refusal or revocation of such license. These restrictions apply in modified form to other forms of business organizations, including partnerships and limited liability companies. The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before a broadcast license may be granted to or held by any such entity. Thus, the licenses for WAPA's television stations could be revoked if more than 25% of our outstanding capital stock is issued to or for the benefit of non-U.S. citizens, unless the FCC has ruled in advance that such ownership would be in the public interest.

29

        To the extent necessary to comply with the Communications Act and FCC rules and policies, our board of directors may (i) take any action it believes necessary to prohibit the ownership or voting of more than 25% of our outstanding capital stock by or for the account of Aliens or by any other entity (a) that is subject to or deemed to be subject to control by Aliens on a de jure or de facto basis or (b) owned by, or held for the benefit of Aliens in a manner that would cause us to be in violation of the Communications Act or FCC rules and policies; (ii) prohibit any transfer of our capital stock which we believe could cause more than 25% of our outstanding capital stock to be owned or voted by or for any person or entity identified in the foregoing clause (i); (iii) prohibit the ownership, voting or transfer of any portion of its outstanding capital stock to the extent the ownership, voting or transfer of such portion would cause us to violate or would otherwise result in violation of any provision of the Communications Act or FCC rules and policies; (iv) convert shares of our Class B common stock into shares of our Class A common stock to the extent necessary to bring us into compliance with the Communications Act or FCC rules and policies; and (v) redeem capital stock to the extent necessary to bring us into compliance with the Communications Act or FCC rules and policies or to prevent the loss or impairment of any of our FCC licenses.

Federal regulation of the broadcasting industry limits WAPA's operating flexibility.

        The ownership, operation and sale of broadcast television stations, such as WAPA, are subject to the jurisdiction of the FCC under the Communications Act. Matters subject to FCC oversight include the assignment of frequency bands for broadcast television; the approval of a television station's frequency, location and operating power; the issuance, renewal, revocation or modification of a television station's FCC license; the approval of changes in the ownership or control of a television station's licensee; the regulation of equipment used by television stations; and the adoption and implementation of regulations and policies concerning the ownership, operation, programming and employment practices of television stations.

        WAPA depends upon maintaining its broadcast licenses, which are issued by the FCC for a term of eight years and are renewable. Applications to renew the broadcast licenses of all television stations licensed to communities in Puerto Rico, including those associated with WAPA-TV, were renewed in 2013. In the future, interested parties may challenge a renewal application. The FCC has the authority to revoke licenses, not renew them, or renew them with conditions, including renewals for less than a full term. It cannot be assured that our license renewal applications for WAPA in the future will be approved, or that the renewals, if granted, will not include conditions or qualifications that could adversely affect our operations. If WAPA's licenses are not renewed in the future, or renewed with substantial conditions or modifications (including renewing one or more of our licenses for a term of fewer than eight years), it could prevent us from operating WAPA and generating revenue from it.

        Furthermore, WAPA's ability to successfully negotiate and renegotiate future retransmission consent agreements may be hindered by potential legislative or regulatory changes to the framework under which these agreements are negotiated. In March 2011, the FCC issued a Notice of Proposed Rulemaking to consider changes to its rules governing the negotiation of retransmission consent agreements. The FCC concluded that it lacked statutory authority to impose mandatory arbitration or interim carriage obligations in the event of a dispute between broadcasters and pay television operators. The FCC, however, sought comment on whether it should (1) strengthen existing regulatory provisions requiring broadcasters and MVPDs to negotiate retransmission consent in "good faith," (2) enhance notice obligations to consumers of potential disruptions in service, and/or (3) extend the prohibition on ceasing carriage of a broadcast station's signal during an audience measurement period to Direct broadcast satellite ("DBS") systems. In September 2015, the FCC issued a Notice of Proposed Rulemaking to consider whether the test to determine if a broadcaster and MVPD are negotiating retransmission consent agreements in good faith needs to be modified. The FCC has not yet issued a

30

decision in these proceedings, and we cannot predict the outcome of any FCC regulatory action in this regard.

Our Networks are subject to FCC sanctions or penalties if they violate the FCC's rules or regulations.

        If we or any of our officers, directors, or attributable interest holders materially violate the FCC's rules and regulations or are convicted of a felony or are found to have engaged in unlawful anticompetitive conduct or fraud upon another government agency, the FCC may, in response to a petition by a third party or on its own initiative, in its discretion, commence a proceeding to impose sanctions upon us that could involve the imposition of monetary penalties, the denial of a license renewal application, revocation of a broadcast license or other sanctions. In addition, the FCC has recently emphasized more vigorous enforcement of certain of its regulations, including indecency standards, sponsorship identification requirements, children's programming requirements, public file requirements, which impact broadcasters, and also rules that relate to the emergency alert system and closed captioning, and equal employment opportunity outreach and recordkeeping requirements, which impact MVPDs. For example, in 2006, the statutory maximum fine for broadcasting indecent material increased from $32,500 to $325,000 per incident. In 2014, the FCC issued fines against three cable network owners, with the fines ranging from $280,000 to $1,120,000, for violating FCC rules relating to the emergency alert system. These enhanced enforcement efforts could result in increased costs associated with the adoption and implementation of stricter compliance procedures at our Business facilities or FCC fines. Additionally, the effect of recent judicial decisions regarding the FCC's indecency enforcement practices remain unclear and we are unable to predict the impact of these decisions on the FCC's enforcement practices, which could have a material adverse effect on our Business.

The cable, satellite and telco-delivered television industry is subject to substantial governmental regulation for which compliance may increase our Networks' costs, hinder our growth and possibly expose us to penalties for failure to comply.

        The multichannel video programming distribution industry is subject to extensive legislation and regulation at the federal level, and many aspects of such regulation are currently the subject of judicial proceedings and administrative or legislative proposals. Operating in a regulated industry increases our cost of doing business as video programmers, and such regulation may also hinder our ability to increase and/or maintain our revenues. The regulation of programming services is subject to the political process and continues to be under evaluation and subject to change. Material changes in the law and regulatory requirements are difficult to anticipate and our Business may be harmed by future legislation, new regulation, deregulation and/or court decisions interpreting such laws and regulations.

        The following are examples of the types of currently active legislative, regulatory and judicial inquiries and proceedings that may impact our Cable Networks. The FCC may adopt rules which would require cable and satellite providers to make available programming channels on an a la carte basis. A major component of our financial growth strategy is based on our ability to increase our Cable Networks' subscriber base. If our Cable Networks' programming services are required by the FCC to be offered on an "a la carte" basis, our Cable Networks could experience higher costs, reduced distribution of our program service, perhaps significantly, and lose viewers. There can be no assurance that we will be able to maintain or increase our Cable Networks' subscriber base on cable, satellite and telco systems or that our current carriage will not decrease as a result of a number of factors or that we will be able to maintain or increase our Cable Networks' current subscriber fee rates.

        Further, the FCC and certain courts are examining the types of technologies that will be considered "multichannel video programming systems" under federal regulation and the rules that will be applied to distribution of television programming via such technologies. We cannot predict the outcome of any of these inquiries or proceedings or how their outcome would impact our ability to

31

have our Cable Networks' content carried on multichannel programming distribution and the value of our advertising inventories.

Our Cable Networks may become subject to Program Access restrictions.

        Under the Communications Act, vertically integrated cable programmers are generally prohibited from offering different prices, terms, or conditions to competing multichannel video programming distributors unless the differential is justified by certain permissible factors set forth in the FCC's regulations. A cable programmer is considered to be vertically integrated if it owns or is owned by a cable television operator in whole or in part under the FCC's program access attribution rules. Cable television operators for this purpose may include telephone companies that provide video programming directly to subscribers. The other holdings of entities that acquire an interest in our capital stock may be attributable to our Cable Networks for purposes of the program access rules, and therefore could have the effect of making our Cable Networks subject to the program access rules. If our Cable Networks were to become subject to the program access rules, their flexibility to negotiate the most favorable terms available for their content could be adversely affected. Our amended and restated certificate of incorporation provides for our ability to restrict ownership or redeem shares of certain holders, if we believe that the ownership or proposed ownership of shares of our capital stock by any person may limit or impair any of our activities under the Communications Act. However, there can be no assurances that our rights under our amended and restated certificate of incorporation, will allow a timely resolution to the limitation or impairment of our activities under the Communications Act. As a result, if our Cable Networks were to become subject to the program access rules, it could have a material adverse effect on our Business, financial condition and results of operations.

Cable, satellite and telco television programming signals have been stolen or could be stolen in the future, which reduces our potential revenue from subscriber fees and advertising.

        The delivery of subscription programming requires the use of conditional access technology to limit access to programming to only those who subscribe to programming and are authorized to view it. Conditional access systems use, among other things, encryption technology to protect the transmitted signal from unauthorized access. It is illegal to create, sell or otherwise distribute software or devices to circumvent conditional access technologies. However, theft of programming has been widely reported, and the access or "smart" cards used in service providers' conditional access systems have been compromised and could be further compromised in the future. When conditional access systems are compromised, our Networks do not receive the potential subscriber fee revenues from the service providers. Further, measures that could be taken by service providers to limit such theft are not under our control. While we take proactive steps to combat piracy through the encryption of our signal and other measures, there can be no assurances that these or other steps are effective. Piracy of our Networks' copyrighted materials could reduce our revenue and negatively affect our Business and operating results.

"Must-carry" regulations reduce the amount of channel space that is available for carriage of the Cable Networks cable offerings.

        The Cable Act of 1992 imposed "must carry" or "retransmission consent" regulations on cable systems, requiring them to carry the signals of local broadcast television stations that choose to exercise their must carry rights rather than negotiate a retransmission consent arrangement. DBS systems are also subject to their own must carry rules. The FCC's implementation of these "must-carry" obligations requires cable and DBS operators to give certain broadcasters preferential access to channel space. This reduces the amount of channel space that is available for carriage of our Cable Networks offerings by cable television systems and DBS operators in the U.S. Congress, the FCC or any other foreign

32

government may, in the future, adopt new laws, regulations and policies regarding a wide variety of matters which could affect our Cable Networks.

We have operations, properties and viewers that are located in Puerto Rico and Florida and could be adversely affected in the event of a hurricane or other extreme weather conditions.

        WAPA's corporate office and production facilities are located in Puerto Rico, where major hurricanes have occurred, as well as other extreme weather conditions, such as tornadoes, floods, fires, unusually heavy or prolonged rain, droughts and heat waves. Additionally, our corporate office and certain of our operations provided by our service providers are located in Miami, Florida, where similar weather conditions have occurred, including major hurricanes. Depending on where any particular hurricane or other weather event makes landfall, our properties or those of our service providers could experience significant damage. Such event could have an adverse effect on our ability to broadcast our programming or produce new shows, which could have an adverse effect on our Business and results of operations. Additionally, many of WAPA's regular viewers may be left without power and unable to view our programming which could have an adverse effect on our Business and results of operations.

Puerto Rico's continuing economic hardships may have a negative effect on the overall performance of our Business, financial condition and results of operations.

        Financial and economic conditions in Puerto Rico have further deteriorated and continue to be uncertain. The continuation or worsening of such conditions could have an adverse effect on our Business, results of operations, and/or financial condition.

        Puerto Rico's track record of poor budget controls and high poverty levels compared to the U.S. average presents ongoing challenges. Puerto Rico's government is facing a poor fiscal condition, high unemployment rate and extremely low labor force participation. Indeed, increasing economic problems in Puerto Rico have led to high-levels of migration from the territory. In 2014, 84,000 thousand people left Puerto Rico for the U.S. mainland, compared to 61,000 in 2010. This movement of people from Puerto Rico to the U.S. mainland resulted in a net migration loss (after accounting for migration to Puerto Rico) of 64,000 persons in 2014, up from the net migration loss of 26,000 in 2010. The continued loss of school-age children and those in their prime working years has contributed to Puerto Rico's lowered growth prospects going forward.

        Serious fiscal challenges have recently surfaced that are closely interrelated with Puerto Rico's weak economic performance. Puerto Rico has implemented measures intended to address its budgetary gaps and economic challenges, including raising the corporate tax rate from 30% to 39%, passing amendments to the income tax, sales tax and use tax, or IVU, effective July 1, 2015, which implements a rate of 11.5%, and passing a new value added tax system (that will replace the IVU on June 1, 2016) that implements a rate of 10.5%, which will apply to certain taxable transactions and articles, including a merchant's sale into Puerto Rico of goods and services, a non-resident's rendering of a service to a person in Puerto Rico, and other combined transactions, passing a balanced budget for fiscal 2015, and other significant expenditure controls and revenue enhancement measures. Despite these efforts, the Puerto Rican economy has been and continues to be in a recession since 2006, and has been burdened by limited economic activity, lower-than-estimated revenue collections, high government debt levels relative to the size of the economy and other potential fiscal challenges. There can be no assurance that any past or new actions taken by any governmental or regulatory body for the purpose of stabilizing the economy or financial markets will achieve their intended effect. Additionally, such fiscal measures may end up having direct negative consequences to our Business and results of operations.

        Persistent deficits in Puerto Rico's fiscal accounts, as well as mounting deficits in the operation of several major public corporations have substantially raised Puerto Rico's overall public debt to approximately $72 billion. On June 28, 2015 the Governor of Puerto Rico publicly announced that his

33

administration will seek broad concessions from the commonwealth's creditors, warning that Puerto Rico's obligations on its outstanding municipal bonds are not otherwise payable. Unlike U.S. municipalities, Puerto Rican public corporations and municipalities do not have the protections of Chapter 9 of the U.S. Bankruptcy Code following the U.S. District Court for the District of Puerto Rico ruling and affirmation by U.S. Circuit Court of Appeals for the First Circuit that the Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the "Recovery Act") was preempted by the U.S. Bankruptcy Code and void pursuant to the Supremacy Clause of the United States Constitution. Following the Governor's announcement to seek broad concessions from bondholders, on July 28, 2015, U.S. Treasury Secretary Jacob Lew urged immediate action from Congress to pass pending legislation in order to open a bankruptcy path for Puerto Rican public corporations and municipalities. Secretary Lew warned the Senate Finance Committee that without a tested legal regime in place, any resolution of Puerto Rico's financial obligations would likely be a chaotic, protracted, and costly process both for Puerto Rico and more broadly for the United States.

        On August 3, 2015, Puerto Rico's Government Development Bank failed to make a $58 million payment in full due on behalf of the Public Finance Corporation, citing lack of appropriated funds for such payment, which prompted Moody's to declare an event of default. On January 4, 2016, the Government Development Bank purposefully elected to default on a $174 million payment on behalf of the Public Finance Corporation and Infrastructure Financing Authority to certain lower ranked creditors (in lieu of making a payment in full to higher ranked creditors), which prompted Standard & Poor's to downgrade the rating for Puerto Rico Infrastructure Financing Authority bonds from CC to D. Following Puerto Rico's second default, the U.S. Department of the Treasury urged Congress to enact legislation under the Territorial Clause of the U.S. Constitution to provide Puerto Rico with the power to restructure its approximately $72 billion in debt and other liabilities through the courts and with federal oversight. Congress seeks to review specific legislation addressing Puerto Rico's debt obligations by the end of March 2016. It is unclear if and when any specific legislation will be approved and, if approved, whether such legislation will have retroactive effect for the commonwealth's outstanding debt.

        In addition, on December 4, 2015, the Supreme Court agreed to hear a case captioned, The Commonwealth of Puerto Rico et al. v. Franklin California Tax-Free Trust et al., which involves a challenge to the Commonwealth of Puerto Rico's ability to restructure its outstanding debt under local law. At issue is whether the Recovery Act, which provides certain public corporations of the Commonwealth of Puerto Rico the ability to ask bondholders to accept losses on the securities they hold, is preempted by and thus invalid under Chapter 9 of the U.S. Bankruptcy Code which forbids states from enacting restructuring schemes that bind creditors without their consent, and whether Chapter 9 of the U.S. Bankruptcy Code applies even though Puerto Rico is not authorized to access Chapter 9 itself. If the Commonwealth of Puerto Rico should not prevail in the pending litigation, economic conditions in Puerto Rico could continue to worsen and such conditions could have an adverse effect on our Business, results of operations, and/or financial condition. Moreover, the ultimate disposition of this proceeding may impact or delay the ability of Congress to pass specific legislation aimed at remedying Puerto Rico's outstanding debt obligations. We cannot predict the ultimate outcome of this proceeding.

        Inability to extract concessions from Puerto Rico's bondholders, lack of legislative or judicial resolution to allow Chapter 9 protection to Puerto Rican public corporations and municipalities, a potential government shutdown, potential expenses and delays implementing budget solutions, the loss or reduction in the flow of federal funds, additional unemployment, and contraction in the manufacturing and construction sectors could have serious negative consequences for Puerto Rico's economy and further heighten the risks associated with the our exposure to Puerto Rico's economy. In addition, continued volatile economic conditions in Puerto Rico or declines in consumer confidence

34

could have a negative impact on the broadcast television industry or the industries of our advertisers, resulting in reduced advertising sales.

        In addition to any negative direct consequences to our Business or results of operations arising from these financial and economic developments, some of these actions may adversely affect financial institutions, advertisers, or other consumers on whom we rely. Our Business and results of operations could be negatively affected as a result. Additionally, our access to future capital or financing arrangements, or the cost of such capital or financings, may be affected by the economic climate in Puerto Rico.

Certain of our Cable Networks have international operations and exposures that incur certain risks not found in doing business in the United States.

        Doing business in foreign countries carries with it certain risks that are not found in doing business in the United States. The risks of doing business in foreign countries that could result in losses against which our Cable Networks are not insured include:

•

exposure to local economic conditions;

•

potential adverse changes in the diplomatic relations of foreign countries with the United States;

•

hostility from local populations;

•

significant fluctuations in foreign currency value;

•

the adverse effect of currency exchange controls or other restrictions;

•

restrictions on the withdrawal of foreign investment and earnings;

•

government policies against businesses owned by foreigners;

•

investment restrictions or requirements;

•

expropriations of property;

•

the potential instability of foreign governments and economies;

•

the risk of insurrections;

•

difficulties in collecting revenues and seeking recourse against 3^rd parties owing payments to us;

•

withholding and other taxes on remittances and other payments by subsidiaries;

•

changes in taxation structure; and

•

shifting consumer preferences regarding the viewing of video programming.

        Furthermore, some foreign markets where we operate may be more adversely affected by current economic conditions than the U.S. We also may incur additional expenses as a result of changes, including the imposition of new restrictions, in the existing economic or political environment in the regions where we do business. Acts of terrorism, hostilities, or financial, political, economic or other uncertainties could lead to a reduction in revenue or loss of investment, which could adversely affect our results of operations.

Any violation of the Foreign Corrupt Practices Act or other similar laws and regulations could have a negative impact on us.

        We are subject to risks associated with doing business outside of the United States, which exposes us to complex foreign and U.S. regulations inherent in doing business cross-border and in each of the countries in which we transact business. We are subject to regulations imposed by the Foreign Corrupt

35

Practices Act, or the FCPA, and other anti-corruption laws that generally prohibit U.S. companies and their subsidiaries from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business. Violations of the FCPA and other anti-corruption laws may result in severe criminal and civil sanctions as well as other penalties and the SEC and U.S. Department of Justice have increased their enforcement activities with respect to the FCPA. Internal control policies and procedures and employee training and compliance programs that we have implemented to deter prohibited practices may not be effective in prohibiting employees, contractors or agents from violating or circumventing such policies and the law. If our employees or agents fail to comply with applicable laws or company policies governing their international operations, we may face investigations, prosecutions and other legal proceedings and actions which could result in civil penalties, administrative remedies and criminal sanctions. Any determination that we have violated the FCPA could have a material adverse effect on our financial condition. Compliance with international and U.S. laws and regulations that apply to international operations increases the cost of doing business in foreign jurisdictions.

Adverse conditions in the U.S. and international economies could negatively impact our results of operations.

        Unfavorable general economic conditions, such as a recession or economic slowdown in parts of the United States or in one or more of the major markets in which we operate, could negatively affect the affordability of and demand for some of our products and services. In addition, adverse economic conditions may lead to loss of subscriptions for our Networks. If these events were to occur, it could have a material adverse effect on our results of operations.

        The risks associated with our advertising revenue become more acute in periods of a slowing economy or recession, which may be accompanied by a decrease in advertising. Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and buying patterns. Cancellations, reductions or delays in purchases of advertising could, and often do, occur as a result of a strike, a general economic downturn, an economic downturn in one or more industries or in one or more geographic areas, or a failure to agree on contractual terms.

Any potential hostilities, terrorist attacks, or similarly newsworthy events leading to broadcast interruptions, may affect our revenues and results of operations.

        If any existing hostilities escalate, or if the United States experiences a terrorist attack or experiences any similar event resulting in interruptions to regularly scheduled broadcasting, we may lose revenue and/or incur increased expenses. Lost revenue and increased expenses may be due to preemption, delay or cancellation of advertising campaigns, or diminished subscriber fees, as well as increased costs of covering such events. We cannot predict the (i) extent or duration of any future disruption to our programming schedule, (ii) amount of advertising revenue that would be lost or delayed, (iii) the amount of decline in any subscriber fees or (iv) the amount by which broadcasting expenses would increase as a result. Any such loss of revenue and increased expenses could negatively affect our results of operations.

The broadcast incentive auction could result in the modification of our broadcast licenses for WAPA by requiring us to operate on other channels.

        The FCC has begun an incentive auction to recapture certain spectrum currently used by television broadcasters and repurpose it for other uses. The incentive auction process has three components.

        First, the FCC will conduct a reverse auction by which each television broadcaster may choose to retain its rights to a 6 MHz channel of spectrum or volunteer, in return for payment, to relinquish its station's spectrum by surrendering the station's license; relinquishing the right to the station's spectrum and thereafter share spectrum with another station; or, for stations that operate in the UHF spectrum,

36

modifying the station's UHF channel license to a VHF channel license. Applications for television stations to participate in the reverse auction were due January 12, 2016. The reverse auction will commence on March 29, 2016, when television stations participating in the auction are required to make their initial bid commitments.

        Second, the FCC will conduct a forward auction of the relinquished broadcast spectrum to new users.

        Third, the FCC will "repack" television stations that do not relinquish spectrum in the auction in remaining television broadcast spectrum, which may require certain television stations that did not participate in the reverse auction to modify their transmission facilities, including requiring such stations to operate on other channel designations. The FCC is authorized to reimburse stations for reasonable relocation costs up to a total across all stations of $1.75 billion. The FCC, when repacking the television broadcast spectrum, will use reasonable efforts to preserve a station's coverage area and population served. The FCC is prohibited from requiring a station to move involuntarily from the UHF spectrum band, the band in which WAPA's broadcast licenses operate, to the VHF spectrum band or from the high VHF band to the low VHF band.

        Although we believe the broadcast incentive auction will have no material negative impact on our Business, the outcome of the incentive auction and repacking of broadcast television spectrum or the impact of such items on our Business cannot be predicted.

Our Networks are subject to interruptions of distribution as a result of our reliance on broadcast towers, satellites and Distributors for transmission of its programming. A significant interruption in transmission ability could seriously affect our Business and results of operations, particularly if not fully covered by its insurance.

        Our Networks could experience interruptions of distribution or potentially long-term increased costs of delivery if the ability of broadcast towers, satellites or satellite transponders, or Distributors to transmit our Networks' content is disrupted because of accidents, weather interruptions, governmental regulation, terrorism, or other third party action.

        As protection against these hazards, we maintain insurance coverage against some, but not all, such potential losses and liabilities. We may not be able to maintain or obtain insurance of the type and amount we desire at reasonable rates. As a result of market conditions, premiums and deductibles for certain of our insurance policies may increase substantially. In some instances, certain insurance could become unavailable or available only for reduced amounts of coverage. For example, coverage for hurricane damage can be limited, and coverage for terrorism risks can include broad exclusions. If our Networks were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our financial position.

The success of much of our Business is dependent upon the retention and performance of on-air talent and program hosts and other key employees.

        Our Business depends upon the continued efforts, abilities and expertise of our corporate executive team. There can be no assurance that these individuals will remain with us. Our Business, financial condition and results of operations could be materially adversely affected if we lose any of these persons and are unable to attract and retain qualified replacements. Additionally, our Networks independently contract with several on-air personalities and hosts with significant loyal audiences in their respective markets. Although our Networks have entered into long-term agreements with some of their key on-air talent and program hosts to protect their interests in those relationships, we can give no assurance that all or any of these persons will remain with our Networks or will retain their audiences. Competition for these individuals is intense and many of these individuals are under no legal obligation to remain with our Networks. Our competitors may choose to extend offers to any of these

37

individuals on terms which our Networks may be unable or unwilling to meet. Furthermore, the popularity and audience loyalty of our Networks' key on-air talent and program hosts is highly sensitive to rapidly changing public tastes. A loss of such popularity or audience loyalty is beyond our control and could limit our Network' ability to generate revenue and could have a material adverse effect on our Business, financial condition and results of operations.

We may need to increase the size of our organization, and may experience difficulties in managing growth.

        At Hemisphere, the parent holding company, we do not have significant operating assets and only have a limited number of employees. In connection with the completion of any future acquisitions, we may be required to hire additional personnel and enhance our information technology systems. Any future growth may increase our corporate operating costs and impose significant added responsibilities on members of our management, including the need to identify, recruit, maintain and integrate additional employees and implement enhanced informational technology systems. Our future financial performance and our ability to compete effectively will depend, in part, on our ability to manage any future growth effectively. Future growth will also increase our costs and expenses and limit our liquidity.

We could be adversely affected by strikes or other union job actions.

        A majority of our employees in Puerto Rico are highly specialized union members who are essential to the production of television programs and news. These employees are covered by our CBAs, one of which was scheduled to expire on July 23, 2015 and the other which expires on June 27, 2016. Pursuant to its terms, the CBA which was scheduled to expire on July 23, 2015 automatically renewed for a period of eighteen (18) months upon such expiration date and remains in effect through January 23, 2017 while the Company and UPAGRA negotiate its renewal. While we believe that we will maintain good working relations with our employees on acceptable terms, there can be no assurance that we will be able to negotiate the terms of the expired CBA in a manner acceptable to the Company. A strike by, or a lockout of, UPAGRA, which provides personnel essential to the production of television programs, could delay or halt our ongoing production activities. Such a halt or delay, depending on the length of time, could cause a delay or interruption in the programming schedule of certain of our Networks, which could have a material adverse effect on our Business, financial condition and results of operations.

We could become obligated to pay additional contributions due to the unfunded vested benefits of a multiemployer pension plan. A future incurrence of withdrawal liability could have a material effect on our results of operations.

        WAPA makes contributions to the Newspaper Guild International Pension Plan (the "Plan" or "TNGIPP"), a multiemployer pension plan with a plan year end of December 31 that provides defined benefits to certain employees covered by our two CBAs. WAPA's contribution rates to the Plan are generally determined in accordance with the provisions of the CBAs and a rehabilitation plan that was adopted by the TNGIPP.

        The risks in participating in such a plan are different from the risks of single-employer plans, in the following respects:

•

Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employer.

•

If a participating employer ceases to contribute to a multiemployer plan, the unfunded obligation of the plan may be borne by the remaining participating employers.

38

        WAPA has received Annual Funding Notices, Report of Summary Plan Information, Critical Status Notices ("Notices") and the above-noted Rehabilitation Plan, as defined by the Pension Protection Act of 2006 ("PPA"), from the Plan. The Notices indicate that the Plan actuary has certified that the Plan is in critical status, the "Red Zone", as defined by the PPA, and that a plan of rehabilitation ("Rehabilitation Plan") was adopted by the Trustees of the Plan ("Trustees") on May 1, 2010 and then updated on November 17, 2015. On May 29, 2010, the Trustees sent WAPA a Notice of Reduction and Adjustment of Benefits Due to Critical Status explaining all changes adopted under the Rehabilitation Plan, including the reduction or elimination of benefits referred to as "adjustable benefits." In connection with the adoption of the Rehabilitation Plan, most of the Plan participating unions and contributing employers (including the Newspaper Guild International and WAPA), agreed to one of the "schedules" of changes as set forth under the Rehabilitation Plan. WAPA elected the "Preferred Schedule" and executed a Memorandum of Agreement, effective May 27, 2010 (the "MOA") and agreed to the following contribution rate increases: 3.0% beginning on January 1, 2013; an additional 3.0% beginning on January 1, 2014; and an additional 3% beginning on January 1, 2015. In 2015, The Plan's Trustee's reviewed the Rehabilitation Plan and the financial projections under the Plan and determined that is was not prudent to continue benefit accruals under the current Plan and that implementation of a updated plan with a new benefit design would be in the best interest of the Plan's participants. As a result, the Plan's Board of Trustee's adopted changes to the Rehabilitation Plan effective January 1, 2016.

        Under the Rehabilitation Plan, as revised in 2015, WAPA will need to agree to one of the updated "schedules" of changes as set forth under the revised Rehabilitation Plan. These schedule options include a new preferred schedule that does not require contribution increases but requires the employer to commit to remaining in the Plan for an additional five years, or the existing preferred schedule or a default schedule, both of which require annual contribution increases of 3% (starting January 1, 2016).

        The future cost of the Plan depends on a number of factors, including the funding status of the Plan and the ability of other participating companies to meet ongoing funding obligations. Participating employers in the Plan are jointly responsible for any plan underfunding. Assets contributed to the Plan are not segregated or otherwise restricted to provide benefits only to the employees of WAPA. While WAPA's pension cost for the Plan is established by the CBA, the Plan may further revise the Rehabilitation Plan to impose additional increased contribution rates and surcharges based on the funded status of the plan and in accordance with the provisions of the Rehabilitation Plan and the PPA. Factors that could impact the funded status of the Plan include investment performance, changes in the participant demographics, financial stability of contributing employers and changes in actuarial assumptions.

        The contribution increases and effect of the Rehabilitation Plan as described above are not anticipated to have a material effect on our results of operations. However, in the event other contributing employers are unable to, or fail to, meet their ongoing funding obligations, the financial impact on WAPA to contribute to any plan underfunding may be material. In addition, if a United States multiemployer defined benefit plan fails to satisfy certain minimum funding requirements, the Internal Revenue Service may impose a nondeductible excise tax of 5% on the amount of the accumulated funding deficiency for those employers contributing to the fund.

39

        If WAPA completely or partially withdrew from the Plan, it would be obligated to pay complete or partial withdrawal liability (which could be material). Pursuant to the last available notice (for the Plan year ended December 31, 2014), WAPA's contributions to the Plan exceeded 5% of total contributions made to the Plan. For more information, see Note 11, "Retirement Plans" of Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K.

A large portion of our revenue is generated from a limited number of customers, and the loss of these customers could adversely affect our Business.

        Our Networks depend upon agreements with a limited number of Distributors. For the year ended December 31, 2015, one of our Distributors accounted for more than 10% of our total net revenues. The loss of channel carriage with any significant Distributor, or our inability to renew an affiliation agreement with any significant Distributor on acceptable terms, would have a materially adverse effect on our Business, financial condition and results of operations.

If our goodwill or intangibles become impaired, we will be required to recognize a non-cash charge which could have a significant effect on our reported net earnings.

        A significant portion of our assets consist of goodwill and intangibles. We test our goodwill and intangibles for impairment each year. A significant downward revision in the present value of estimated future cash flows for a reporting unit could result in an impairment of goodwill and intangibles and a noncash charge would be required. Such a charge could have a significant effect on our reported net earnings.

Possible strategic initiatives may impact our Business.

        We will continue to evaluate the nature and scope of our operations and various short-term and long-term strategic considerations. There are uncertainties and risks relating to strategic initiatives. Also, prospective competitors may have greater financial resources. These factors may place us at a competitive disadvantage in successfully completing future acquisitions and investments. Future acquisitions may not be available on attractive terms, or at all. If we do make acquisitions, we may not be able to successfully integrate the acquired businesses. In addition, while we believe that there may be target businesses that we could potentially acquire or invest in, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources. We may need to obtain additional financing in order to consummate future acquisitions and investment opportunities. We cannot assure you that any additional financing will be available to us on acceptable terms, if at all. This inherent competitive limitation gives others with greater financial resources an advantage in pursuing acquisition and investment opportunities. Finally, certain acquisitions or divestitures may be subject to FCC approval and FCC rules and regulations. If we do not realize the expected benefits or synergies of such transactions, there may be an adverse effect on our Business, financial condition and results of operations.

Future acquisitions or business opportunities could involve unknown risks that could harm our Business and adversely affect our financial condition.

        In the future we may acquire other businesses or make other acquisitions, such as the Acquired Cable Networks, that involve unknown risks. Although we intend to conduct extensive business, financial and legal due diligence in connection with the evaluation of future business or acquisition opportunities, there can be no assurance our due diligence investigations will identify every matter that could have a material adverse effect on us. We may be unable to adequately address the financial, legal and operational risks raised by such businesses or acquisitions. The realization of any unknown risks could expose us to unanticipated costs and liabilities and prevent or limit us from realizing the projected benefits of the businesses or acquisitions, which could adversely affect our financial condition and liquidity. In addition, our Business, financial condition, results of operations and the ability to

40

service our debt may be adversely impacted depending on specific risks applicable to any business or company we acquire.

Any potential acquisition or investment in a foreign business or a company with significant foreign operations may subject us to additional risks.

        Acquisitions or investments by us in a foreign business or other companies with significant foreign operations, subjects us to risks inherent in business operations outside of the United States. These risks include, for example, currency fluctuations, complex foreign regulatory regimes, unstable local tax policies, restrictions on the movement of funds across national borders and cultural and language differences. If realized, some of these risks may have a material adverse effect on our Business, results of operations and liquidity, and can have an adverse effect on our ability to service our debt.

We could consume resources in researching acquisitions, business opportunities or financings and capital market transactions that are not consummated, which could materially adversely affect subsequent attempts to locate and acquire or invest in another business.

        We anticipate that the investigation of each specific acquisition or business opportunity and the negotiation, drafting, and execution of relevant agreements, disclosure documents, and other instruments, with respect to such transaction, will require substantial management time and attention and substantial costs for financial advisors, accountants, attorneys and other advisors. If a decision is made not to consummate a specific acquisition, business opportunities or financings and capital market transactions investment or financing, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, even if an agreement is reached relating to a specific acquisition, investment target or financing, we may fail to consummate the investment or acquisition for any number of reasons, including those beyond our control. Any such event could consume significant management time and result in a loss to us of the related costs incurred, which could adversely affect our financial position and our ability to consummate other acquisitions and investments.

We have incurred substantial costs in connection with our previous acquisitions, including legal, accounting, advisory and other costs.

        We have incurred substantial costs in connection with our prior acquisitions and expect to incur substantial costs in connection with any other transaction we complete in the future. For example, upon the consummation of the acquisition of the Acquired Cable Business, we incurred significant costs, including a number of non-recurring costs associated with the transaction. Some of these costs are payable regardless of whether the acquisition is completed. These costs will reduce the amount of cash otherwise available to us for acquisitions, business opportunities and other corporate purposes. There is no assurance that the actual costs will not exceed our estimates. We may continue to incur additional material charges reflecting additional costs associated with our investments and the integration of our acquisitions including, our investment in the Acquired Cable Business, in fiscal quarters subsequent to the quarter in which the relevant acquisition was consummated.

Our officers, directors, stockholders and their respective affiliates may have a pecuniary interest in certain transactions in which we are involved, and may also compete with us.

        We have not adopted a policy that expressly prohibits our directors, officers, stockholders or affiliates from having a direct or indirect pecuniary interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest. Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us. We may, subject to the terms of our Amended Term Loan Facility and applicable law, enter into transactions in which such persons have an interest. In addition, such parties may have an interest in certain transactions such as strategic partnerships or joint ventures in which we may become involved, and may also compete with us.

41

In the course of their other business activities, certain of our officers and directors may become aware of investment and acquisition opportunities that may be appropriate for presentation to us as well as the other entities with which they are affiliated. Such officers and directors may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

        Certain of our officers and directors may become aware of business opportunities which may be appropriate for presentation to us as well as the other entities with which they are or may be affiliated. Due to those officers' and directors' existing affiliations with other entities, they may have fiduciary obligations to present potential business opportunities to those entities in addition to presenting them to us, which could cause additional conflicts of interest. To the extent that such officers and directors identify business combination opportunities that may be suitable for entities to which they have pre-existing fiduciary obligations, or are presented with such opportunities in their capacities as fiduciaries to such entities, they may be required to honor their pre-existing fiduciary obligations to such entities. Accordingly, they may not present business combination opportunities to us that otherwise may be attractive to such entities unless the other entities have declined to accept such opportunities.

Future acquisitions and dispositions may not require a stockholder vote and may be material to us.

        Any future acquisitions could be material in size and scope, and our stockholders and potential investors may have virtually no substantive information about any new business upon which to base a decision whether to invest in our Class A common stock. In any event, depending upon the size and structure of any acquisitions, stockholders are generally expected to not have the opportunity to vote on the transaction, and may not have access to any information about any new business until the transaction is completed and we file a report with the Commission disclosing the nature of such transaction and/or business. Similarly, we may effect material dispositions in the future. Even if a stockholder vote is required for any of our future acquisitions, under our amended and restated certificate of incorporation and our amended and restated bylaws, our stockholders are allowed to approve such transactions by written consent, which may effectively result in only our controlling stockholder having an opportunity to vote on such transactions.

Protection of electronically stored data is costly and if our data is compromised in spite of this protection, we may incur additional costs, lost opportunities and damage to our reputation.

        We maintain information in digital form necessary to conduct our Business, including confidential and proprietary information regarding our Networks' advertisers, customers, Distributors, employees and viewers as well as personal information. Data maintained in digital form is subject to the risk of intrusion, tampering and theft. We develop and maintain systems to prevent this from occurring, but the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Moreover, despite our efforts, the possibility of intrusion, tampering and theft cannot be eliminated entirely, and risks associated with each of these remain. In addition, we provide confidential, proprietary and personal information to third parties when it is necessary to pursue business objectives. While we obtain assurances that these third parties will protect this information and, where appropriate, monitor the protections employed by these third parties, there is a risk the confidentiality of data held by third parties may be compromised. If our data systems are compromised, our ability to conduct our Business may be impaired, we may lose profitable opportunities or the value of those opportunities may be diminished and, as described above, we may lose revenue as a result of unlicensed use of our intellectual property. Further, a penetration of our network security or other misappropriation or misuse of personal consumer or employee information could subject us to financial, litigation and reputation risk, which could have a negative effect on our Business, financial condition and results of operations.

42

Unrelated third parties may bring claims against us based on the nature and content of information posted on websites maintained by our Networks.

        Our Networks host, or may host in the future, internet sites that enable individuals to exchange information, generate content, comment on content, and engage in various online activities. The law relating to the liability of providers of these online services for activities of their users is currently unsettled both within the United States and internationally. Claims may be brought against us for defamation, negligence, copyright or trademark infringement, unlawful activity, tort, including personal injury, fraud, or other theories based on the nature and content of information that may be posted online or generated by our Networks' internet site users, including WAPA.TV, CINELATINO.COM, TVPASIONES.COM, CENTROAMERICATV.TV, and TELEVISIONDOMINICANA.TV. Defenses of such actions could be costly and involve significant time and attention of our Networks' management, our management and other resources.

The success of our Business is highly dependent on the existence and maintenance of intellectual property rights in the entertainment products and services we create.

        The value to us of our intellectual property rights is dependent on the scope and duration of our rights as defined by applicable laws in the U.S. and abroad and the manner in which those laws are construed. If those laws are drafted or interpreted in ways that limit the extent or duration of our rights, or if existing laws are changed, our ability to generate revenue from our intellectual property may decrease, or the cost of obtaining and maintaining rights may increase. There can be no assurance that our efforts to enforce our rights and protect our products, services and intellectual property will be successful in preventing content piracy or signal theft. Content piracy and signal theft present a threat to our revenues.

        The unauthorized use of our intellectual property rights may increase the cost of protecting these rights or reduce our revenues. New technologies such as the convergence of computing, communication, and entertainment devices, the falling prices of devices incorporating such technologies, and increased broadband internet speed and penetration have made the unauthorized digital copying and distribution of our programming content easier and faster and enforcement of intellectual property rights more challenging. The unauthorized use of intellectual property in the entertainment industry generally continues to be a significant challenge for intellectual property rights holders. Inadequate laws or weak enforcement mechanisms to protect intellectual property in one country can adversely affect the results of our operations worldwide, despite our efforts to protect our intellectual property rights. These developments may require us to devote substantial resources to protecting our intellectual property against unlicensed use and present the risk of increased losses of revenue as a result of unlicensed distribution of our content.

        With respect to intellectual property developed by us and rights acquired by us from others, we are subject to the risk of challenges to our copyright, trademark and patent rights by third parties. Successful challenges to our rights in intellectual property may result in increased costs for obtaining rights or the loss of the opportunity to earn revenue from the intellectual property that is the subject of challenged rights. We are not aware of any challenges to our intellectual property rights that we currently foresee having a material effect on our operations.

If we are unable to protect our domain names, our reputation and brands could be adversely affected.

        We currently hold various domain name registrations relating to our brands. The registration and maintenance of domain names generally are regulated by governmental agencies and their designees. Governing bodies may establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. As a result, we may be unable to register or maintain relevant domain names. We may be unable, without significant cost or at all, to prevent third parties from registering domain names that are similar to, infringe upon or otherwise

43

decrease the value of, our and our subsidiaries trademarks and other proprietary rights. Failure to protect our domain names could adversely affect our reputation and brands, and make it more difficult for users to find our Business's websites and services.

We may face intellectual property infringement claims that could be time-consuming, costly to defend and result in loss of significant rights.

        Other parties may assert intellectual property infringement claims against us, and our Networks' products may infringe the intellectual property rights of third parties. From time to time, our Business receives letters alleging infringement of intellectual property rights of others. Intellectual property litigation can be expensive and time-consuming and could divert management's attention from our Business. If there is a successful claim of infringement against us, we may be required to pay substantial damages to the party claiming infringement or enter into royalty or license agreements that may not be available on acceptable or desirable terms, if at all. Our failure to license proprietary rights on a timely basis would harm our Business.

Changes in governmental regulation, interpretation or legislative reform could increase our Business's cost of doing business and adversely affect our profitability.

        Laws and regulations, including in the areas of advertising, consumer affairs, data protection, finance, marketing, privacy, publishing and taxation requirements, are subject to change and differing interpretations. Changes in the political climate or in existing laws or regulations, or their interpretations, or the enactment of new laws or the issuance of new regulations or changes in enforcement priorities or activity could adversely affect us by, among other things:

•

increasing our administrative, compliance, and other costs;

•

forcing us to undergo a corporate restructuring;

•

limiting our ability to engage in inter-company transactions with our affiliates and subsidiaries;

•

increasing our tax obligations, including unfavorable outcomes from audits performed by various tax authorities;

•

affecting our ability to continue to serve our Networks' customers and to attract new customers;

•

affecting cash management practices and repatriation efforts;

•

forcing us to alter or restructure our Networks' relationships with vendors and contractors;

•

increasing compliance efforts or costs;

•

limiting our use of or access to personal information;

•

restricting our ability to market our products; and

•

requiring us to implement additional or different programs and systems.

        Compliance with regulations is costly and time-consuming, and we may encounter difficulties, delays or significant expenses in connection with such compliance, and we may be exposed to significant penalties, liabilities, reputational harm and loss of business in the event that we fail to comply. While it is not possible to predict when or whether fundamental policy or interpretive changes would occur, these or other changes could fundamentally change the dynamics of the industries in which we operate or the costs associated with our operations. Changes in public policy or enforcement priorities could materially affect our profitability, our ability to retain or grow business, or in the event of extreme circumstances, our financial condition. There can be no assurance that legislative or regulatory change or interpretive differences will not have a material adverse effect on our Business.

44

Changes in accounting standards can significantly impact reported operating results.

        Generally accepted accounting principles, accompanying pronouncements and implementation guidelines for many aspects of our Business, including those related to intangible assets and income taxes, are complex and involve significant judgments. Changes in these rules or their interpretation could significantly change our reported operating results.

Section 404 of the Sarbanes-Oxley Act of 2002 requires us to document and test our internal controls over financial reporting and to report on our assessment as to the effectiveness of these controls. Any delays or difficulty in satisfying these requirements or negative reports concerning our internal controls could have a material adverse effect on our future results of operations and financial condition.

        The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. We must perform system and process evaluation and testing of our internal control over financial reporting to allow our management to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Our testing, or the subsequent testing by our independent registered public accounting firm, may reveal deficiencies in internal control over financial reporting that are deemed to be material weaknesses. Compliance with Section 404 will require that we incur substantial accounting expense and expend significant management time on compliance-related issues. The need to focus on compliance with Section 404 of Sarbanes-Oxley may strain management and finance resources and otherwise present additional administrative and operational challenges as our management seeks to comply with these requirements.

        We may in the future discover areas of our internal controls that need improvement, particularly with respect to our existing acquired businesses, businesses that we may acquire in the future and newly formed businesses or entities. We cannot be certain that any remedial measures we take will ensure that we implement and maintain adequate internal controls over our financial reporting processes and reporting in the future.

        In addition, we may acquire an entity that was not previously subject to U.S. public company requirements or did not previously prepare financial statements in accordance with GAAP or is not in compliance with the requirements of the Sarbanes-Oxley Act of 2002 or other public company reporting obligations applicable to such entity. We may incur additional costs in order to ensure that after such acquisition, we continue to comply with the requirements of the Sarbanes-Oxley Act of 2002 and our other public company requirements, which in turn could reduce our earnings or cause us to fail to meet our reporting obligations. In addition, development of an adequate financial reporting system and the internal controls of any such entity to achieve compliance with the Sarbanes-Oxley Act of 2002 may increase the time and costs necessary to complete any such acquisition or cause us to fail to meet our reporting obligations. To the extent any of these newly acquired entities or any existing entities have deficiencies in its internal controls, it may impact our internal controls.

        Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our operating results or cause us to fail to meet our reporting obligations. If we are not able to comply with the requirements of Section 404 in a timely manner, if we fail to remedy any material weakness and maintain effective internal control over our financial reporting in the future, or if our independent registered public accounting firm is unable to provide us with an unqualified report regarding the effectiveness of our internal controls over financial reporting to the extent required by Section 404 of the Sarbanes-Oxley Act of 2002, our financial statements may be inaccurate, our ability to report our financial results on a timely and accurate basis may be adversely affected, investors could lose confidence in the reliability of our financial statements, our access to the capital markets may be restricted, the trading price of our Class A common stock and Warrants may decline, and we may be subject to sanctions or investigations by regulatory authorities, including the SEC or NASDAQ. In addition, failure to comply with our reporting obligations with the Commission

45

may cause an event of default to occur under our Amended Term Loan Facility, or similar instruments governing any debt we incur in the future.

From time to time we may be subject to litigation for which we may be unable to accurately assess our level of exposure and which, if adversely determined, may have a material adverse effect on our consolidated financial condition or results of operations.

        We and our subsidiaries are or may become parties to legal proceedings that are considered to be either ordinary or routine litigation incidental to our or their current or prior businesses or not material to our consolidated financial position or liquidity. There can be no assurance that we will prevail in any litigation in which we or our subsidiaries may become involved, or that our or their insurance coverage will be adequate to cover any potential losses. To the extent that we or our subsidiaries sustain losses from any pending litigation which are not reserved or otherwise provided for or insured against, our Business, results of operations, cash flows and/or financial condition could be materially adversely affected.

Our Amended Term Loan Facility may limit our financial and operating flexibility.

        Our Amended Term Loan Facility includes financial covenants restricting our subsidiaries ability to incur additional indebtedness, pay dividends or make other payments, make loans and investments, sell assets, incur certain liens, enter into transactions with affiliates, and consolidate, merge or sell assets. These covenants limit our ability to fund future working capital and capital expenditures, engage in future acquisitions or development activities, or otherwise realize the value of our assets and opportunities fully because of the need to dedicate a portion of cash flow from operations to payments on debt. In addition, such covenants limit our flexibility in planning for, or reacting to, changes in the industries in which we operate.

Risks Related to Our Securities and Corporate Structure

If securities or industry analysts do not publish or cease publishing research or reports about us, our Business, or our market, or if they change their recommendations regarding our Class A common stock adversely, the price and trading volume of our Class A common stock and Warrants could decline.

        If securities or industry analysts do not publish or cease publishing research or reports about us, our Business, or our market, or if they change their recommendations regarding our Class A common stock adversely, the price and trading volume of our Class A common stock and Warrants could decline. The trading market for our Class A common stock and Warrants will be influenced by the research and reports that industry or securities analysts may publish about our Business, our market, or our competitors. As of December 31, 2015, only two industry analysts currently publish research on our Business. If any of the analysts who may cover our Business change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our Class A common stock and Warrants would likely decline. If any analyst who may cover our Business were to cease coverage of Hemisphere or fail to regularly publish reports about us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.

The stock price of our Class A common stock and Warrants may be volatile.

        The stock price of our Class A common stock and Warrants may be volatile and subject to wide fluctuations. In addition, the trading volume of our Class A common stock and Warrants may fluctuate and cause significant price variations to occur. Some of the factors that could cause fluctuations in the stock price or trading volume of our Class A common stock and Warrants include:

•

market and economic conditions, including market conditions in the cable television programming and broadcasting industries;

46

•

actual or expected variations in quarterly operating results;

•

future exercise of Warrants held by warrant holders;

•

liquidity of our Class A common stock and our Warrants;

•

differences between actual operating results and those expected by investors and analysts;

•

changes in recommendations by securities analysts;

•

operations and stock performance of our competitors;

•

accounting charges, including charges relating to the impairment of goodwill;

•

significant acquisitions or strategic alliances by us or by our competitors;

•

sales of our Class A common stock, including sales by our directors and officers or significant investors;

•

recruitment or departure of key personnel;

•

loss of key advertisers; and

•

changes in reserves for professional liability claims.

        We cannot assure you that the price of our Class A common stock will not fluctuate or decline significantly in the future. In addition, the stock market in general can experience considerable price and volume fluctuations that may be unrelated to our performance.

The market liquidity for our Class A common stock and Warrants is relatively low and may make it difficult to purchase or sell our Class A common stock and Warrants.

        The average daily trading volume in our Class A common stock and our Warrants during the year ended December 31, 2015 was approximately 38,875 shares and 15,475, respectively. Although a more active trading market may develop in the future, there can be no assurance as to the liquidity of any markets that may develop for our Class A common stock and Warrants or the prices at which holders may be able to sell our Class A common stock and Warrants and the limited market liquidity for our securities could affect a holder's ability to sell at a price satisfactory to that holder.

We are a "controlled company" within the meaning of NASDAQ rules and, as a result, we qualify for, and choose to rely on, exemptions from certain corporate governance requirements.

        Our controlling stockholder, InterMedia, controls approximately 83.6% of the voting power of all of our outstanding capital stock. As a result of the concentration of the voting rights in our Company, we are a "controlled company" within the meaning of the rules and corporate governance standards of NASDAQ. Under the NASDAQ rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain NASDAQ corporate governance requirements, including:

•

the requirement that a majority of our board of directors consists of independent directors;

•

the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors;

•

the requirement that we have a compensation committee that is composed entirely of independent directors; and

•

the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

        We have elected not to comply with the above corporate governance requirements. Accordingly, our stockholders are not afforded the same protections generally as stockholders of other NASDAQ-

47

listed companies for so long as we remain a "controlled company" and rely upon such exemptions. The interests of our controlling stockholder may conflict with the interests of our other stockholders, and the concentration of voting power in such stockholder will limit our other stockholders ability to influence corporate matters.

Our controlling stockholder exercises significant influence over us and their interests in our Business may be different from the interests of our stockholders; future sales of substantial amounts of our Class A common stock may adversely affect our market price.

        Our controlling stockholder, InterMedia, controls approximately 83.6% of the voting power of all of our outstanding capital stock. The controlling stockholders' Class B common stock vote on a 10 to 1 basis with our Class A common stock, which means that each share of our Class B common stock has 10 votes and each share of our Class A common stock has 1 vote. All shares of our capital stock vote together as a single class. Accordingly, our controlling stockholder generally has the ability for the foreseeable future to influence the outcome of any of our corporate actions which require stockholder approval, including, but not limited to, the election of directors, significant corporate transactions, such as a merger or other sale of the Company or the sale of all or substantially all of our assets. This concentrated voting control will limit your ability to influence corporate matters and could adversely affect the market price of our Class A common stock and Warrants.

        Our controlling stockholder may delay or prevent a change in control in our Business. In addition, the significant concentration of stock ownership may adversely affect the value of our Class A common stock and Warrants due to a resulting lack of liquidity of our Class A common stock or a perception among investors that conflicts of interest may exist or arise. If our controlling stockholder sells a substantial amount of our Class A common stock (upon conversion of their Class B common stock, which may be converted at any time in their sole discretion) or Warrants in the public market, or investors perceive that these sales could occur, the market price of our Class A common stock and Warrants could be adversely affected.

        The interests of our controlling stockholder, which has investments in other companies, may from time to time diverge from the interests of our other stockholders, particularly with regard to new investment opportunities. Our controlling stockholder is not restricted from investing in other businesses involving or related to programming, content, production and broadcasting. Our controlling stockholder may also engage in other businesses that compete or may in the future compete with our Business.

        We have entered into a Registration Rights Agreement with certain parties, including our controlling stockholder. If requested properly under the terms of the Registration Rights Agreement, certain of these stockholders have the right to require us to register the offer and sale of all or some of their Class A common stock (including upon conversion of their Class B common stock and Warrants) under the Securities Act in certain circumstances and also have the right to include those shares in a registration initiated by us. If we are required to include the shares of capital stock held by these stockholders pursuant to these registration rights in a registration initiated by us, sales made by such stockholders may adversely affect the price of our Class A common stock and Warrants and our ability to raise needed capital. In addition, if these stockholders exercise their demand registration rights and cause a large number of shares to be sold in the public market or demand that we include their shares for registration on a shelf registration statement, such sales or shelf registration may have an adverse effect on the market price of our Class A common stock or Warrants.

        Any other future sales of substantial amounts of our Class A common stock into the public market, or perceptions in the market that such sales could occur, may adversely affect the prevailing market price of our Class A common stock and Warrants and impair our ability to raise capital through the sale of additional equity securities.

48

We have a staggered board of directors and other anti-takeover provisions, which may entrench management and discourage unsolicited stockholder proposals that may be in the best interests of our stockholders.

        Our amended and restated certificate of incorporation provides that our board of directors will be divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. As a result, at any annual meeting only a minority of the board of directors will be considered for election. Since this "staggered board" would prevent our stockholders from replacing a majority of our board of directors at any annual meeting, it may entrench management and discourage unsolicited stockholder proposals that may be in the best interests of our stockholders. Some of the provisions of our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could, together or separately, discourage potential acquisition proposals or delay or prevent a change in control. In particular, our board of directors is authorized to issue up to 50,000,000 shares of preferred stock with rights and privileges that might be senior to either class of our common stock and, without the consent of the holders of either class of our common stock.

Warrants may be exercised in the future, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.

        We issued Warrants to certain holders upon the consummation of the Transaction. To the extent such Warrants are exercised, additional shares of our Class A common stock will be issued, which will result in dilution to the holders of our common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our Class A common stock. For the year ended December 31, 2015, 10,000 Warrants had been exercised into 5,000 additional shares of our Class A common stock.

Pursuant to the terms of the agreements governing our Warrants, a warrantholder may exercise its Warrants for only a whole number of shares of our Class A common stock and such Warrants, are subject to redemption rights.

        Pursuant to the terms of the agreements governing our Warrants, a warrantholder may exercise its Warrants only for a whole number of shares of our Class A common stock. This means that only an even number of warrants may be exercised at any given time by the warrantholder. For example, if a warrantholder holds one Warrant to purchase one-half of a share of our Class A common stock, such Warrant shall not be exercisable. If a warrantholder holds two Warrants, such Warrants will be exercisable for one share of our Class A common stock. We will not pay cash in lieu of fractional Warrants and will not cash-settle any Warrants. Additionally, our Warrants, other than certain Warrants held by the holders of our Class B common stock and former affiliates of Azteca Acquisition Corporation, are subject to redemption, in our sole discretion, when the price of our Class A common stock trades at or above $18.00 per share for a specified trading period as set forth in the agreement governing our Warrants.

Our dependence on subsidiaries for cash flow may negatively affect our Business.

        We are a holding company with no business operations of our own. Our only significant asset is, the outstanding capital stock and membership interests of our subsidiaries. We conduct, and expect to continue conducting, all of our business operations through our subsidiaries. Accordingly, our ability to pay our obligations is dependent upon dividends and other distributions from our subsidiaries to us. Although our Amended Term Loan Facility permits certain restricted payments from our subsidiaries to us to pay for our administrative expenses corporate overhead, franchise taxes, public company costs, directors' fees and certain insurance premiums and deductibles, it restricts our subsidiaries ability to remit dividends to us in other instances. Additionally, dividends to us from WAPA are also subject to certain local taxation. Consequently, our ability to pay dividends is limited by funds that our

49

subsidiaries are permitted to dividend to us, and in certain instances, will subject us to certain tax liabilities.

Item 1B.    Unresolved Staff Comments.

        None.

Item 2.    Properties.

        We lease our headquarters at 2000 Ponce de Leon Blvd., Coral Gables, FL 33134. In 2016, we expect to relocate our headquarters to a larger facility in Coral Gables. If necessary, we may, from time to time, lease additional facilities for our activities. The current lease is on a month-to-month tenancy, which shall terminate upon our relocation. The lease for our new headquarters will commence upon our occupancy.

        WAPA is headquartered in San Juan, Puerto Rico in an owned 66,500 square foot building located in one of the most affluent areas in San Juan. The building houses our state-of-the-art technology, television studios, and administrative offices. All of WAPA's news and local programs are produced at our production facility, which consists of four television studios, including the largest television studio in the Caribbean, fully equipped control rooms, digital video, audio, editing, post editing, and graphic production suites, and a scenery shop which produces all scenery and props for the local productions.

        We also lease the land for our transmission towers in Cayey, Puerto Rico, Jayuya, Puerto Rico and Mircao, Puerto Rico pursuant to long-term lease facilities.

        We believe WAPA current facilities are adequate to meet our needs in the foreseeable future. If necessary, we may, from time to time, downsize current facilities or lease additional facilities for our activities. We own our property in San Juan, Puerto Rico.

        The following table sets forth our principal places of business at December 31, 2015:

Location	Description	Area (Square Feet)
Coral Gables, FL	Headquarters		5,243
San, Juan, Puerto Rico	Administrative Offices, TV Production		66,500

Item 3.    Legal Proceedings.

        From time to time, we or our subsidiaries may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and determination as to the amount of the accrual required for such contingencies is highly subjective and requires judgments about future events. An adverse result in these or other matters may arise from time to time that may harm our Business. Neither we nor any of our subsidiaries are presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us or our subsidiaries, which may materially affect us.

Item 4.    Mine Safety Disclosures.

        Not applicable.

50

PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

        Our Class A common stock is listed and traded on NASDAQ under the symbol "HMTV." There is no publicly traded market for our Class B common stock. At March 11, 2016, there were 15,635,655 shares of Class A common stock outstanding, and the closing sale price of our ordinary shares was $13.69. Also as of that date, we had approximately 17 and 4 ordinary shareholders of record of our Class A common stock and Class B common stock, respectively. This number does not include the stockholders for whom shares are held in a "nominee" or "street" name. We have not declared any dividends and we do not anticipate paying dividends on our Class A common stock or Class B common stock in the foreseeable future. Our Amended Term Loan Facility restricts our ability to declare dividends in certain situations.

Price Range of our Class A Common Stock

        The table below sets forth the intra-day high and low sales prices per share of our Class A common stock for the periods indicated as reported on NASDAQ:

	High		Low
Fiscal Year ended December 31, 2015
First Quarter	$	14.49	$	11.92
Second Quarter	$	13.25	$	11.69
Third Quarter	$	15.10	$	11.74
Fourth Quarter	$	15.19	$	12.86

	High		Low
Fiscal Year ended December 31, 2014
First Quarter	$	12.87	$	9.83
Second Quarter	$	14.36	$	10.87
Third Quarter	$	12.97	$	10.65
Fourth Quarter	$	13.69	$	10.51

Securities Authorized for Issuance under Equity Compensation Plans

        The following table sets forth information with respect to compensation plans under which our equity securities are authorized for issuance as of December 31, 2015:

Plan category	Number of securities to be issued upon exercise of outstanding options, Warrants and rights (a)		Weighted-average exercise price of outstanding options, Warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column(a)) (b)
Equity compensation plans approved by security holders		—	$	—		—
Equity compensation plans not approved by security holders		2,043,334	$	11.49		804,080
Total		2,043,334	$	11.49		804,080

51

        On April 9, 2013, our board of directors approved the adoption of the Hemisphere Media Group, Inc. 2013 Equity Incentive Plan (the "2013 Plan") pursuant to which incentive compensation and performance compensation awards may be provided to our employees, directors, officers, consultants or advisors or our subsidiaries or their respective affiliates. The 2013 Plan authorizes the issuance of up to 4 million shares of our Class A common stock. The number of securities remaining available for issuance in column (b) of the table above reflects our issuance of certain shares of restricted Class A common stock in connection with grants authorized by our board of directors. The description of the 2013 Plan above are qualified in their entirety by reference to the full text of the 2013 Plan.

Purchase of Equity Securities

        The following table sets information with respect to Warrants repurchased during the quarter ended December 31, 2015. The Warrants were repurchased from one holder in one privately negotiated transaction. None of the Warrants in this table were repurchased directly from any of our officers or directors. We made no other repurchase of Warrants for the year ended December 31, 2015.

Period	Total number of Warrants		Average price paid per Warrant		Total number of Warrants purchased as part of publicly announced plans or programs (a)		Maximum number (or approximate dollar value) of Warrants that may yet be purchased under the plans or programs (b)
October 1 - 31		—		—		—		—
November 1 - 30		—		—		—		—
December 1 - 31		1,337,008		1.33		—		—
Total		1,337,008	$	1.33		—		—

(a)(b) We did not authorize any public plan or program for the quarter or year ended December 31, 2015.

Performance Graph

        The following graph compares the performance of our Class A common stock with the performance of the S&P 500 and a peer group index of companies that we believe are closest to ours (the "Peer Group Index") by measuring the changes in our Class A common stock prices from April 5, 2013, through December 31, 2015. Because no published index of comparable media companies currently reports values on a dividends-reinvested basis, we have created a Peer Group Index for purposes of this graph in accordance with the requirements of the Commission. The Peer Group Index is made up of companies that engage in the broadcast and cable television programming as a significant element of their business, although not all of the companies included in the Peer Group Index participate in all of the lines of business in which we are engaged, and some of the companies included in the Peer Group Index also engage in lines of business in which we do not participate. Additionally, the market capitalizations of many of the companies included in the Peer Group Index are quite different from ours. The common stock of the following companies has been included in the Peer Group Index: AMC Networks Inc., Discovery Communications Inc., Entravision Communications Corporation, Scripps Networks Interactive, Inc. and Starz, LLC. The chart assumes $100 was invested on April 5, 2013 in each of our Class A common stock, S&P 500 and in a peer group weighted by market capitalization at the beginning of the period.

52

Hemisphere Stock Performance vs. Peer Index

Source: Capital IQ

Note: Peer Index includes; AMC Networks, Discovery Communications, Entravision Communications, Scripps Networks Interactive, and Starz

        This performance graph shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Exchange Act or Securities Act of 1933, as amended, if such subsequent filing specifically references this filing.

Recent Sales of Unregistered Securities

        None.

Item 6.    Selected Financial Data.

        The following table sets forth our selected historical consolidated financial information for the periods presented. The selected financial information for the fiscal years ended December 31, 2015, 2014 and 2013 have been derived from our audited consolidated financial statements and the selected financial data as of December 31, 2012 and 2011 and for each of the two fiscal years then ended, have been derived from WAPA Holdings' audited consolidated financial statements.

        The financial information indicated may not be indicative of future performance. This financial information and other data should be read in conjunction with our audited and unaudited consolidated

53

financial statements, including the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this Annual Report on Form 10-K.

	2015			2014			2013			2012			2011
Selected Statement of Operations Information: (amounts in thousands expect per share data)
Net revenues	$	129,790		$	111,989		$	86,005		$	71,367		$	60,797
Operating income		34,867			26,027			7,722			20,866			15,402
Income (loss) before income taxes		22,781			12,986			(1,167	)		17,315			11,588
Income tax expense		(9,042	)		(2,429	)		(3,130	)		(6,285	)		(3,984	)
Net income (loss)	$	13,739		$	10,557		$	(4,297	)	$	11,030		$	7,604
Basic net income (loss) per share	$	0.32		$	0.25		$	(0.14	)	$	11,030		$	7,604
Diluted net income (loss) per share	$	0.31		$	0.25		$	(0.14	)	$	11,030		$	7,604
Weighted average shares outstanding
Basic		42,840			42,321			31,143			1			1
Diluted		43,802			42,622			31,143			1			1
Selected Balance Sheet Information:
Cash	$	179,532		$	142,010		$	176,622		$	10,084		$	10,183
Goodwill		164,887			164,887			130,794			10,983			10,983
Other intangibles		78,185			91,611			34,610			1,678			1,908
Other assets		128,546			119,889			108,094			93,113			93,873
Total assets		551,150			518,397			450,120			115,858			116,947
Total liabilities		272,509			261,984			209,332			76,199			82,562
Total stockholders' equity		278,641			256,413			240,788			—			—
Total member's capital		—			—			—			39,659			34,385

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

        The following discussion and analysis summarizes our financial condition and operating performance and should be read in conjunction with our historical consolidated financial statements and notes thereto included above. Unless the context indicates otherwise, the terms the "Company," "Hemisphere," "we," "our" or "us" are used to refer to Hemisphere Media Group, Inc. and its consolidated subsidiaries.

        On April 4, 2013, we completed a series of mergers contemplated pursuant to the Agreement and Plan of Merger, dated as of January 22, 2013, which we refer to as the Transaction. The Transaction was accounted for by applying the acquisition method pursuant to ASC Topic 805-10, "Business Combinations—Overall." WAPA Holdings was the accounting acquirer and predecessor in the Transaction whose historical results became our historical results for all periods prior to April 4, 2013.

        On April 1, 2014, we closed on the Cable Networks Acquisition. Accordingly, the operating results of the Cable Networks Acquisition are included in our operating results as of the date of the acquisition.

        Significant components of management's discussion and analysis of results of operations and financial condition include:

•

Overview.  The overview section provides a summary of our business, operational divisions and business trends, outlook and strategy.

•

Consolidated Results of Operations.  The consolidated results of operations section provides an analysis of our results on a consolidated basis for the year ended December 31, 2015 compared

54

to the year ended December 31, 2014, and for the year ended December 31, 2014 compared to the year ended December 31, 2013.

•

Liquidity and Capital Resources.  The liquidity and capital resources section provides a discussion of our cash flows for the year ended December 31, 2015 compared to the year ended December 31, 2014, and for the year ended December 31, 2014 compared to the year ended December 31, 2013.

OVERVIEW

        We are the parent holding company of WAPA Holdings, Cinelatino and Azteca. While we were formed on January 16, 2013 for purposes of effecting the Transaction, the Transaction was consummated on April 4, 2013. Azteca, a special purpose acquisition vehicle, delivered approximately $70 million from a trust account raised in its 2011 initial public offering to us at the closing of the Transaction. After the consummation of the Transaction, Azteca engaged in no further operations and was subsequently dissolved on December 31, 2013.

        On April 1, 2014, we acquired the assets of the following three Spanish-language cable television networks: Pasiones, Centroamerica TV and Television Dominicana, which we refer to as the Acquired Cable Networks.

        We operate our business in one operating segment. We own and operate the following leading Spanish-language Networks and content platform:

•

Cinelatino:  the leading Spanish-language cable movie network with over 16 million subscribers across the U.S., Latin America and Canada. Cinelatino is programmed with a lineup featuring the best contemporary films and original television series from Mexico, Latin America, the U.S. and Spain. Driven by the strength of its programming and distribution, Cinelatino is the #1-rated Spanish-language cable movie network in the U.S. and the #2-rated Spanish-language cable television network in the U.S. overall;

•

WAPA:  the leading broadcast television network and television content producer in Puerto Rico. WAPA has been the #1-rated broadcast television network in Puerto Rico for the last seven years. WAPA is Puerto Rico's news leader and the largest local producer of entertainment programming, producing over 75 hours each week. Through its multicast signal, WAPA distributes WAPA2 Deportes, a leading sports television network in Puerto Rico, featuring MLB, NBA and professional sporting events from Puerto Rico. Additionally, we operate WAPA.TV, the leading broadband news and entertainment Web site in Puerto Rico featuring news and content produced by WAPA;

•

WAPA America:  a cable television network serving primarily Puerto Ricans and other Caribbean Hispanics in the United States. WAPA America's programming includes over 75 hours of news and entertainment programming produced by WAPA. WAPA America is distributed in the U.S. to over 5.0 million subscribers;

•

Pasiones:  a cable television network dedicated to showcasing the most popular telenovelas and serialized dramas, distributed in the U.S. and Latin America. Pasiones features the best novelas licensed from the most popular television networks. Pasiones has over 14 million subscribers across the U.S. and Latin America;

•

Centroamerica TV:  a cable television network targeting Central Americans, the third largest U.S. Hispanic group and the fastest growing segment of the U.S. Hispanic population. Centroamerica TV features the most popular news and entertainment from Central America, as well as soccer programming from the top professional soccer leagues in the region. Centroamerica TV is distributed in the U.S. to 4.0 million subscribers; and

55

•

Television Dominicana:  a cable television network targeting Dominicans living in the U.S. Television Dominicana features the most popular news and entertainment from the Dominican Republic, as well as the professional winter baseball league from the Dominican Republic. Television Dominicana is distributed in the U.S. to 3.0 million subscribers.

        Our two primary sources of revenue are advertising revenues and retransmission/subscriber fees. Advertising revenue is generated from the sale of advertising time. Our advertising revenue tends to reflect seasonal patterns of our advertisers' demand, which is generally greatest during the fourth quarter of each year, driven by the holiday buying season. In addition, Puerto Rico's political election cycle occurs every four years and we benefit from increased advertising sales in an election year. For example, in 2012, we experienced higher advertising sales as a result of political advertising spending during the 2012 governmental elections.

        Retransmission and subscriber fees are charged to distributors of our Networks, including cable, satellite and telecommunication service providers, pursuant to multi-year agreements. We believe our Networks are well positioned to continue further growth in our retransmission and subscriber fees, fueled by our Networks' strong ratings, continued growth in our target demographic audiences and robust content portfolio. We continually review the quality of our programming to ensure that it is maximizing our Networks' viewership and giving our Networks' subscribers a premium, high-value experience. The continued growth in our subscriber fees will, to a certain extent, be dependent on the growth in subscribers of the cable, satellite and telecommunication service providers distributing our Networks, and new system launches, particularly in Latin America.

        We generate over 90% of our net revenue from the United States. For the years ended December 31, 2015, 2014 and 2013, we generated $120.6 million, $103.7 million and $81.7 million, respectively, from the United States. For the years ended December 31, 2015, 2014 and 2013, we generated $9.2 million, $8.3 million and $4.1 million, respectively, from outside the United States.

        All of our Networks derive revenues from retransmission/subscriber fees and from advertising, including Cinelatino, which introduced advertising in July 2015.

        WAPA has been the #1-rated broadcast television network in Puerto Rico for the last seven years and management believes it is highly valued by its viewers and Distributors. WAPA is distributed by all pay-TV distributors in Puerto Rico and has been successfully growing retransmission fees. WAPA's primetime household rating in 2015 was nearly four times higher than the most highly rated English-language U.S. broadcast network in the U.S., CBS, and higher than the combined ratings of CBS, NBC, ABC, FOX and the CW. As a result of its ratings success in the last seven years, management believes WAPA is well positioned for future growth in retransmission fees, similar to the growth in retransmission fees that the four major U.S. networks have experienced in the U.S. (ABC, CBS, NBC and Fox).

        WAPA America, Cinelatino, Pasiones, Centroamerica TV and Television Dominicana occupy a valuable and unique position as they are among the few Hispanic cable networks to have achieved broad distribution in the U.S. As a result, management believes our U.S. networks are well-positioned to benefit from growth in both the growing national advertising spend targeted at the highly sought-after U.S. Hispanic cable television audience, and significant growth in subscribers, as the U.S. Hispanic population continues its long-term growth. Cinelatino and WAPA America are presently rated by Nielsen.

        Hispanics represent over 17% of the total U.S. population and approximately 10% of the total U.S. buying power, but only 7% of the aggregate media spend targets U.S. Hispanics. As a result, advertisers have been allocating a higher proportion of marketing dollars to the Hispanic market, but U.S. Hispanic cable advertising still under-indexes relative to its consumption. U.S. Hispanic cable network advertising revenue grew at a 13% CAGR from 2009 to 2015, more than doubling from

56

$204 million to $436 million. Going forward, U.S. Hispanic cable advertising is expected to continue to grow at a 13% CAGR from 2015 to 2019, outpacing forecasted growth for U.S. cable advertising, U.S. Hispanic broadcast advertising and U.S. general market broadcast advertising.

        Management expects our U.S. networks to benefit from significant growth in subscribers, as the U.S. Hispanic population continues its long-term growth. The U.S. Census Department estimated that over 55 million Hispanics resided in the United States in 2014, representing an increase of approximately 20 million people between 2000 and 2014, and that number is projected to grow to 70 million by 2025. Hispanic television households grew by 35% during the period from 2006 to 2016, from 11.2 million households to 15.1 million households. Similarly, Hispanic pay-TV subscribers increased 53% since 2006 to 12.1 million subscribers in 2016. The continued long-term growth of Hispanic television households and pay-TV subscribers creates a significant opportunity for WAPA America and Cinelatino.

        Similarly, management expects Cinelatino and Pasiones to benefit from significant growth in Latin America. Fueled by a sizeable and growing population, a strong macroeconomic backdrop and rising disposable incomes, as well as investments in network infrastructure resulting in improved service and performance, pay-TV subscribers in Latin America (excluding Brazil) grew by 32% from 2012 to 2015, and are projected to grow an additional 15 million from 51 million in 2015 to 66 million by 2020 representing projected growth of approximately 29%. Furthermore, Cinelatino and Pasiones are each presently distributed to only 23% and 20%, respectively, of total pay-TV subscribers throughout Latin America. Accordingly, growth through new system launches represents a significant growth opportunity. Management believes Cinelatino and Pasiones have widespread appeal throughout Latin America, and therefore will be able to expand distribution throughout the region.

        MVS, one of our stockholders, provides operational and technical services to Cinelatino pursuant to several agreements. Upon consummation of the Transaction, certain of the agreements were amended or terminated to what management believes to be to the benefit of Cinelatino. As consideration for the terminated agreement, we made a one-time payment of $3.8 million to MVS. An agreement which had granted MVS the exclusive right to distribute the service in the U.S. was terminated upon consummation of the Transaction. We have assumed responsibility for those activities previously provided by MVS, given the resources of WAPA that will be available to us, thus having no impact on Cinelatino's operations. A similar agreement which had granted MVS the exclusive right to distribute the service throughout Latin America was amended upon consummation of the Transaction so that MVS's rights would be on a non-exclusive basis, except for distribution agreements then in effect. Management believes that the amendment to this agreement will not impact Cinelatino's current distribution, and should enhance Cinelatino's ability to drive new distribution in Latin America. MVS has terminated this agreement effective February 29, 2016. Also upon consummation of the Transaction, Cinelatino's affiliation agreement with Dish Mexico (an affiliate of MVS), pursuant to which Dish Mexico distributes the network and Cinelatino receives revenue, was extended through August 1, 2017.

57

CONSOLIDATED RESULTS OF OPERATIONS

Comparison of Consolidated Operating Results for the Years Ended December 31, 2015 and December 31, 2014 (amounts in thousands)

	Years Ended December 31,
							$ Change Favorable/ (Unfavorable)			% Change Favorable/ (Unfavorable)
	2015			2014
Net revenues	$	129,790		$	111,989		$	17,801			15.9	%
Operating Expenses:
Cost of revenues		41,189			36,450			(4,739	)		(13.0	)%
Selling, general and administrative		36,037			31,608			(4,429	)		(14.0	)%
Depreciation and amortization		17,218			16,552			(666	)		(4.0	)%
Other expenses		446			1,282			836			65.2	%
Loss on disposition of assets		33			70			37			52.9	%
Total Operating Expenses		94,923			85,962			(8,961	)		(10.4	)%
Operating Income		34,867			26,027			8,840			34.0	%
Other Expenses:
Interest expense, net		(12,086	)		(11,925	)		(161	)		(1.4	)%
Loss on extinguishment of debt		—			(1,116	)		1,116			100.0	%
		(12,086	)		(13,041	)		955			7.3	%
Income before Income Taxes		22,781			12,986			9,795			75.4	%
Income tax expense		(9,042	)		(2,429	)		(6,613	)		NM
Net Income	$	13,739		$	10,557		$	3,182			30.1	%

NM = not meaningful

Net Revenues

        Net revenues for the year ended December 31, 2015 were $129.8 million, an increase of 16%, compared to net revenues of $112.0 million for the same period in 2014. This increase was primarily driven by growth in advertising revenues and higher subscriber and retransmission fees. The growth in revenue was also a result of the inclusion of the operating results of the Acquired Cable Networks for a full year, which were acquired on April 1, 2014.

Operating Expenses

        Cost of Revenues:    Cost of revenues consists primarily of programming and production costs, programming amortization and distribution costs. For the year ended December 31, 2015, cost of revenues increased $4.7 million, or 13%. This increase was due to the inclusion of the Acquired Cable Networks, which were not included in the prior year's first quarter, and increased investment in programming, consistent with our previously stated strategy.

        Selling, General and Administrative:    Selling, general and administrative expenses consist principally of promotion, marketing and research, stock-based compensation, employee costs, occupancy costs and other general administrative costs. For the year ended December 31, 2015, selling, general and administrative expenses increased $4.4 million, or 14%, due primarily to the inclusion of the operating results of the Acquired Cable Networks, which were not included in the prior year's first quarter. This increase was also driven by higher sales and marketing expenses as we launched advertising on

58

Cinelatino, as well as higher salaries, as we expand our infrastructure to support the growth of our business.

        Depreciation and Amortization:    Depreciation and amortization expense consists of depreciation of fixed assets and amortization of intangibles. For the year ended December 31, 2015, depreciation and amortization expense increased $0.7 million, or 4.0%, primarily due to an additional quarter of amortization of intangible assets related to the Acquired Cable Networks, which was not included in the prior year's first quarter, offset in part by the decline in amortization of intangible assets in the current year due to the expiration of the useful lives of certain intangibles.

        Other Expenses:    Other expenses include legal and financial advisory fees, and other fees incurred in connection with corporate finance activities, including debt and equity financings, and acquisition activities. For the year ended December 31, 2015, other expenses decreased $0.8 million, or 65%, due to higher costs incurred in connection with the Cable Networks Acquisition and refinancing of our Term Loan Facility in the prior year as compared to the fees incurred in connection with the secondary equity offering in the current year.

        Loss on Disposition of Assets:    Loss on disposition of assets reflects losses on disposal of equipment no longer used in our operations.

Other Expenses

        Other expenses consist primarily of interest expense. For the year ended December 31, 2015, other expenses decreased by $1.0 million, or 7%. The decrease was primarily due to the loss on extinguishment of debt incurred in the prior year in connection with the refinancing of our Term Loan Facility, offset in part by higher interest expense due to an increase in the average balance of our Term Loan Facility.

Income Tax Expense

        Income tax expense increased $6.6 million due to an increase in income before taxes of $9.8 million for the year ended December 31, 2015. The increase in income tax expense was also due to the reversal in the prior year's second quarter of a $2.5 million valuation allowance related to foreign tax credits. For more information, see Note 6, "Income Taxes" of Notes to our Consolidated Financial Statements included elsewhere in this Annual Report.

Net Income

        Net income increased $3.2 million for the year ended December 31, 2015.

59

CONSOLIDATED RESULTS OF OPERATIONS

Comparison of Consolidated Operating Results for the Years Ended December 31, 2014 and December 31, 2013

	Years Ended December 31,
							$ Change Favorable/ (Unfavorable)			% Change Favorable/ (Unfavorable)
	2014			2013
Net revenues	$	111,989		$	86,005		$	25,984			30.2	%
Operating Expenses:
Cost of revenues		36,450			33,950			(2,500	)		(7.4	)%
Selling, general and administrative		31,608			29,678			(1,930	)		(6.5	)%
Depreciation and amortization		16,552			8,762			(7,790	)		(88.9	)%
Other expenses		1,282			5,694			4,412			77.5	%
Loss on disposition of assets		70			199			129			NM
Total Operating Expenses		85,962			78,283			(7,679	)		(9.8	)%
Operating Income		26,027			7,722			18,305			237.0	%
Other Expenses:
Interest expense, net		(11,925	)		(7,240	)		(4,685	)		(64.7	)%
Loss on extinguishment of debt		(1,116	)		(1,649	)		533			32.3	%
		(13,041	)		(8,889	)		(4,152	)		(46.7	)%
Income (Loss) before Income Taxes		12,986			(1,167	)		14,153			1,212.8	%
Income tax expense		(2,429	)		(3,130	)		701			22.4	%
Net Income (Loss)	$	10,557		$	(4,297	)	$	14,854			345.7	%

Net Revenues

        Net revenue for the year ended December 31, 2014 was $112.0 million, an increase of 30%, compared to net revenue of $86.0 million for the same period in 2013. This increase is primarily a result of the inclusion of the operating results of the Acquired Cable Networks, which were acquired on April 1, 2014, and the inclusion in 2014 of a full year of results of Cinelatino, which was acquired in the Transaction on April 4, 2013. The growth in revenue was also driven by growth in subscriber and retransmission fees across all of our Networks.

Operating Expenses

        Cost of Revenues:    Cost of revenues consists primarily of programming and production costs, programming amortization and distribution costs. For the year ended December 31, 2014, cost of revenues increased $2.5 million, or 7%. This increase was due to the inclusion of the operating results of the Acquired Cable Networks and Cinelatino, offset in part by savings as a result of the decision not to produce Idol Puerto Rico in 2014.

        Selling, General and Administrative:    Selling, general and administrative expenses consist principally of promotion, marketing and research, stock-based compensation, employee costs, occupancy costs and other general administrative costs. For the year ended December 31, 2014, selling, general and administrative expenses increased $1.9 million, or 7%, due primarily to the inclusion of the operating results of the Acquired Cable Networks, as well as the inclusion of Cinelatino and corporate overhead and public company charges, which were not included in the prior year's first calendar quarter. This increase was offset in part by a $1.3 million decline in stock-based compensation expense, and a one-time $3.8 million charge incurred in 2013 in connection with the Transaction.

60

        Depreciation and Amortization:    Depreciation and amortization expense consists of depreciation of fixed assets and amortization of intangibles. For the year ended December 31, 2014, depreciation and amortization expense increased $7.8 million. The increase was due primarily to amortization of intangibles identified as a result of the Cable Networks Acquisition and the Transaction.

        Other Expenses:    Other expenses includes legal and financial advisory fees incurred in connection with the Cable Networks Acquisition and the Transaction, and financing costs incurred in connection with the refinancing of our Term Loan Facility. For the year ended December 31, 2014, other expenses decreased $4.4 million. The decrease was due to higher legal and financial advisory fees and expenses incurred in connection with the Transaction and Cable Networks Acquisition in 2013, as compared to costs incurred in connection with the Cable Networks Acquisition and refinancing of our Term Loan Facility in 2014.

        Loss on Disposition of Assets:    Loss on disposition of assets decreased $0.1 million during the year ended December 31, 2014 due to a decline in losses on disposal of equipment no longer used in our operations.

Other Expenses

        Other expenses consist primarily of interest expense. For the year ended December 31, 2014, other expenses increased by $4.2 million. The increase was due to a $4.7 million increase in interest expense as a result of increases in our Term Loan Facility to $175 million in July 2013 and to $225 million in July 2014. This increase was partially offset by a $0.5 million decline in loss on extinguishment of debt in connection with our Term Loan Facility.

Income Tax Expense

        Income tax expense decreased $0.7 million for the year ended December 31, 2014. The decrease was primarily due to the reversal in the second quarter of 2014 of the valuation allowance related to foreign tax credits recorded in the third quarter of 2013. For more information, see Note 6, "Income Taxes" of Notes to our Consolidated Financial Statements included elsewhere in this Annual Report.

Net Income (Loss)

        Net income increased $14.9 million for the year ended December 31, 2014.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Uses of Cash

        Our principal sources of cash are cash on hand, and cash flows from operating activities. As of December 31, 2015, the Company had $179.5 million of cash on hand. Our primary uses of cash include the production and acquisition of programming, operational costs, personnel costs, equipment purchases, interest payments on our outstanding debt and income tax payments and may be used to fund acquisitions.

        Management believes cash on hand and cash flow from operations will be sufficient to meet its current contractual financial obligations and to fund anticipated working capital and capital expenditure requirements for existing operations. Our current financial obligations include maturities of debt, operating lease obligations and other commitments from the ordinary course of business that require cash payments to vendors and suppliers.

61

Cash Flows

	Years Ended December 31,
	2015			2014			2013
Amounts in thousands
Cash provided by (used in):
Operating activities	$	42,192		$	23,274		$	6,993
Investing activities		(5,355	)		(104,852	)		(1,786	)
Financing activities		685			46,966			161,331
Net increase (decrease) in cash	$	37,522		$	(34,612	)	$	166,538

Comparison for the Year Ended December 31, 2015 and December 31, 2014

Operating Activities

        Cash provided by operating activities is primarily driven by our net income, adjusted for non-cash items and changes in working capital. Non-cash items consist primarily of depreciation of property and equipment, amortization of intangibles, programming amortization, amortization of deferred financing costs, stock-based compensation expense, deferred taxes and provision for bad debts.

        Net cash provided by operating activities for the year ended December 31, 2015 was $42.2 million as compared to $23.3 million in the same period in 2014, due primarily to a $3.2 million increase in net income, a $0.5 million increase in non-cash items and a $15.3 million increase in net working capital. Non-cash items increased primarily as a result of a $1.3 million increase in programming amortization, a $0.7 million increase in depreciation and amortization expense, and a $0.5 million increase in the provision for bad debt, offset in part by a $1.1 million decrease in loss on extinguishment of debt and a $0.3 million decline in stock-based compensation.

Investing Activities

        Net cash used in investing activities for the year ended December 31, 2015 was $5.4 million, as compared to net use of cash of $104.9 million in the same period in 2014. The decline in cash used by investing activities is primarily due to the Cable Networks Acquisition in 2014, which was funded with $101.9 million from cash on our balance sheet, offset in part by an increase in capital expenditures of $2.4 million.

Financing Activities

        For the year ended December 31, 2015, cash provided by financing activities was $0.7 million, as compared to $47.0 million in the same period in 2014. This decrease is primarily due to the $47.9 million of net proceeds from the refinancing of our Term Loan Facility on July 31, 2014, principal debt payments made during 2015 of $2.3 million and repurchases of warrants in 2015 of $1.8 million, offset in part by net proceeds from the secondary equity offering in May 2015 of $5.4 million and net proceeds from the exercise of warrants and stock options of $0.2 million. For more information, see Note 7, "Long-Term Debt" of Notes to the Consolidated Financial Statements, included in this Annual Report on Form 10-K.

Comparison for the Year Ended December 31, 2014 and December 31, 2013

Operating Activities

        Cash provided by operating activities is primarily driven by our net income (loss), adjusted for non-cash items and changes in working capital. Non-cash items consist primarily of depreciation of

62

property and equipment, amortization of intangibles, programming amortization, amortization of deferred financing costs, stock-based compensation expense, deferred taxes and provision for bad debts.

        Net cash provided by operating activities for the year ended December 31, 2014 was $23.3 million as compared to $7.0 million in the same period in 2013, due to a $14.9 million increase in net income, and $3.6 million increase in non-cash items, offset in part by a $2.1 million increase in net working capital. Non-cash items increased primarily as a result of a $7.8 million increase in amortization of intangibles as a result of the Transaction and Cable Networks Acquisition, and a $1.0 million increase in programming amortization, offset in part by a $3.8 million decrease in deferred taxes, a $1.3 million decrease in stock-based compensation, a $0.5 million decrease in loss on early extinguishment of debt, and a $0.3 million increase in bad debt expense.

Investing Activities

        Net cash used in investing activities for the year ended December 31, 2014 was $104.9 million, as compared to net use of cash of $1.8 million in the same period in 2013. The increase in cash used was due primarily to the Cable Networks Acquisition, which was funded with $101.9 million from cash on our balance sheet.

Financing Activities

        For the year ended December 31, 2014, cash provided by financing activities was $47.0 million, as compared to $161.3 million in the same period in 2013. This decrease was due to $82.4 million of cash proceeds from the Transaction and $79.8 million of net cash proceeds from our Term Loan Facility in the prior year period, offset by $47.9 million of net proceeds from the refinancing of our Term Loan Facility in 2014. For more information, see Note 7, "Long-Term Debt" of Notes to the Consolidated Financial Statements, included in this Annual Report on Form 10-K.

Discussion of Indebtedness

        On July 30, 2013, certain of our subsidiaries (the "Borrowers") entered into a credit agreement providing for a $175.0 million senior secured term loan B facility, which we refer to as the Term Loan Facility, which matures on July 30, 2020. On July 31, 2014, certain of our subsidiaries amended the Term Loan Facility, which we refer to as the Amended Term Loan Facility, and which provides for an aggregate principal amount of $225.0 million and matures on July 30, 2020. The Amended Term Loan Facility also provides an uncommitted accordion option (the "Incremental Facility") allowing for additional borrowings under the Term Loan Facility up to an aggregate principal amount equal to (i) $40.0 million plus (ii) an additional amount of up to 4.0x first lien net leverage. Additionally, the Amended Term Loan Facility provides for an uncommitted incremental revolving loan option in an aggregate principal amount of up to $20.0 million, which shall be secured on a pari passu basis by the collateral securing the Amended Term Loan Facility. The Amended Term Loan Facility is secured by a first-priority perfected security interest in substantially all of our assets.

        The Amended Term Loan Facility bears interest at the Borrowers' option of either (i) LIBOR plus a margin of 4.00% (subject to a LIBOR floor of 1.00%) or (ii) or an Alternate Base Rate ("ABR") plus a margin of 3.00% (subject to an ABR floor of 2.00%) and was issued with 0.5% of original issue discount. The Amended Term Loan Facility requires the Borrowers to make amortization payments (in quarterly installments) equal to 1.00% per annum with respect to the Amended Term Loan Facility with any remaining amount due at final maturity. Voluntary prepayments are permitted, in whole or in part, subject to certain minimum prepayment requirements; provided that any prepayments made, prior to the date that is twelve months from the closing of the Term Loan Facility, for the purpose of repricing or effectively repricing the Amended Term Loan Facility includes a 1.00% prepayment premium.

63

        The obligations under the Amended Term Loan Facility are guaranteed by HMTV, LLC, and all of Hemisphere Media Holdings, LLC's ("Holdings") existing and future direct and indirect domestic subsidiaries (subject to certain exceptions in the case of immaterial subsidiaries). The Amended Term Loan Facility is secured by a first-priority perfected security interest in substantially all of the assets of HMTV, Holdings and its restricted subsidiaries.

        The Amended Term Loan Facility does not have any financial covenants other than (i) a Total Net Leverage Ratio of 6 to 1, determined on a pro forma basis after giving aggregate effect to any Incremental Facility, new term loans or new incremental notes that would apply and (ii) a First Lien Net Leverage Ratio (as defined in the credit agreement) of 4.00:1.00, determined on a pro forma basis after giving aggregate effect to any Incremental Facility, new term loans or new incremental notes.

        The lenders have the ability, subject to certain rights of the Borrowers to cure periods, to accelerate loan payment dates and charge default interest rates for certain breaches by the Borrowers of their covenants and other obligations under the Amended Term Loan Facility.

        In July 2014, we recorded a $1.1 million loss on the early extinguishment of debt; $0.7 million related to deferred costs and $0.4 million related to Original Issue Discount. Additionally, we incurred $1.0 million of deferred financing costs related to the Amended Term Loan Facility. See Note 7 to the accompanying consolidated financial statements included in Item 15, "Exhibits, Financial Statements and Schedules" in this Annual Report on Form 10-K.

        In addition, pursuant to the terms of the Amended Term Loan Facility, the earlier of the delivery of the financial statements for each fiscal year and 90 days after the end of each fiscal year (commencing with the fiscal year ending December 31, 2015), the Borrowers are required to make a prepayment of the loan principal in an amount equal to 50% of the excess cash flow of the most recently completed fiscal year. Excess cash flow is generally defined as net income plus depreciation and amortization expense, less mandatory prepayments of the term loan, interest charges, income taxes and capital expenditures, and adjusted for the change in working capital. The percentage of the excess cash flow used to determine the amount of the prepayment of the loan declines from 50% to 25% and again to 0% at lower leverage ratios.

        The excess cash flow as defined in the Term Loan Facility will require a payment of approximately $8.3 million, which will be paid upon filing of this Form 10-K in March 2016. As permitted under the Term Loan Facility, the excess cash flow payment will be allocated at our election and in direct order of maturity. Accordingly, we will not be required to make the scheduled quarterly loan amortization payments for several quarters. As a result, the excess cash flow payment represents the current portion of long-term debt shown on the balance sheet as of December 31, 2015.

        As of December 31, 2015, we have made principal payments of $2.3 million on all existing indebtedness throughout the year.

        The foregoing description is not complete and is qualified in its entirety by reference to the full text of the Credit Agreement and Guaranty Agreement, each filed as exhibits to this Annual Report on Form 10-K.

64

Contractual Obligations

        Our contractual obligations as of December 31, 2015 are as follows (amounts in thousands):

	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		After 5 Years
Long-term debt obligations, including current portion(1)	$	221,625	$	8,278	$	—	$	213,347	$	—
Operating lease obligations		2,552		296		771		641		844
Interest(2)		48,963		10,771		21,335		16,857		—
Other commitments(3)		14,958		7,093		5,974		1,881		10
Total	$	288,098	$	26,438	$	28,080	$	232,726	$	854

(1)

Excludes interest, original issue discount related to debt and any future excess cash payments.

(2)

While variable interest debt, forecasted interest obligation calculated using the current rate of interest at December 31, 2015.

(3)

Includes programming commitments which are not yet available and are not included on the balance sheet.

        Additionally, at December 31, 2015, our proportionate share of the projected benefit obligation of the Newspaper Guild International Pension Plan (the "Plan") exceeded plan assets by $2.9 million as the Plan is unfunded. Estimates of our future obligation are primarily dependent on future interest rates, future regulatory law changes and future collective bargaining agreements covering the Plan participants.

OFF-BALANCE SHEET ARRANGEMENTS

        We do not have any off-balance sheet financing arrangements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        Our consolidated financial statements are prepared in accordance with GAAP, which requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements included in the Annual Report on Form 10-K and accompanying notes. Management considers an accounting policy to be critical if it is important to our financial condition and results of operations, and if it requires significant judgment and estimates on the part of management in its application. The development and selection of these critical accounting policies have been determined by management and the related disclosures have been reviewed with the Audit Committee of our Board of Directors. We consider policies relating to the following matters to be critical accounting policies:

•

Revenue recognition

•

Valuation of goodwill and intangible assets

•

Amortization and impairment of programming rights

•

Income taxes

•

Equity-based compensation

        For an in-depth discussion of each of our significant accounting policies, including our critical accounting policies and further information regarding the estimates and assumptions involved in their

65

application, see Note 1 to the accompanying consolidated financial statements included in Item 15, "Exhibits, Financial Statements and Schedules" in this Annual Report on Form 10-K.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

Interest Rate Risk

        We finance our capital needs through our Amended Term Loan Facility at our indirect wholly-owned subsidiary, Hemisphere Media Holdings, LLC.

        The variable-rate of interest on the Amended Term Loan Facility exposes us to market risk for changes in interest rates. Loans thereunder bear interest at rates that vary with changes in prevailing market rates. With respect to the Amended Term Loan Facility, we do not speculate on the future direction of interest rates. As of December 31, 2015, our exposure to changing market rates with respect to the Amended Term Loan Facility was as follows:

Dollars in millions	December 31, 2015
Variable rate debt	$	221.6
Interest rate		5.00	%

        As of December 31, 2015 total outstanding balance on the Amended Term Loan Facility was approximately $221.6 million. In the event of an increase in the interest rate of 100 basis points, assuming a principal of $221.6 million, we would incur an increase in interest expense of approximately $2.2 million per year. Such potential increases or decreases are based on certain simplifying assumptions, including a constant level of debt, no interest rate swap or hedge in place, and an immediate, across-the-board increase or decrease in the level of interest rates with no other subsequent changes for one year.

Foreign Currency Exchange Risk

        Although we currently conduct business in various countries outside the United States, we are not subject to any material currency risk because our cash flows are collected primarily in U.S. Dollars. Reported earnings and assets may be reduced in periods in which the U.S. dollar increases in value relative to those currencies.

        Our objective in managing exposure to foreign currency fluctuations is to reduce volatility of earnings and cash flow. Accordingly, we may enter into foreign currency derivative instruments that change in value as foreign exchange rates change, such as foreign currency forward contracts or foreign currency options. Any gains and losses on the fair value of derivative contracts would be largely offset by gains and losses on the underlying assets being hedged. We held no foreign currency derivative financial instruments at December 31, 2015.

Item 8.    Financial Statements and Supplementary Data.

        The response to this item is provided in this Annual Report on Form 10-K under Item 15 Exhibits, Financial Statements and Schedules and is incorporated herein by reference.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A.    Controls and Procedures.

Disclosure Controls and Procedures

66

        Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated our disclosure controls and procedures, as of December 31, 2015. Our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2015, our disclosure controls and procedures were effective to ensure that all information required to be disclosed is recorded, processed, summarized and reported within the time periods specified, and that information required to be filed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, to allow timely decisions regarding required disclosure.

        Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error and mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of controls.

        The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or because the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Changes in Internal Controls

        No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal year ended December 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Management's Annual Report on Internal Control Over Financial Reporting

        Management's report on internal control over financial reporting is set forth in our Consolidated Financial Statements included on page F-2 under the caption "Management's Report on Internal Control over Financial Reporting," which is incorporated herein by reference.

Attestation Report of the Independent Registered Public Accounting Firm

        The effectiveness of the our internal control over financial reporting, has been audited by RSM US LLP, an independent registered public accounting firm, as stated in their report, which is included in our Consolidated Financial Statements on page F-3 under the caption "Report of Independent Registered Public Accounting Firm," which is incorporated herein by reference.

Item 9B.    Other Information.

        None.

67

PART III

Item 10.    Directors, Executive Officers and Corporate Governance.

Item 11.    Executive Compensation.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13.    Certain Relationships and Related Transactions, and Director Independence.

Item 14.    Principal Accounting Fees and Services.

        The information required by Items 10, 11, 12, 13 and 14 will be furnished (and are hereby incorporated by reference) by an amendment hereto or pursuant to a definitive proxy statement pursuant to Regulation 14A that will contain such information. Notwithstanding the foregoing, information appearing in the section "Audit Committee Report" shall not be deemed to be incorporated by reference in this report.

68

PART IV

Item 15.    Exhibits, Financial Statements and Schedules.

(a)

List of Documents Filed as part of this Form 10-K

1)

Financial Statements

        See Index to Consolidated Financial Statements on Page F-1 following this Part IV.

2)

Financial Statement Schedules

        No schedules are required because either the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.

(b)

List of Exhibits.    The following is a list of exhibits filed, furnished or incorporated by reference as a part of this Annual Report on Form 10-K.

Exhibit No.		Description of Exhibits
	2.1	Merger Agreement, dated as of January 22, 2013, by and among Azteca Acquisition Corporation, the Company, InterMedia Español Holdings, LLC, Cine Latino, Inc., Hemisphere Merger Sub I, LLC, Hemisphere Merger Sub II, Inc. and Hemisphere Merger Sub III, Inc. (incorporated herein by reference to Exhibit 2.1 to the Company's Registration Statement on Form S-4 filed with the Commission on January 25, 2013 (File No. 333-186210)).
	2.2	Asset Purchase Agreement, dated as of January 22, 2014, by and among Hemisphere Media Holdings, LLC, Media World, LLC and the other parties named therein. (incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Commission on January 23, 2014 (File No. 001-35886)).
	3.1	Amended and Restated Certificate of Incorporation of Hemisphere Media Group, Inc. (incorporated herein by reference to Exhibit 3.3 to Amendment No. 2 to the Company's Registration Statement on Form S-4 filed with the Commission on March 11, 2013 (File No. 333-186210)).
	3.2	Amended and Restated Bylaws of Hemisphere Media Group, Inc. (incorporated herein by reference to Exhibit 3.4 to Amendment No. 2 to the Company's Registration Statement on Form S-4 filed with the Commission on March 11, 2013 (File No. 333-186210)).
	4.1	Specimen Hemisphere Class A common stock Certificate (incorporated herein by reference to Exhibit 4.1 to Amendment No. 2 to the Company's Registration Statement on Form S-4 filed with the Commission on March 11, 2013 (File No. 333-186210)).
	4.2	Specimen Hemisphere Class B common stock Certificate (incorporated herein by reference to Exhibit 4.2 to Amendment No. 2 to the Company's Registration Statement on Form S-4 filed with the Commission on March 11, 2013 (File No. 333-186210)).
	4.3	Specimen Warrant Certificate (incorporated herein by reference to Exhibit 3.3 to Amendment No. 2 to the Company's Registration Statement on Form S-4 filed with the Commission on March 11, 2013 (File No. 333-186210)).

69

Exhibit No.		Description of Exhibits
	4.4	Equity Restructuring and Warrant Purchase Agreement, dated as of January 22, 2013, by and among Azteca Acquisition Corporation, the Company, Azteca Acquisition Holdings, LLC, Brener International Group, LLC, InterMedia Partners VII, L.P., InterMedia Cine Latino, LLC, Cinema Aeropuerto, S.A. de C.V. and the other parties identified therein (incorporated herein by reference to Exhibit 4.4 to the Company's Registration Statement on Form S-4 filed with the Commission on January 25, 2013 (File No. 333-186210)).
	4.5	Lock-Up Agreement, dated as of January 22, 2013, by and among InterMedia Español Holdings, LLC, Cine Latino, Inc. and the parties identified as "IM Investor", "Cine Investors" and "Azteca Investors" therein (incorporated herein by reference to Exhibit 4.5 to Amendment No. 2 to the Company's Registration Statement on Form S-4 filed with the Commission on March 11, 2013 (File No. 333-186210)).
	4.6	Warrant Agreement, dated June 29, 2011, by and between Azteca Acquisition Corporation and Continental Stock Transfer & Trust Company (incorporated herein by reference to Exhibit 4.1 to Azteca Acquisition Corporations' Current Report on Form 8-K filed with the Commission on July 6, 2011 (File No. 000-54443).
	4.7	Assignment, Assumption and Amendment of Warrant Agreement, dated as of April 4, 2013, by and among Azteca Acquisition Corporation, the Company and Continental Stock Transfer & Trust Company (incorporated herein by reference to Exhibit 4.6 to the Company's Registration Statement on Form 8-A filed with the Commission on April 4, 2013 (File No. 000-54925)).
	4.8	Hemisphere Media Group, Inc. 2013 Equity Incentive Plan (incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement on Form S-8 filed with the Commission on April 10, 2013 (File No. 333-187846)).
	9.1	Support Agreement, dated January 22, 2013, by and among Azteca Acquisition Corporation, Hemisphere Media Group, Inc., certain of the initial stockholders of Azteca Acquisition Corporation, and the other parties identified therein (incorporated herein by reference to Exhibit 10.1 to Azteca Acquisition Corporation's Current Report on Form 8-K filed with the Commission on January 23, 2013).
	10.1	Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.1 to Amendment No. 3 to the Company's Registration Statement on Form S-4 filed with the Commission on March 15, 2013 (File No. 333-186210)).
	10.2	Registration Rights Agreement by and among the Company and the parties identified therein, dated January 22, 2013 (incorporated herein by reference to Exhibit 10.2 to Amendment No. 2 to the Company's Registration Statement on Form S-4 filed with the Commission on March 11, 2013 (File No. 333-186210)).
	10.3	Joinder and Waiver to Registration Rights Agreement, by and among the Company and the parties identified as Transferees and Investors therein, dated April 2, 2015 (incorporated herein by reference to Exhibit 4.10 to the Company's Registration Statement on Form S-3 filed with the Commission on April 2, 2015 (File No. 333-203223)).

70

Exhibit No.			Description of Exhibits
	10.4		Credit Agreement, dated as of July 30, 2013, by and among Hemisphere Media Holdings, LLC, a Delaware limited liability company, InterMedia Español, Inc., a Delaware corporation, the lenders party thereto from time to time, Deutsche Bank Securities Inc. as joint lead arranger and lead bookrunner, GE Capital Markets, Inc., as joint lead arranger, Deutsche Bank AG New York Branch, as administrative agent and collateral agent, General Electric Capital Corporation, as syndication agent, and the other parties named therein (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on July 31, 2013 (File No. 001-35886)).
	10.5		Amendment No. 1 to the Credit Agreement, dated as of July 31, 2014, by and among Hemisphere Media Holdings, LLC, a Delaware limited liability company, InterMedia Español, Inc., a Delaware corporation, the lenders party thereto from time to time, JPMorgan Chase Bank, N.A., as successor administrative agent and collateral agent, J.P. Morgan Securities LLC as joint lead arranger and joint bookrunner, Deutsche Bank Securities Inc., as joint lead arranger, joint bookrunner and syndication agent and CIT Capital Securities LLC as documentation agent, and the other parties named therein (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed with the Commission on July 31, 2014 (File No. 001-35886)).
	10.6		Guaranty Agreement, dated as of July 30, 2013, by and among HMTV, LLC, a Delaware limited liability company, Hemisphere Media Holdings, LLC, a Delaware limited liability company, InterMedia Español, Inc., a Delaware corporation, the subsidiary guarantors from time to time party thereto and Deutsche Bank AG New York Branch as administrative agent (incorporated herein by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on July 31, 2013 (File No. 001-35886)).
	10.7	†	Form of Nonqualified Stock Option Award Agreement (incorporated herein by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 14, 2013 (File No. 001-35886)).
	10.8	†	Form of Restricted Stock Award Agreement (incorporated herein by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 14, 2013 (File No. 001-35886)).
	10.9	†	Employment Agreement, dated April 9, 2013, by and between the Company and Mr. Alan J. Sokol (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on April 15, 2013 (File No. 000-54925)).
	10.10	†	Employment Agreement, dated April 9, 2013, by and between the Company and Mr. Craig D. Fischer (incorporated herein by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K filed with the Commission on April 15, 2013 (File No. 000-54925)).
	10.11	†	Consulting Agreement, dated June 20, 2013, by and between the Company and James M. McNamara (incorporated herein by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 14, 2013 (File No. 001-35886)).

71

Exhibit No.			Description of Exhibits
	10.12	†	Employment Agreement, dated May 6, 2013, by and between the Company and Alex J. Tolston (incorporated herein by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K filed with the Commission on March 28, 2014 (File No. 001-35886)).
	10.13	†	Employment Agreement, dated September 30, 2013, by and among the Company, Televicentro of Puerto Rico, LLC and Jose E. Ramos (incorporated herein by reference to Exhibit 10.10 to the Company's Annual Report on Form 10-K filed with the Commission on March 28, 2014 (File No. 001-35886)).
	10.14	†	Employment Agreement, dated May 5, 2014, by and between the Company and Leonardo Guevara (incorporated herein by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K filed with the Commission on March 31, 2015 (File No. 001-35886)).
	10.15	†	Employment Agreement, dated June 16, 2014, by and between the Company and Karen A. Maloney (incorporated herein by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K filed with the Commission on March 31, 2015 (File No. 001-35886)).
	10.16	*†	Employment Agreement, dated August 7, 2015, by and between the Company and Vicky Bathija.
	10.17	*†	Offer Letter, dated December 1, 2015, by and between the Company and Lucia Ballas-Traynor.
	21.1	*	Subsidiaries of the Company.
	23.1	*	Consent of RSM US LLP, independent accountants for the Company.
	31.1	*	Certification of CEO Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	*	Certification of CFO Pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	**‡	Certification of CEO Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32.2	**‡	Certification of CFO Pursuant to 18 U.S.C Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	101.INS	*	XBRL Instance Document.
	101.SCH	*	XBRL Taxonomy Extension Schema.
	101.CAL	*	XBRL Taxonomy Extension Calculation Linkbase.
	101.LAB	*	XBRL Taxonomy Extension Label Linkbase.
	101.PRE	*	XBRL Taxonomy Extension Presentation Linkbase.
	101.DEF	*	XBRL Taxonomy Definition Linkbase.

*

Filed herewith

**

Furnished herewith

‡

A signed original of the written statement required by Section 906 has been provided to the Company and will be retained by the Company and forwarded to the SEC or its staff upon request.

†

Indicates management contract or compensatory plan, contract or arrangement.

72

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	HEMISPHERE MEDIA GROUP, INC. (Registrant)
Dated: March 14, 2016	By:	/s/ ALAN J. SOKOL Alan J. Sokol Chief Executive Officer and President (Principal Executive Officer)

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ PETER M. KERN Peter M. Kern	Chairman of the Board and Director	March 14, 2016
/s/ ALAN J. SOKOL Alan J. Sokol	Chief Executive Officer and President (Principal Executive Officer) and Director	March 14, 2016
/s/ CRAIG D. FISCHER Craig D. Fischer	Chief Financial Officer (Principal Financial and Accounting Officer)	March 14, 2016
/s/ LEO HINDERY, JR. Leo Hindery, Jr.	Director	March 14, 2016
/s/ JAMES M. MCNAMARA James M. McNamara	Director	March 14, 2016
/s/ ERNESTO VARGAS GUAJARDO Ernesto Vargas Guajardo	Director	March 14, 2016
/s/ GABRIEL BRENER Gabriel Brener	Director	March 14, 2016

73

Signature	Title	Date
/s/ ERIC C. NEUMAN Eric C. Neuman	Director	March 14, 2016
/s/ VINCENT L. SADUSKY Vincent L. Sadusky	Director	March 14, 2016
/s/ JOHN ENGELMAN John Engelman	Director	March 14, 2016

74

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
Management's Report on Internal Control Over Financial Reporting	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Financial Statements of Hemisphere Media Group, Inc.:
Consolidated Balance Sheets as of December 31, 2015 and 2014	F-5
Consolidated Statements of Operations for the Years Ended December 31, 2015, 2014 and 2013	F-6
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2015, 2014 and 2013	F-7
Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2015, 2014 and 2013	F-8
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013	F-9
Notes to Consolidated Financial Statements	F-10

F-1

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

        Hemisphere's management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in Rule 13a-15(f) and Rule 15d-15(f) of the Securities Exchange Act of 1934, as amended, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's internal control over financial reporting includes those policies and procedures that:

1.

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;



2.

provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and the directors of the Company; and



3.

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        As required by Section 404 of the Sarbanes Oxley Act of 2002, management assessed the effectiveness of Hemisphere Media Group, Inc. and subsidiaries' (the "Company") internal control over financial reporting as of December 31, 2015. Management's assessment is based on the criteria for effective control over financial reporting described in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in 2013. Based upon our assessment and those criteria, management determined that Company's internal control over financial reporting was effective as of December 31, 2015.

        The effectiveness of the our internal control over financial reporting has been audited by RSM US LLP, an independent registered public accounting firm, as stated in their report, which is included in our Consolidated Financial Statements on page F-3 under the caption "Report of Independent Registered Public Accounting Firm."

Date: March 14, 2016

BY:

/s/ ALAN J. SOKOL
Alan J. Sokol
President and Chief Executive Officer /s/ CRAIG D. FISCHER
Craig D. Fischer
Chief Financial Officer

F-2

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders
Hemisphere Media Group, Inc.

        We have audited the accompanying consolidated balance sheets of Hemisphere Media Group, Inc. and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income (loss), changes in stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2015. We also have audited Hemisphere Media Group Inc.'s and subsidiaries internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Hemisphere Media Group Inc.'s and subsidiaries management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these financial statements and an opinion on the Company's internal control over financial reporting based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

        A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Hemisphere Media Group Inc. and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, Hemisphere Media Group, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial

F-3

reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

/s/ RSM US LLP

West Palm Beach, Florida
March 14, 2016

F-4

Hemisphere Media Group, Inc.

Consolidated Balance Sheets

As of December 31, 2015 and 2014

(amounts in thousands, except share and par value amounts)

	2015			2014
Assets
Current Assets
Cash	$	179,532		$	142,010
Accounts receivable, net of allowance for doubtful accounts of $1,512 and $1,073, respectively		25,519			24,763
Due from related parties		1,722			1,334
Programming rights		5,552			5,441
Deferred taxes		—			4,222
Prepaid taxes and other current assets		4,541			8,071
Total current assets		216,866			185,841
Programming rights		7,457			6,652
Property and equipment, net		25,397			23,867
Deferred financing costs, net		2,254			2,758
Broadcast license		41,356			41,356
Goodwill		164,887			164,887
Other intangibles, net		78,185			91,611
Deferred taxes		13,280			—
Other assets		1,468			1,425
Total Assets	$	551,150		$	518,397
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable		2,463			2,176
Due to related parties		1,182			787
Accrued agency commissions		8,168			6,642
Accrued compensation and benefits		3,995			3,391
Accrued marketing		6,569			5,581
Taxes payable		902			927
Other accrued expenses		3,867			2,049
Programming rights payable		4,426			4,228
Current portion of long-term debt		8,278			2,250
Total current liabilities		39,850			28,031
Programming rights payable		365			111
Long-term debt, net of current portion		211,645			219,541
Deferred taxes		17,928			11,670
Defined benefit pension obligation		2,721			2,631
Total Liabilities		272,509			261,984
Stockholders' Equity
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2015 and December 31, 2014		—			—
Class A common stock, $.0001 par value; 100,000,000 shares authorized; 15,342,440 and 14,518,734 shares issued and outstanding at December 31, 2015 and 2014, respectively		1			1
Class B common stock, $.0001 par value; 33,000,000 shares authorized; 30,027,148 issued and outstanding at December 31, 2015 and 2014		3			3
Additional paid-in capital		256,551			246,858
Treasury stock, at cost 236,171 at December 31, 2015 and 146,703 at December 31, 2014		(3,144	)		(1,961	)
Retained earnings		25,837			12,098
Accumulated comprehensive loss		(607	)		(586	)
Total Stockholders' Equity		278,641			256,413
Total Liabilities and Stockholders' Equity	$	551,150		$	518,397

See accompanying notes to consolidated financial statements.

F-5

Hemisphere Media Group, Inc.

Consolidated Statements of Operations

Years Ended December 31, 2015, 2014 and 2013

(amounts in thousands, except per share amounts)

	2015			2014			2013
Net revenues	$	129,790		$	111,989		$	86,005
Operating Expenses:
Cost of revenues		41,189			36,450			33,950
Selling, general and administrative		36,037			31,608			29,678
Depreciation and amortization		17,218			16,552			8,762
Other expenses		446			1,282			5,694
Loss on disposition of assets		33			70			199
Total operating expenses		94,923			85,962			78,283
Operating income		34,867			26,027			7,722
Other Expenses:
Interest expense, net		(12,086	)		(11,925	)		(7,240	)
Loss on extinguishment of debt		—			(1,116	)		(1,649	)
		(12,086	)		(13,041	)		(8,889	)
Income (loss) before income taxes		22,781			12,986			(1,167	)
Income tax expense		(9,042	)		(2,429	)		(3,130	)
Net income (loss)	$	13,739		$	10,557		$	(4,297	)
Earnings (loss) per share:
Basic	$	0.32		$	0.25		$	(0.14	)
Diluted	$	0.31		$	0.25		$	(0.14	)
Weighted average shares outstanding:
Basic		42,840			42,321			31,143
Diluted		43,802			42,622			31,143

See accompanying notes to consolidated financial statements.

F-6

Hemisphere Media Group, Inc.

Consolidated Statements of Comprehensive Income (Loss)

Years Ended December 31, 2015, 2014 and 2013

(amounts in thousands)

	2015			2014		2013
Net income (loss)	$	13,739		$	10,557	$	(4,297	)
Other comprehensive income (loss):
Net unrealized gain on interest rate swap agreement		—			—		38
Adjustment to defined benefit plan, net of tax		(21	)		50		130
Other, net of tax		—			—		(17	)
Comprehensive income (loss)	$	13,718		$	10,607	$	(4,146	)

See accompanying notes to consolidated financial statements.

F-7

Hemisphere Media Group, Inc.

Consolidated Statements of Changes in Stockholders' Equity

Years Ended December 31, 2015, 2014 and 2013

(amounts in thousands)

	Class A Common Stock				Class B Common Stock
										Additional Paid In Capital			Class A Treasury Stock			Retained Earnings			Accumulated Comprehensive (Loss) Income
	Shares		Par Value		Shares			Par Value														Total
Balance at December 31, 2012		—	$	—		—		$	—	$	34,608		$	—		$	5,838		$	(787	)	$	39,659
Consummation of the Transaction (April 4, 2013)		10,991		1		33,000			3		198,992			—			—			—			198,996
Net loss		—		—		—			—		—			—			(4,297	)		—			(4,297	)
Issuance of restricted stock		250		—		—			—		2,102			—			—			—			2,102
Excess tax benefits related to the issuance of restricted stock		—		—		—			—		25			—			—			—			25
Stock-based compensation		—		—		—			—		5,090			—			—			—			5,090
Repurchases of Class A Common Stock		—		—		—			—		—			(938	)		—			—			(938	)
Other comprehensive income, net of tax		—		—		—			—		—			—			—			151			151
Balance at December 31, 2013		11,241		1		33,000			3		240,817			(938	)		1,541			(636	)		240,788
Net income		—		—		—			—					—			10,557			—			10,557
Issuance of restricted stock		305		—		—			—		2,908			—			—			—			2,908
Excess tax benefits related to the issuance of restricted stock		—		—		—			—		120			—			—			—			120
Stock-based compensation		—		—		—			—		3,012			—			—			—			3,012
Repurchases of Class A Common Stock		—		—		—			—		—			(1,023	)		—			—			(1,023	)
Exercise of warrants		—		—		—			—		1			—			—			—			1
Conversion of Class B Common Stock to
Class A Common Stock		2,973		—		(2,973	)		—		—			—			—			—			—
Other comprehensive loss, net of tax		—		—		—			—		—			—			—			50			50
Balance at December 31, 2014		14,519		1		30,027			3		246,858			(1,961	)		12,098			(586	)		256,413
Net income		—		—		—			—		—			—			13,739			—			13,739
Issuance of restricted stock		324		—		—			—		2,522			—			—			—			2,522
Excess tax benefits related to the issuance of restricted stock		—		—		—			—		272			—			—			—			272
Stock-based compensation		—		—		—			—		3,053			—			—			—			3,053
Repurchase of Class A Common Stock		—		—		—			—		—			(1,183	)		—			—			(1,183	)
Issuance of Class A Common Stock		479		—		—			—		5,407			—			—			—			5,407
Repurchase of warrants		—		—		—			—		(1,778	)		—			—			—			(1,778	)
Exercise of warrants		5		—		—			—		60			—			—			—			60
Exercise of stock options		15		—		—			—		157			—			—			—			157
Other comprehensive loss, net of tax		—		—		—			—		—			—			—			(21	)		(21	)
Balance at December 31, 2015		15,342	$	1		30,027		$	3	$	256,551		$	(3,144	)	$	25,837		$	(607	)	$	278,641

See accompanying notes to consolidated financial statements.

F-8

Hemisphere Media Group, Inc.

Consolidated Statements of Cash Flows

Years Ended December 31, 2015, 2014 and 2013

(amounts in thousands)

	2015			2014			2013
Cash Flows From Operating Activities:
Net income (loss)	$	13,739		$	10,557		$	(4,297	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		17,218			16,552			8,762
Program amortization		11,703			10,370			9,322
Amortization of deferred financing costs		504			507			604
Amortization of original issue discount		382			310			106
Stock-based compensation		5,575			5,920			7,192
Provision for bad debts		920			462			165
Loss on disposition of assets		33			70			199
Loss on early extinguishment of debt		—			1,116			1,649
Deferred tax expense		(2,838	)		(2,264	)		1,029
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		(1,676	)		(7,430	)		(1,030	)
Programming rights		(12,619	)		(9,715	)		(10,543	)
Due from related parties		(388	)		(1,398	)		—
Prepaid expenses and other current assets		3,487			(4,397	)		(2,966	)
Increase (decrease) in:
Accounts payable		287			610			563
Due to related parties		395			49			(1,005	)
Accrued expenses		4,936			3,400			(3,943	)
Programming rights payable		452			(1,418	)		789
Income tax payable		(25	)		(120	)		(49	)
Other liabilities		107			93			446
Net cash provided by operating activities		42,192			23,274			6,993
Cash Flows From Investing Activities:
Acquisition of cable networks		—			(101,891	)		—
Proceeds from sale of assets		3			10			16
Capital expenditures		(5,358	)		(2,971	)		(1,802	)
Net cash used in investing activities		(5,355	)		(104,852	)		(1,786	)
Cash Flows From Financing Activities:
Transaction proceeds, net		—			—			82,437
Proceeds from long-term debt		—			70,565			173,250
Repayments of long-term debt		(2,250	)		(21,941	)		(89,984	)
Financing fees		—			(756	)		(3,459	)
Proceeds from issuance of stock		5,407			—			—
Repurchase of warrants		(1,778	)		—			—
Exercise of warrants		60			1			—
Purchase of treasury stock		(1,183	)		(1,023	)		(938	)
Exercise of stock options		157			—			—
Excess tax benefits		272			120			25
Net cash provided by financing activities		685			46,966			161,331
Net increase (decrease) in cash		37,522			(34,612	)		166,538
Cash:
Beginning		142,010			176,622			10,084
Ending	$	179,532		$	142,010		$	176,622
Supplemental Disclosures of Cash Flow Information:
Cash payments for:
Interest	$	11,305		$	11,171		$	5,419
Income taxes	$	5,812		$	4,438		$	4,034

See accompanying notes to consolidated financial statements.

F-9

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Significant Accounting Policies

        Nature of business:    The accompanying Consolidated Financial Statements include the accounts of Hemisphere Media Group, Inc. ("Hemisphere" or the "Company"), the parent holding company of Cine Latino, Inc. ("Cinelatino"), WAPA Holdings, LLC (formerly known as InterMedia Español Holdings, LLC) ("WAPA Holdings"), and HMTV Cable, Inc., the parent company of the entities for the acquired networks consisting of Pasiones, TV Dominicana, and Centroamerica TV (see below). Hemisphere was formed on January 16, 2013 for purposes of effecting the transaction, (see Note 2), which was consummated on April 4, 2013. In these notes, the terms "Company," "we," "us" or "our" mean Hemisphere and all subsidiaries included in our Consolidated Financial Statements.

        On April 1, 2014, we acquired the assets of three Spanish-language cable television networks from Media World, LLC, a Florida limited liability company ("Seller"), for $101.9 million in cash. The three acquired cable networks include Pasiones, Centroamerica TV and TV Dominicana. For more information, see Note 2.

        Reclassification:    Certain prior year amounts on the presented consolidated balance sheet have been reclassified to conform with current year presentation with no effect on net income, total assets, total liabilities or stockholders' equity.

        Principles of consolidation:    The consolidated financial statements include our accounts and the accounts of our subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

        Basis of presentation:    The accompanying consolidated financial statements for us and our subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

        Operating segments:    The Company determines its operating segments based upon (i) financial information reviewed by the chief operating decision maker, the Chief Executive Officer, (ii) internal management and related reporting structure and (iii) the basis upon which the chief operating decision maker makes resource allocation decisions. We have one operating segment, Hemisphere.

        Net earnings (loss) per common share:    Basic earnings (loss) per share ("EPS") are computed by dividing income (loss) attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive.

F-10

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 1. Nature of Business and Significant Accounting Policies (Continued)

        The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS (amounts in thousands, except per share amounts):

	Years Ended December 31
	2015		2014		2013
Numerator for earnings (loss) per common share calculation:
Net income (loss)	$	13,739	$	10,557	$	(4,297	)
Denominator for earnings (loss) per common share calculation:
Weighted-average common shares, basic		42,840		42,321		31,143
Effect of dilutive securities
Stock options, restricted stock and warrants		962		301		—
Weighted-average common shares, diluted		43,802		42,622		31,143
EPS
Basic	$	0.32	$	0.25	$	(0.14	)
Diluted	$	0.31	$	0.25	$	(0.14	)

        We apply the treasury stock method to measure the dilutive effect of its outstanding warrants, stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income (loss) per common share calculation. Potentially dilutive securities representing 1.0 million, 1.1 million and 0.6 million shares of common stock for the years ended December 31, 2015, 2014 and 2013, respectively, were excluded from the computation of diluted income (loss) per common share for this period because their effect would have been anti-dilutive. The net income (loss) per share amounts are the same for our Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.

        In computing earnings per share, the Company's Nonvoting Stock is considered a participating security. Each share of Nonvoting Stock has identical rights, powers, limitations and restrictions in all respects as each share of common of the Company, including the right to receive the same consideration per share payable in respect of each share of common stock, except that holders of Nonvoting Stock shall have no voting rights or powers whatsoever.

        Revenue recognition:    Revenue related to the sale of advertising and contracted time is recognized at the time of broadcast. Retransmission consent fees and subscriber fees received from cable, telecommunications and satellite operators are recognized in the period in which the services are performed, generally pursuant to multi-year carriage agreements based on the number of subscribers.

        Barter transactions:    The Company engages in barter transactions in which advertising time is exchanged for products or services. Barter transactions are accounted for at the estimated fair value of the products or services received, or advertising time given up, whichever is more clearly determinable. Barter revenue is recognized at the time the advertising is broadcast. Barter expense is recorded at the time the merchandise or services are used and/or received.

F-11

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 1. Nature of Business and Significant Accounting Policies (Continued)

        Barter revenue and expense included in the consolidated statements of operations are as follows (amounts in thousands):

	2015			2014			2013
Barter revenue	$	811		$	1,311		$	1,448
Barter expense		(791	)		(1,075	)		(1,360	)
	$	20		$	236		$	88

        Programming costs:    Programming costs are recorded in cost of revenues based on the Company's contractual agreements with various third party programming Distributors which are generally multi-year agreements.

        Stock-based compensation:    We have given equity incentives to certain employees. We account for such equity incentives in accordance with Accounting Standards Codification ("ASC") 718 "Stock Compensation," which requires us to measure compensation cost for equity settled awards at fair value on the date of grant and recognize compensation cost in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. Compensation cost is determined by using either the Monte Carlo simulation model or the Black-Scholes option pricing model.

        Advertising and marketing costs:    The Company expenses advertising and marketing costs as incurred. The Company incurred advertising and marketing costs of $3.5 million, $2.4 million and $1.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

        Cash:    The Company maintains its cash in bank deposit accounts which, at times, may exceed federally-insured limits. The Company has not experienced any losses in such accounts.

        Accounts receivable:    Accounts receivable are carried at the original charge amount less an estimate made for doubtful receivables based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer's financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as income when received. The Company considers an account receivable to be past due if any portion of the receivable balance is outstanding for more than 90 days. Changes in the allowance for doubtful accounts for the years ended December 31, 2015, 2014 and 2013 consisted of the following (amounts in thousands):

Year	Description	Beginning of Year		Additions		Write-offs		Recoveries		End of Year
2015	Allowance for doubtful accounts	$	1,073	$	920	$	482	$	1	$	1,512
2014	Allowance for doubtful accounts		651		462		45		5		1,073
2013	Allowance for doubtful accounts		180		519		51		3		651

        Programming rights:    We enter into multi-year license agreements with various programming Distributors for distribution of their respective programming ("programming rights") and capitalize amounts paid to secure or extend these programming rights at the lower of unamortized cost or

F-12

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 1. Nature of Business and Significant Accounting Policies (Continued)

estimated net realizable value. If management estimates that the unamortized cost of programming rights exceeds the estimated net realizable value, an adjustment is recorded to reduce the carrying value of the programming rights. No such write-down was deemed necessary during the years ended December 31, 2015, 2014 and 2013. Programming rights are amortized over the term of the related license agreements or the number of exhibitions, whichever occurs first. The amortization of these rights, which was $11.7 million, $10.4 million and $9.3 million for the years ended December 31, 2015, 2014 and 2013, respectively, is recorded as part of cost of revenues in the accompanying consolidated statements of operations. Accumulated amortization of the programming rights was $19.7 million and $16.2 million at December 31, 2015 and 2014, respectively. Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast subsequently are considered noncurrent. Program obligations are classified as current or noncurrent in accordance with the payment terms of the license agreement.

        Property and equipment:    Property and equipment are recorded at cost. Depreciation is determined using the straight-line method over the expected remaining useful lives of the respective assets. Useful lives range from 1 - 40 years for improvements, equipment, buildings and towers. Upon retirement or other disposition, the cost and related accumulated depreciation of the assets are removed from the accounts and the resulting gain or loss is reflected in the determination of net income or loss. Expenditures for maintenance and repairs are expensed as incurred. Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

        Goodwill and other intangibles:    The Company's goodwill is recorded as a result of the Company's business combinations using the acquisition method of accounting. Indefinite lived intangible assets include a broadcast license, trademark and tradenames. Other intangible assets include customer relationships, non-compete agreement and affiliate agreements with an estimated useful life of one to ten years. Other intangible assets are amortized over their estimated lives using the straight-line method. Costs incurred to renew or extend the term of recognized intangible assets are capitalized and amortized over the useful life of the asset.

        The Company tests its broadcast license annually for impairment or whenever events or changes in circumstances indicate that such assets might be impaired. The impairment test consists of a comparison of the fair value of these assets with their carrying amounts using a discounted cash flow valuation method, assuming a hypothetical start-up scenario.

        The Company tests its trademarks and tradenames annually for impairment or whenever events or changes in circumstances indicate that such assets might be impaired. The test consists of a comparison of the fair value of these assets with the carrying amounts utilizing an income approach in the form of the royalty relief method, which measure the cost savings that a business enjoys since it does not have to pay a royalty rate for the use of a particular domain name and brand.

        The Company tests its goodwill annually for impairment or whenever events or changes in circumstances indicate that goodwill might be impaired. The first step of the goodwill impairment test compares the fair value of each reporting unit with its carrying amount, including goodwill. The fair value of the reporting units are determined through the use of a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates.

F-13

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 1. Nature of Business and Significant Accounting Policies (Continued)

        The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company and prevailing values in the broadcast and cable markets. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of that goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss shall be recognized in an amount equal to that excess.

        The Company tests its other finite lived intangible asset annually for impairment or whenever events or changes in circumstances indicate that such asset or asset group might be impaired. This analysis is performed by comparing the respective carrying value of the asset group to the current and expected future cash flows, on an undiscounted basis, to be generated from such asset group. If such analysis indicates that the carrying value of this asset group is not recoverable, the carrying value of such asset group is reduced to fair value.

        Deferred financing costs:    Deferred financing costs are recorded net of accumulated amortization. Amortization is calculated on the effective-interest method over the term of the applicable loan. Amortization of deferred financing costs was $0.5 million, $0.5 million and $0.6 million, which is included in interest expense, net in the accompanying consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, respectively. Accumulated amortization of deferred financing costs was $1.0 million and $0.5 million at December 31, 2015 and 2014, respectively.

        Income taxes:    Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

        We record foreign withholding tax, which is withheld by foreign customers from their remittances to us, on a gross basis as a component of income taxes and separate from revenue in the consolidated statement of operations.

        We follow the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods. To the extent that interest and penalties are assessed by taxing authorities on any underpayment of income taxes, such amounts are accrued and classified as a component of income tax expense.

F-14

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 1. Nature of Business and Significant Accounting Policies (Continued)

        Fair value of financial instruments:    The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The carrying value of the long-term debt approximates fair value because this instrument bears interest at a variable rate, is pre-payable, and is at terms currently available to the Company.

        Generally accepted accounting principles establish a framework for measuring fair value and expanded disclosures about fair value measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories:

Level 1—inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.

Level 2—inputs to the valuation methodology include quoted prices in markets that are not active or quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—inputs to the valuation methodology are unobservable, reflecting the entity's own assumptions about assumptions market participants would use in pricing the asset or liability.

        The categorization of an asset or liability within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

        The Company's programming rights and goodwill are classified as Level 3 in the fair value hierarchy, as they are measured at fair value on a non-recurring basis and are adjusted to fair value only when the carrying values exceed their fair values. For the years ended December 31, 2015, 2014 and 2013 there were no adjustments to fair value.

        The Company's variable-rate debt is classified as Level 2 in the fair value hierarchy, as its estimated fair value is derived from quoted market prices by independent dealers. The carrying value of the long-term debt approximates fair value at December 31, 2015 and 2014.

        Major customers and suppliers:    One of our Distributors accounted for more than 10% of our total net revenues for the year ended December 31, 2015. There were no other Distributors or other customers that accounted for more than 10% of revenue in any year. Our Networks are provided to these Distributors pursuant to affiliation agreements with varying terms.

        Recent accounting pronouncements:    In May 2014, the Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue, and by reducing the number of standards to which an entity has to refer. In July 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The updated accounting guidance provides companies with alternative methods of adoption. We are currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial statements and our method of adoption.

F-15

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 1. Nature of Business and Significant Accounting Policies (Continued)

        FASB has issued Accounting Standards Update ("ASU") 2015-15 Interest-Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This ASU adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issue Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. In April 2015, the FASB issued update, ASU 2015-03 Interest—Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We will adopt the guidance in the first quarter of 2016, with the impact to our consolidated statement of position to be a reduction in assets where deferred costs are currently disclosed, and a reduction to long-term debt where these costs will be recorded after the transition.

        On November 20, 2015, FASB issued ASU 2015-17- Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The ASU simplifies the presentation of deferred income taxes, requiring that deferred income tax liabilities and assets be classified as non-current in the statement of financial position. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively or retrospectively to all periods presented. In the period of the change, the entity should disclose the nature of and reason for the change in accounting principle and the quantitative information about the effects of the accounting change on prior periods. We have early adopted this guidance in the fourth quarter 2015. Prior periods have not been restated. See Note. 6 Income Taxes.

        In January 2016, the FASB issued ASU 2016-01—Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other provisions, the new guidance requires the fair value measurement of investments in certain equity securities. For investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices minus impairment. All changes in measurement will be recognized in net income. The guidance will be effective for the first interim period of our 2019 fiscal year. Early adoption is not permitted, except for certain provisions relating to financial liabilities. We are currently evaluating the impact of the new standard.

        Use of estimates:    In preparing these consolidated financial statements, management had to make estimates and assumptions that affected the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the balance sheets date, and the reported revenues and expenses for the years then ended. Such estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. However, actual results could differ from those estimates.

F-16

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 2. Business Combination

        On April 1, 2014, we closed on the acquisition of the net assets of the Spanish-language television network business of the Seller (the "Cable Networks Acquisition"), which is comprised of Pasiones, Centroamerica TV and TV Dominicana, which we refer to as the Acquired Cable Networks. The Acquired Cable Networks are highly complementary to our existing television networks, and build on our commitment to provide unique programming focused on the U.S. Hispanic market. The purchase price for the Cable Networks Acquisition and certain agreements entered into with the Seller contemporaneously with the business combination was $101.9 million, and was funded with cash on hand. The Cable Networks Acquisition was accounted for by applying the acquisition method, which requires the determination of the fair value of the consideration transferred, the fair value of the assets and liabilities of the acquiree, and the measurement of goodwill pursuant to ASC Topic 805-10, "Business Combinations-Overall". Costs incurred in connection with the Cable Networks Acquisition are included in other expenses and totaled $1.2 million, of which $0.9 million was recorded in the fourth quarter of 2013, with the balance recorded in 2014.

        The following table summarizes the estimated fair values of the assets acquired, liabilities assumed and resulting goodwill in the Cable Networks Acquisition (amounts in thousands):

Other assets	$	177
Intangible asset—affiliate agreements		46,014
Intangible asset—brands		15,986
Intangible asset—advertiser relationships		3,310
Intangible assets—other		648
Other liabilities		(2,123	)
Fair value of identifiable net assets acquired		64,012
Goodwill		34,093
Total	$	98,105

        In addition to the above identifiable assets, the estimated fair values of a non-compete agreement entered into with the Seller and a consulting agreement with certain Seller executives are $3.3 million and $0.5 million, respectively, which are accounted for separately from the Cable Networks Acquisition. We finalized the accounting for the Cable Networks Acquisition in the second quarter of 2014.

        The estimated fair value of the affiliate agreements of $46.0 million was determined using a discounted cash flow method utilizing an 8.5% discount rate. This intangible asset will be amortized on a straight-line basis over eight years. The estimated fair value of the television network brands of $16.0 million was determined using a discounted cash flow method based on a royalty rate of 5% and utilizing an 8.5% discount rate. This intangible asset was determined to be indefinite-lived given the strong association of the brand with the content appearing on the networks and their respective target audiences. The estimated fair values of the advertiser relationships and non-compete agreement of $3.3 million each were determined using a discounted cash flow method utilizing an 8.5% discount rate and will be amortized on a straight-line basis over six years. All other intangibles of $1.1 million will be amortized over a period of one year or less.

        Goodwill of $34.1 million is the excess of the net consideration transferred over the fair value of the identifiable net assets acquired, and primarily represents the benefits we expect to realize from the

F-17

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 2. Business Combination (Continued)

Cable Networks Acquisition and the synergistic opportunities with our existing networks. The goodwill associated with the transaction is deductible for tax purposes.

Note 3. Related Party Transactions

        The Company has various agreements MVS Multivision Digital S. de R.L. de C.V. and its affiliates (collectively "MVS"), a Mexican media and television conglomerate, which have directors and stockholders in common with the Company as follows:

•

An agreement through August 1, 2017 pursuant to which MVS provides Cinelatino with satellite and support services including origination, uplinking and satellite delivery of two feeds of Cinelatino's channel (for U.S. and Latin America), master control and monitoring, dubbing, subtitling and close captioning, and other support services (the "Satellite and Support Services Agreement"). This agreement was amended on May 20, 2015, to expand the services MVS provides to Cinelatino to include commercial insertion and editing services to support advertising sales on Cinelatino's U.S. feed. Total expenses incurred were $2.3 million, $2.1 million and $1.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, and are included in cost of revenues.

•

A ten-year master license agreement through July 2017, which grants MVS the non-exclusive right (except with respect to pre-existing distribution arrangements between MVS and third party distributors that are effective at the time of the consummation of the Transaction) to duplicate, distribute and exhibit Cinelatino's service via cable, satellite or by any other means in Latin America and in Mexico to the extent that Mexico distribution is not owned by MVS. Pursuant to the agreement, Cinelatino receives revenue net of MVS's distribution fees, which is presently equal to 13.5% of all license fees collected from distributors in Latin America and Mexico. Total revenues recognized were $5.1 million, $4.2 million and $2.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. MVS has terminated the agreement effective February 29, 2016.

•

An affiliation agreement through August 1, 2017 for the distribution and exhibition of Cinelatino's programming service through Dish Mexico (dba Commercializadora de Frecuencias Satelitales, S de R.L. de C.V.), an MVS affiliate that transmits television programming services throughout Mexico. Total revenues recognized were $2.0 million, $1.9 million and $1.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

•

An affiliation agreement, effective July 2015 through January 2018 for the distribution and exhibition of Pasiones' Latin American programming service through Dish Mexico (dba Comercializadora de Frecuencias Satelitales, S de R.L. de C.V.), an MVS affiliate that transmits television programming services throughout Mexico. Total revenues recognized were $0 for the year ended December 31, 2015.

•

In November 2015, we licensed programming from MVS. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.0 million for the year ended December 31, 2015. At December 31, 2015 $0.0 million is included in programming rights related to this agreement.

•

In November 2013, we licensed six movies from MVS. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.0 million for the years ended December 31,

F-18

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 3. Related Party Transactions (Continued)

2015, 2014, and 2013. At December 31, 2015 and 2014, $0.1 million is included in programming rights related to this agreement.

        Amounts due from MVS pursuant to the agreements noted above, amounted to $1.7 million and $1.3 million at December 31, 2015 and 2014, respectively, and are remitted monthly. Amounts due to MVS pursuant to the agreements noted above amounted to $1.1 million and $0.7 million at December 31, 2015 and 2014, respectively, and are remitted monthly.

        We entered into a three-year consulting agreement effective April 9, 2013 with James M. McNamara, a member of the Company's board of directors, to provide the development, production and maintenance of programming, affiliate relations, identification and negotiation of carriage opportunities, and the development, identification and negotiation of new business initiatives including sponsorship, new channels, direct-to-consumer programs and other interactive initiatives. Total expenses incurred under these agreements are included in selling, general and administrative expenses and amounted to $0.2 million for each of the years ended December 31, 2015, 2014 and 2013. Amounts due this related party totaled $0 and $0.1 million at December 31, 2015 and 2014, respectively.

        We have entered into programming agreements with Panamax Films, LLC ("Panamax"), an entity owned by James M. McNamara for the licensing of three specific movie titles. Expenses incurred under this agreement are included in cost of revenues in the accompanying consolidated statements of operations, and amounted to $0.0 million for each of the years ended December 31, 2015, 2014 and 2013. At December 31, 2015 and 2014, $0.1 million and $0.2 million, respectively, is included in other assets in the accompanying consolidated balance sheets as prepaid programming related to these agreements.

        During 2013, we engaged Pantelion to assist in the licensing of a feature film in the United States. Pantelion is a joint venture made up of several organizations, including Panamax Films, LLC ("Panamax"), Lions Gate Films Inc. ("Lions Gate") and Grupo Televisa. Panamax is owned by James McNamara, who is also the Chairman of Pantelion. We agreed to pay to Pantelion, in connection with their services, up to 12.5% of all "licensing revenues". Total licensing revenues are included in net revenues in the accompanying consolidated statements of operations and amounted to $0.0 million for the years ended December 31, 2015, 2014 and 2013. Total expenses incurred are included in cost of revenues in the accompanying consolidated statements of operations and amounted to $0.0 million for each of the years ended December 31, 2015 and 2014, and $0.3 million for the year ended December 31, 2013. Amounts due Pantelion at December 31, 2015 and 2014 totaled $0. In October 2015, Pantelion purchased advertising time on one of our channels, which amounted to $0.0 million, net of commission.

        Effective February 1, 2015, we entered into a licensing agreement to license the rights to fourteen (14) motion pictures from Lions Gate for a total license fee of $0.8 million. Some of the fourteen titles are owned by Pantelion, for which Lions Gate acts as Pantelion's exclusive licensing agent. Fees paid by Cinelatino to Lions Gate may be remunerated to Pantelion in accordance with their financial arrangements. Expenses incurred under this agreement are included in cost of revenues in the accompanying consolidated statements of operations, and amounted to $0.2 million for the year ended December 31, 2015. At December 31, 2015, $0.2 million is included in programming rights in the accompanying consolidated balance sheets related to this agreement.

F-19

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 3. Related Party Transactions (Continued)

        We entered into a services agreement with InterMedia Advisors, LLC ("IMA") which has officers, directors and stockholders in common with the Company for services including, without limitation, office space and operational support pursuant to a reimbursement agreement with IMA's affiliate, InterMedia Partners VII, L.P. Amounts due to this related party amounted to $0.0 million at December 31, 2015 and 2014. Amounts receivable from the related party and amounts due to the related party are included in selling, general and administrative expenses, netted to $0.0 million for each of the years ended December 31, 2015, 2014 and 2013.

Note 4. Property and Equipment

        Property and equipment at December 31, 2015 and 2014 consists of the following (amounts in thousands):

	2015			2014
Land and improvements	$	8,724		$	8,724
Building		9,399			7,066
Equipment		24,312			23,270
Towers		5,484			5,433
		47,919			44,493
Less: accumulated depreciation		(26,103	)		(22,969	)
		21,816			21,524
Equipment installations in progress		3,581			2,343
	$	25,397		$	23,867

        Depreciation expense was $3.7 million, $3.8 million and $3.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Note 5. Goodwill and Intangible Assets

        Goodwill and intangible assets consist of the following at December 31, 2015 and 2014 (amounts in thousands):

	December 31,
	2015		2014
Broadcast license	$	41,356	$	41,356
Goodwill		164,887		164,887
Other intangibles		78,185		91,611
Total intangible assets	$	284,428	$	297,854

F-20

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 5. Goodwill and Intangible Assets (Continued)

        A summary of changes in the Company's goodwill and other indefinite lived intangible assets, on a net basis, for the years ended December 31, 2015 and 2014 is as follows (amounts in thousands):

	Net Balance at December 31, 2014		Additions		Impairment		Net Balance at December 31, 2015
Broadcast license	$	41,356	$	—	$	—	$	41,356
Goodwill		164,887		—		—		164,887
Brands		15,986		—		—		15,986
Other intangibles		700		—		—		700
Total indefinite-lived intangibles	$	222,929	$	—	$	—	$	222,929

	Net Balance at December 31, 2013		Additions		Impairment		Net Balance at December 31, 2014
Broadcast licenses	$	41,356	$	—	$	—	$	41,356
Goodwill		130,794		34,093		—		164,887
Brands		—		15,986		—		15,986
Other intangibles		700		—		—		700
Total indefinite-lived intangible	$	172,850	$	50,079	$	—	$	222,929

        A summary of the changes in the Company's other amortizable intangible assets for the years ended December 31, 2015 and 2014 is as follows (amounts in thousands):

	Net Balance at December 31, 2014		Additions		Amortization			Net Balance at December 31, 2015
Affiliate relationships	$	69,064	$	—	$	(12,298	)	$	56,766
Advertiser relationships		2,896		—		(552	)		2,344
Non-compete agreement		2,882		—		(549	)		2,333
Other intangibles		83		65		(92	)		56
Total Finite-lived intangibles	$	74,925	$	65	$	(13,491	)	$	61,499

	Net Balance at December 31, 2013		Additions		Amortization			Net Balance at December 31, 2014
Affiliate relationships	$	33,910	$	46,014	$	(10,860	)	$	69,064
Advertiser relationships		—		3,310		(414	)		2,896
Non-compete agreement		—		3,294		(412	)		2,882
Other intangibles		—		1,140		(1,057	)		83
Total finite-lived intangibles	$	33,910	$	53,758	$	(12,743	)	$	74,925

        The aggregate amortization expense of the Company's amortizable intangible assets was $13.5 million, $12.7 million and $5.0 million for the years ended December 31, 2015, 2014 and 2013.

F-21

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 5. Goodwill and Intangible Assets (Continued)

The weighted average remaining amortization period is 5.1 years at December 31, 2015. Future estimated amortization expense is as follows (amounts in thousands):

Year Ending December 31,	Amount
2016	$	13,421
2017		13,248
2018		13,182
2019		8,432
2020 and thereafter		13,216
	$	61,499

Note 6. Income Taxes

        For the years ended December 31, 2015, 2014 and 2013, Income before provision for income taxes, includes the following components (amounts in thousands):

	2015		2014		2013
Domestic income	$	9,663	$	6,764	$	(1,301	)
Foreign income		13,118		6,222		134
	$	22,781	$	12,986	$	(1,167	)

        For the years ended December 31, 2015, 2014 and 2013, income tax expense is composed of the following (amounts in thousands):

	2015			2014			2013
Current income tax expense	$	11,880		$	4,693		$	2,101
Deferred income tax (benefit) expense		(2,838	)		(2,264	)		1,029
	$	9,042		$	2,429		$	3,130

        Current tax expense for the years ended December 31, 2015, 2014 and 2013 includes $1.5 million, $1.1 million and $0.6 million of foreign withholding tax, respectively.

F-22

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 6. Income Taxes (Continued)

        For the years ended December 31, 2015, 2014 and 2013 the Company's income tax expense and effective tax rates were as follows:

	2015			2014			2013
Pre-tax book income—US Only		35.0	%		35.0	%		34.0	%
Pre-tax book income—PR Only		20.2	%		16.9	%		–3.9	%
Permanent items		4.0	%		3.2	%		–164.6	%
Return to provision true-ups—Current/Deferred		–1.4	%		–3.8	%		27.9	%
Foreign rate differential		2.2	%		3.4	%		–7.4	%
Foreign tax credits		–24.5	%		–31.1	%		90.2	%
Current/Deferred—rate difference		0.0	%		0.0	%		0.9	%
Change in valuation allowance		0.0	%		–19.6	%		–212.6	%
Foreign withholding taxes		6.7	%		8.9	%		0.0	%
Deferred foreign tax credit offset		–2.2	%		4.0	%		–20.4	%
State taxes and state rate change		–0.3	%		1.9	%		146.9	%
Federal rate change		0.0	%		0.0	%		–152.8	%
		39.7	%		18.8	%		–261.8	%

        For the year ended December 31, 2015, the items that significantly affect the differences between the tax provision calculated at the statutory federal income tax rate and the actual tax benefit recorded relate to increases in taxes in Puerto Rico and foreign withholding taxes that will generate offsetting U.S. foreign tax credits.

        For the year ended December 31, 2014, the items that significantly affect the differences between the tax provision calculated at the statutory federal income tax rate and the actual tax benefit recorded relate to increases in taxes in Puerto Rico that will generate offsetting U.S. foreign tax credits and the reduction of the valuation allowance.

        For the year ended December 31, 2013, the items that significantly affect the differences between the tax provision calculated at the statutory federal income tax rate and the actual tax benefit recorded relate to permanent differences related to non-deductible expenses in conjunction with the Transaction, increases in taxes in Puerto Rico that will not generate offsetting U.S. foreign tax credits and the change in the valuation allowance.

        The Company may be audited by federal, state and local tax authorities, and from time to time these audits could result in proposed assessments. The Company has open tax years from 2012 forward for federal and state tax purposes. During 2015, the Company received a notice that the Hemisphere Media Group, Inc., 2013 tax return was selected for examination by the IRS. As of the date of filing, the examination has not commenced.

        Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities calculated for financial reporting purposes and the amounts calculated for preparing its income tax returns in accordance with tax regulations and the net tax effects of

F-23

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 6. Income Taxes (Continued)

operating loss and tax credits carried forward. Net deferred tax liabilities consist of the following components as of December 31, 2015 and 2014 (amounts in thousands):

	2015			2014
Deferred tax assets:
Allowances for doubtful accounts	$	1,976		$	1,091
Deferred branch tax benefit		15,813			16,592
Deferred income		29			31
Fixed assets		39			—
Accrued expenses		1,440			3,299
Foreign tax credit		5,572			2,592
Stock compensation		3,465			2,918
Pension		651			1,041
Intangibles		2,376			2,651
		31,361			30,215
Deferred tax liabilities:
Prepaid expenses		(196	)		(200	)
Intangibles		(23,000	)		(25,807	)
Property and equipment		(3,098	)		(4,032	)
Amortization expense		(9,715	)		(7,624	)
Total deferred tax liabilities		(36,009	)		(37,663	)
	$	(4,648	)	$	(7,448	)

        The deferred tax amounts mentioned above have been classified on the accompanying consolidated balance sheets at December 31, 2015 and 2014 as follows (amounts in thousands):

	2015		2014
Current assets	$	—	$	4,222
Non-current assets	$	13,280	$	—
Non-current liabilities	$	17,928	$	11,670

        In the fourth quarter of 2015, we prospectively adopted ASU-2015-17—Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. To provide greater clarity in the presentation and timing of utilization of both deferred tax assets and liabilities, we have elect to early adopt this ASU by tax jurisdiction. If we had adopted this ASU retrospectively, current deferred tax assets would have been reclassified to $9.8 million of non-current deferred tax assets and $17.3 million of non-current deferred tax liabilities.

        At December 31, 2015 and 2014, the Company has foreign tax credit carryforwards for U.S. federal purposes and foreign minimum credits totaling $5.6 million and $ 2.6 million, respectively, which expire during the years 2021 through 2025.

        Upon audit, taxing authorities may prohibit the realization of all or part of an uncertain tax position. While the Company has no history of tax audits, the Company regularly assesses the outcome

F-24

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 6. Income Taxes (Continued)

of potential examinations in each of the tax jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. The Company recognizes interest and penalties related to uncertain tax positions, if any, in income tax expense. As of December 31, 2015, the Company has uncertain tax position reserves of $0.3 million and recorded related interest expense of $0.0 million. During 2014, the Company identified an uncertain tax position and recorded a liability of $0.7 million with an offsetting deferred tax asset. The company accrued no interest related to this item.

Note 7. Long-Term Debt

        Long-term debt as of December 31, 2015 and 2014 consists of the following (amounts in thousands):

	December 31, 2015			December 31, 2014
Senior Notes due July 2020	$	219,923		$	221,791
Less: Current portion		(8,278	)		(2,250	)
	$	211,645		$	219,541

        On July 30, 2013 certain of our subsidiaries (the "Borrowers") entered into a credit agreement providing for a $175.0 million senior secured term loan B facility (the "Term Loan Facility") which matures on July 30, 2020. On July 31, 2014, certain of our subsidiaries amended the Term Loan Facility (the "Amended Term Loan Facility") which provides for an aggregate principal amount of $225.0 million and matures on July 30, 2020. Pricing on the Amended Term Loan Facility was set at LIBOR plus 400 basis points (decreased from a margin of 500 basis points) subject to a LIBOR floor of 1.00% (decreased from a LIBOR floor of 1.25%), resulting in an effective interest rate 5.00%, and 0.5% of original issue discount ("OID"). The Amended Term Loan Facility also provides an uncommitted accordion option (the "Incremental Facility") allowing for additional borrowings under the Amended Term Loan Facility up to an aggregate principal amount equal to (i) $40.0 million plus (ii) an additional amount of up to 4.0x first lien net leverage. The obligations under the Amended Term Loan Facility are guaranteed by HMTV, LLC, our direct wholly-owned subsidiary, and all of our existing and future subsidiaries (subject to certain exceptions in the case of immaterial subsidiaries). Additionally, the Amended Term Loan Facility provides for an uncommitted incremental revolving loan option in an aggregate principal amount of up to $20.0 million, which shall be secured on a pari passu basis by the collateral securing the Amended Term Loan Facility. The Amended Term Loan Facility is secured by a first-priority perfected security interest in substantially all of our assets.

        The proceeds of the Amended Term Loan Facility, were used to pay fees and expenses associated with the Cable Networks Acquisition, and for general corporate purposes including potential future acquisitions. The OID of $1.7 million, net of accumulated amortization of $0.7 million at December 31, 2015, was recorded as a reduction to the principal amount of the Amended Term Loan Facility outstanding and will be amortized as a component of interest expense over the term of the Amended Term Loan Facility. We recorded $2.3 million of deferred financing costs associated with the Term Loan Facility, as amended, net of accumulated amortization of $1.0 million at December 31, 2015, which will be amortized utilizing the effective interest rate method over the remaining term of the Amended Term Loan Facility. In July 2014, we recorded a $1.1 million loss on early extinguishment of debt; $0.7 million related to deferred costs and $0.4 million related to OID. Additionally, we incurred $1.0 million of deferred financing costs related to the Amended Term Loan Facility in accordance with

F-25

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 7. Long-Term Debt (Continued)

ASC 470—Debt, which is included in Other Expenses on the accompanying Consolidated Statement of Operations.

        The Amended Term Loan Facility principal payments are payable on quarterly due dates commencing September 30, 2014, with a final installment on July 30, 2020.

        In addition, pursuant to the terms of the Amended Term Loan Facility, within 90 days after the end of each fiscal year (commencing with the fiscal year ending December 31, 2015), the Borrowers are required to make a prepayment of the loan principal in an amount equal to 50% of the excess cash flow of the most recently completed fiscal year. Excess cash flow is generally defined as net income plus depreciation and amortization expense, less mandatory prepayments of the term loan, interest charges, income taxes and capital expenditures, and adjusted for the change in working capital. The percentage of the excess cash flow used to determine the amount of the prepayment of the loan declines from 50% to 25% and again to 0% at lower leverage ratios.

        The excess cash flow as defined in the Term Loan Facility will require a payment of approximately $8.3 million, which will be paid upon filing of this Form 10-K in March 2016. As permitted under the Term Loan Facility, the excess cash flow payment will be allocated at our election and in direct order of maturity, accordingly, we will not be required to make the scheduled quarterly loan amortization payments for several quarters. As a result, the excess cash flow payment will represents the current portion of long-term debt net of OID shown on the balance sheet as of December 31, 2015.

        Following are maturities of long-term debt, at December 31, 2015 (amounts in thousands):^(a)

Year Ending December 31,
2016	$	8,278
2017		—
2018		—
2019		722
2020		212,625
	$	221,625

(a)

Table does not consider any future excess cash payments.

Note 8. Stockholders' Equity

Capitalization

        On April 4, 2013, the merger by and among Cinelatino, WAPA Holdings and Azteca providing for the acquisition of Cinelatino and the combination of WAPA Holdings and Azteca as indirect, wholly-owned subsidiaries of Hemisphere (the "Transaction") was consummated.

        In connection with the Transaction (i) the holders of Cinelatino common stock and the holder of membership interests in WAPA Holdings (the "Cinelatino/WAPA Investors") surrendered their respective interests and received an aggregate of 33,000,000 shares of Hemisphere Class B common stock, par value $0.0001 ("Class B common stock")(of which 1.5 million Class B Common Stock is subject to forfeiture if the market price of shares of Hemisphere Class A common stock does not reach certain levels), a cash payment equal to an aggregate of $5.0 million, and purchased 2,333,334 warrants

F-26

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 8. Stockholders' Equity (Continued)

from Azteca founders to purchase Hemisphere Class A common stock, par value $0.0001 (such warrants, "Warrants" and such stock, "Class A common stock"); (ii) each share of Azteca common stock was automatically converted into one share of Class A common stock; (iii) each Amended Azteca Warrant, as defined below, was automatically converted into an equal number of Warrants; and (iv) immediately prior to the consummation of the Transaction, Azteca Acquisition Holdings, LLC and certain existing shareholders of Azteca contributed 250,000 shares of Azteca common stock to Azteca for cancellation and agreed to subject an additional 250,000 shares of Class A common stock to certain forfeiture provisions (a total of 503,788 shares of Class A common stock is subject to forfeiture) if the market price of shares of Hemisphere Class A common stock does not reach certain levels. Following the consummation of the Transaction, there were 10,991,100 shares of Class A stock outstanding and 33,000,000 shares of Hemisphere Class B stock outstanding. Subsequent to the Transaction, an additional 250,000 shares of Class A restricted stock were issued. From time to time the Company has issued Class A common stock to certain members of management and board of directors as equity compensation, subject to time and performance vesting conditions, as discussed below.

        In December 2014, a shareholder of Class B common stock transferred 3.0 million shares of Class B common stock to a third party. As a result, the Class B common stock was automatically converted to Class A common stock.

        As of the filing date of this Form 10-K, the last sale price of the Company's Class A Common Stock has not equaled or exceeded $15.00 per share (as adjusted for stock splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 36 months following April 4, 2013. As a result, approximately 379,000 Class A Common shares have been forfeited.

        In the event the last sale price of the Class A Common Stock does not equal or exceed $15.00 per share (as adjusted for stock splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 60 months following April 4, 2013, Class A Common shares totaling 0.1 million and Class B Common Shares totaling 1.5 million will be forfeited.

Voting

        Class B common stock votes on a 10 to 1 basis with the Class A common stock, which means that each share of Class B common stock will have 10 votes and each share of Class A common stock will have 1 vote. The Class B common stock shall be convertible in whole or in part at any time at the option of the holder or holders thereof, into an equal number of Class A common stock.

Equity Incentive Plans

        An aggregate of 4.0 million shares of our Class A common stock were authorized for issuance under the terms of the Hemisphere Media Group, Inc. 2013 Equity Incentive Plan (the "2013 Equity Incentive Plan). At December 31, 2015, 0.8 million shares remained available for issuance of stock options or other stock-based awards under our Equity Incentive Plan (including shares of restricted Class A common stock surrendered to the Company in payment of taxes required to be withheld in respect of vested shares of restricted Class A common stock and available for issuance). The expiration date of the 2013 Equity Incentive Plan, on and after which date no awards may be granted, is April 4, 2023. The Company's board of directors administers the 2013 Equity Incentive Plan, and has the sole

F-27

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 8. Stockholders' Equity (Continued)

and plenary authority to, among other things: (i) designate participants; (ii) determine the type, size, and terms and conditions of awards to be granted; (iii) determine the method by which an award may be settled, exercised, canceled, forfeited, or suspended.

        The Company's time-based restricted stock awards and option awards generally vest in three equal annual installments beginning on the first anniversary of the grant date, subject to the grantee's continued employment or service with the Company. The Company's event-based restricted stock awards and option awards generally vest either upon the Company's Class A common stock attaining a $15.00 closing price per share, as quoted on the NASDAQ Global Market, on at least 10 trading days, subject to the grantee's continued employment or service with the Company. Other event-based restricted stock awards granted to certain members of our Board vest on the day preceding the Company's annual shareholder meeting.

Stock-Based Compensation

        Stock-based compensation expense related to stock options and restricted stock was $5.6 million, $5.9 million and $7.2 million for the years ended December 31, 2015, 2014, and 2013, respectively. At December 31, 2015, there was $2.3 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.1 years. At December 31, 2015, there was $3.7 million of total unrecognized compensation cost related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 0.9 years.

Stock Options

        The fair value of stock options granted is estimated at the date of grant using the Black-Scholes pricing model for time-based options and the Monte Carlo simulation model for event-based options. The expected term of options granted is derived using the simplified method under ASC 718-10-S99-1/SEC Topic 14.D for "plain vanilla" options and the Monte Carlo simulation for event-based options. Expected volatility is based on the historical volatility of the Company's competitors given its lack of trading history. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has estimated forfeitures of 1.5%, as the awards are to management for which the Company expects lower turnover, and has assumed no dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future.

Black-Scholes Option Valuation Assumptions	2015	2014	2013
Risk-free interest rate	1.76% - 2.12%	1.76% - 1.92%	0.93% - 2.03%
Dividend yield	—	—	—
Volatility	25.8% - 29.5%	28.4% - 30.9%	34.4% - 36.7%
Weighted-average expected term (years)	6.3	6.0 - 6.3	6.0

F-28

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 8. Stockholders' Equity (Continued)

        The following table summarizes stock option activity for the years ended December 31, 2015, 2014 and 2013 (shares and intrinsic values in thousands):

	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual term		Aggregate intrinsic value
Outstanding at January 1, 2013
Granted		1,730		$	11.20		9.3	$	1,157
Exercised		—			—		—		—
Forfeited or expired		—			—		—		—
Outstanding at December 31, 2013		1,730		$	11.20		9.3	$	2,208
Granted		140		$	11.56		9.7		—
Exercised		—			—		—		—
Forfeited or expired		—			—		—		—
Outstanding at December 31, 2014		1,870		$	11.23		8.4	$	4,721
Granted		215		$	13.61		6.2		—
Exercised		(15	)		10.60		—		—
Forfeited or expired		(27	)		10.60		—		—
Outstanding at December 31, 2015		2,043		$	11.49		7.6	$	6,740
Vested at December 31, 2015		1,065		$	11.33		7.3	$	3,696
Exerciseable at December 31, 2015		1,065		$	11.33		7.3	$	3,696

        The weighted average grant date fair value of options granted for the years ended December 31, 2015, 2014 and 2013 was $4.13, $3.75 and $4.21. At December 31, 2015, 0.3 million options granted are unvested, event-based options.

Restricted Stock

        Certain employees and directors have been awarded restricted stock under the 2013 Equity Incentive Plan. The time-based restricted stock grants vest primarily over a period of three years. The fair value and expected term of event-based restricted stock grants is estimated at the grant date using the Monte Carlo simulation model.

F-29

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 8. Stockholders' Equity (Continued)

        The following table summarizes restricted share activity for the years ended December 31, 2015, 2014 and 2013 (shares in thousands):

	Number of shares			Weighted-average grant date fair value
Outstanding at January 1, 2013		—			—
Granted		1,195		$	9.81
Vested		(250	)	$	8.41
Forfeited		—			—
Outstanding at December 31, 2013		945		$	10.18
Granted		79			11.34
Vested		(305	)		11.33
Forfeited		—			—
Outstanding at December 31, 2014		719		$	9.82
Granted		99		$	12.42
Vested		(324	)		10.65
Forfeited		—			—
Outstanding at December 31, 2015		494		$	9.79

        At December 31, 2015, 0.2 million shares of restricted stock issued are unvested, event-based shares.

Warrants

        In connection with the capitalization of the Company noted above, the Company has issued 14.7 million warrants, which qualify as equity instruments. Each warrant entitles the holder to purchase one-half of the number of shares of our Class A common stock at a price of $6.00 per half share. At December 31, 2015, 13.3 million warrants were issued and outstanding, which are exercisable into 6.7 million shares of our Class A common stock. Warrants are only exercisable for a whole number of shares of common stock (i.e. only an even number of warrants may be exercised at any given time by a registered holder). As a result, a holder must exercise at least two warrants, at an effective exercise price of $12.00 per warrant. At the option of the Company, 8.7 million warrants may be called for redemption, provided that the last sale price of our Class A common stock reported has been at least $18.00 per share on each of twenty trading days within the thirty-day period ending on the third business day prior to the date on which notice of redemption is given. The warrants expire on April 4, 2018. In December 2015, we repurchased 1.3 million warrants from a single holder in a privately negotiated transaction for a total cost of $1.8 million.

        During the year ended December 31, 2015, we issued 5,000 shares of our Class A common stock upon the exercise of 10,000 warrants for total exercise proceeds of $0.1 million.

Note 9. Contingencies

        The Company is involved in various legal actions, generally related to its operations. Management believes, based on advice from legal counsel, that the outcome of such legal actions will not adversely affect the financial condition of the Company.

F-30

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 10. Commitments

        The Company has entered into certain rental property contracts with third parties, which are accounted for as operating leases. Rental expense was $0.6 million, $0.3 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively

        The Company has certain commitments including various operating leases.

        Future minimum payments for these commitments and other commitments, primarily programming, are as follows (amounts in thousands):

Year Ending December 31,	Operating Leases		Other Commitments		Total
2016	$	296	$	7,093	$	7,389
2017		388		3,413		3,801
2018		383		2,561		2,944
2019		335		1,260		1,595
2020 and thereafter		1,150		631		1,781
Total	$	2,552	$	14,958	$	17,510

Note 11. Retirement Plans

        WAPA, a wholly owned subsidiary of the Company, makes contributions to the Televicentro de Puerto Rico Special Retirement Benefits (the "Retirement Plan"). The Retirement Plan is available to all reporters and union employees after completing three (3) months of service. Eligible employees, those meeting active service minimums and minimum age requirements, are eligible to receive a one-time lump sum payment at retirement, of two (2) weeks per year of service capped at a maximum payment of forty-five (45) weeks. The number of retirees is capped at five (5) per year. There are 164 participants in the Retirement Plan.

        Following is the plan's projected benefit obligation at December 31, 2015 and 2014. (amounts in thousands):

	2015			2014
Projected benefit obligation:
Balance, beginning of the year	$	2,682		$	2,114
Service cost		112			82
Interest cost		102			105
Actuarial loss		53			457
Benefits paid to participants		(84	)		(76	)
Balance, end of year	$	2,865		$	2,682

F-31

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 11. Retirement Plans (Continued)

        At December 31, 2015, 2014 and 2013, the funded status of the plan was as follows (amounts in thousands):

	2015			2014			2013
Excess of benefit obligation over the value of plan assets	$	(2,865	)	$	(2,682	)	$	(2,114	)
Unrecognized net actuarial loss		905			904			473
Unrecognized prior service cost		69			86			103
Accrued benefit cost	$	(1,891	)	$	(1,692	)	$	(1,538	)

        The plan is unfunded. As such, the Company is not required to make annual contributions to the plan.

        At December 31, 2015 and 2014, the amounts recognized in the consolidated balance sheets were classified as follows (amounts in thousands):

	2015			2014
Accrued benefit cost	$	(2,865	)	$	(2,682	)
Accumulated other comprehensive loss		974			990
Net amount recognized	$	(1,891	)	$	(1,692	)

        Amounts recorded in accumulated other comprehensive loss are reported net of tax.

        The benefits expected to be paid in each of the next five years and thereafter are as follows (amounts in thousands):

Years Ending December 31,	Amount
2016	$	146
2017		185
2018		222
2019		127
2020		153
2021 through 2025		958
	$	1,791

        At December 31, 2015 and 2014, the following weighted-average rates were used:

	2015			2014
Discount rate on the benefit obligation		3.90	%		3.80	%
Rate of employee compensation increase		4.00	%		4.00	%

F-32

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 11. Retirement Plans (Continued)

        Pension expense for the years ended December 31, 2015, 2014 and 2013, consists of the following (amounts in thousands):

	2015		2014		2013
Service cost	$	112	$	82	$	83
Interest cost		102		105		84
Expected return on plan assets		—		—		—
Recognized actuarial loss (gain)		—		—		—
Amortization of prior service cost		17		17		19
Net loss amortization		51		27		36
	$	282	$	231	$	222

        WAPA makes contributions to the Newspaper Guild International Pension Plan (the "Plan" or "TNGIPP"), a multiemployer pension plan with a plan year end of December 31 that provides defined benefits to certain employees covered by two CBAs, one of which was scheduled to expire on July 23, 2015 and the other of which expires on June 27, 2016. Pursuant to its terms, the CBA which was scheduled to expire on July 23, 2015 automatically renewed for a period of eighteen (18) months upon such expiration date and remains in effect through January 23, 2017 while the parties negotiate its renewal. WAPA's contribution rates to the Plan are generally determined in accordance with the provisions of the CBAs and a rehabilitation plan that was adopted by the TNGIPP.

        The risks in participating in such a plan are different from the risks of single-employer plans, in the following respects:

•

Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employer.

•

If a participating employer ceases to contribute to a multiemployer plan, the unfunded obligation of the plan may be borne by the remaining participating employer.

        Under current law regarding multiemployer defined benefit plans, a plan's termination, WAPA's voluntary withdrawal, or the mass withdrawal of all contributing employers from any underfunded multiemployer defined benefit plan would require us to make payments to the plan for our proportionate share of the multiemployer plan's unfunded vested liabilities.

        WAPA has received Annual Funding Notices, Report of Summary Plan Information, Critical Status Notices ("Notices") and the above-noted Rehabilitation Plan, as defined by the Pension Protection Act of 2006 ("PPA"), from the Plan. The Notices indicate that the Plan actuary has certified that the Plan is in critical status, the "Red Zone", as defined by the PPA, and that a plan of rehabilitation ("Rehabilitation Plan") was adopted by the Trustees of the Plan ("Trustees") on May 1, 2010 and then updated on November 17, 2015. On May 29, 2010, the Trustees sent WAPA a Notice of Reduction and Adjustment of Benefits Due to Critical Status explaining all changes adopted under the Rehabilitation Plan, including the reduction or elimination of benefits referred to as "adjustable benefits." In connection with the adoption of the Rehabilitation Plan, most of the Plan participating unions and contributing employers (including the Newspaper Guild International and WAPA), agreed to one of the "schedules" of changes as set forth under the Rehabilitation Plan. WAPA elected the "Preferred Schedule" and executed a Memorandum of Agreement, effective May 27, 2010 (the "MOA") and

F-33

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 11. Retirement Plans (Continued)

agreed to the following contribution rate increases: 3.0% beginning on January 1, 2013; an additional 3.0% beginning on January 1, 2014; and an additional 3% beginning on January 1, 2015. In 2015, The Plan's Trustee's reviewed the Rehabilitation Plan and the financial projections under the Plan and determined that is was not prudent to continue benefit accruals under the current Plan and that implementation of a updated plan with a new benefit design would be in the best interest of the Plan's participants. As a result, the Plan's Board of Trustee's adopted changes to the Rehabilitation Plan effective January 1, 2016.

        Under the Rehabilitation Plan, as revised in 2015, WAPA will need to agree to one of the updated "schedules" of changes as set forth under the revised Rehabilitation Plan. These schedule options include a new preferred schedule that does not require contribution increases but requires the employer to commit to remaining in the Plan for an additional five years, or the existing preferred schedule or a default schedule, both of which require annual contribution increases of 3% (starting January 1, 2016).

        The contribution increases and effect of the Rehabilitation Plan as described above are not anticipated to have a material effect on the Company's results of operations. However, in the event other contributing employers are unable to, or fail to, meet their ongoing funding obligations, the financial impact on WAPA to contribute to any plan underfunding may be material. In addition, if a United States multiemployer defined benefit plan fails to satisfy certain minimum funding requirements, the Internal Revenue Service may impose a nondeductible excise tax of 5.0% on the amount of the accumulated funding deficiency for those employers contributing to the fund.

        If WAPA completely or partially withdrew from the Plan, it would be obligated to pay complete or partial withdrawal liability (which could be material). Pursuant to the last available notice (for the Plan year ended December 31, 2014), WAPA's contributions to the Plan exceeded 5% of total contributions made to the Plan.

        Further information about the Plan is presented in the table below (amounts in thousands):

		Pension Protection Act Zone Status	Funding Improvement Plan/Rehabilitation Plan	WAPA's Contribution							Expiration Date of Collective Bargaining Agreements
										Surcharge Imposed
Pension Fund	EIN	2013	Status	2015		2014		2013
TNGIPP (Plan No. 001)	52-1082662	Red	Implemented	$	151	$	144	$	144	Yes	July 21, 2015 June 27, 2016

F-34

Hemisphere Media Group, Inc.

Notes to Consolidated Financial Statements (Continued)

Note 12. Quarterly Financial Data (Unaudited)

        (Amounts in thousands, except per share amounts)

	2015 Quarters Ended(a)
	March 31		June 30		September 30		December 31
Net revenues	$	29,471	$	32,618	$	31,465	$	36,236
Operating income		7,056		8,780		7,951		11,079
Net income		2,462		3,431		2,910		4,934
Earnings per share:
Basic	$	0.06	$	0.08	$	0.07	$	0.11
Dilutive	$	0.06	$	0.08	$	0.07	$	0.11

	2014 Quarters Ended(a)(b)
	March 31		June 30		September 30		December 31
Net revenues	$	20,951	$	29,055	$	28,781	$	33,202
Operating income		3,647		6,612		5,559		10,211
Net income		248		5,318		663		4,330
Earnings per share:
Basic	$	0.01	$	0.13	$	0.02	$	0.10
Dilutive	$	0.01	$	0.13	$	0.02	$	0.10

	2013 Quarters Ended(a)(c)
	March 31			June 30			September 30			December 31
Net revenues	$	13,495		$	22,929		$	23,705		$	25,876
Operating (loss) income		(117	)		(1,292	)		4,110			5,019
Net (loss) income		(525	)		(2,426	)		(3,985	)		2,639
Earnings (loss) per share:
Basic	$	(525	)	$	(0.06	)	$	(0.09	)	$	0.06
Dilutive	$	(525	)	$	(0.06	)	$	(0.09	)	$	0.06

(a)

The sum of the quarters will not equal the full year due to rounding.

(b)

On April 1, 2014, the Cable Networks Acquisition was consummated, and the operating results are included in our consolidated financial statements as of the date of the acquisition.

(c)

On April 4, 2013, the merger by and among Cinelatino, WAPA Holdings and Azteca providing for the combination of Cinelatino, WAPA Holdings and Azteca as indirect, wholly-owned subsidiaries of Hemisphere (the "Transaction") was consummated. Although Hemisphere issued the equity interests in the Transaction, since it was a new entity formed solely to issue these equity interests to effect the Transaction it was not considered the acquirer and one of the combining entities that existed before the transaction was identified as the acquirer. WAPA was identified as the accounting acquirer and predecessor, whose historical results became the results of Hemisphere. The operating results of the acquired businesses are included in our consolidated financial statements as of the Transaction date.

F-35

EX-10.16

Exhibit 10.16

EXECUTION COPY

PRIVATE AND CONFIDENTIAL

EMPLOYMENT AGREEMENT (the “Agreement”) dated as of August 7, 2015, by and between Hemisphere Media Group, Inc., a Delaware corporation (the “Company”), and Vicky Bathija (“Executive”).

WHEREAS, the Company desires to employ Executive and Executive is willing to serve the Company for the period and upon such other terms and conditions of this Agreement; and

WHEREAS Executive’s agreement to enter into this Agreement and be bound by the terms hereof, including the restrictive covenants herein, is a material inducement to the Company’s willingness to grant stock options and restricted stock to Executive and the Company would not otherwise grant such stock options and restricted stock to Executive if Executive did not agree to enter into this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, and intending to be legally bound hereby, the parties hereto agree as set forth below:

1.Term.  (a)  The term of Executive’s employment under this Agreement shall be effective on August 7, 2015 (the “Effective Date”), and shall continue until December 31, 2018 (the “Initial Expiration Date”), provided that on the Initial Expiration Date and each subsequent anniversary of the Initial Expiration Date, the term of Executive’s employment under this Agreement shall be extended for one additional year unless either party provides written notice to the other party at least 270 days prior to the Initial Expiration Date (or any such anniversary, as applicable) that Executive’s employment hereunder shall not be so extended (in which case Executive’s employment shall terminate on the Initial Expiration Date or expiration of the extended term, as applicable); provided, however, that Executive’s employment under this Agreement may be terminated at any time pursuant to the provisions of Section 4. The period of time from the Effective Date through the termination of this Agreement and Executive’s employment hereunder pursuant to its terms is herein referred to as the “Term”; and the date on which the Term is scheduled to expire (i.e., the Initial Expiration Date or the scheduled expiration of the extended term, if applicable) is herein referred to as the “Expiration Date”.

(b)Executive agrees and acknowledges that the Company has no obligation to extend the Term or to continue Executive’s employment following the Expiration Date, and Executive expressly acknowledges that no promises or understandings to the contrary have been made or reached. Executive also agrees and acknowledges that, should Executive and the Company choose to continue Executive’s employment for any period of time following the Expiration Date without extending the term of Executive’s employment under this Agreement or entering into a new written employment agreement, Executive’s employment with the Company shall be “at will”, such that the Company may terminate Executive’s employment at any time, with or without reason and with or without notice, and Executive may resign at any time, with or without reason and with or without notice.

(c)For purposes of this Agreement, the following terms, as used herein, shall have the definitions set forth below.

“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person, provided that, in any event, any business in which the Company has any direct or indirect ownership interest shall be treated as an Affiliate of the Company.

“Change in Control” has the meaning set forth in the Plan.

“Control” (including, with correlative meanings, the terms “Controlled by” and “under common Control with”), as used with respect to any Person, means the direct or indirect possession of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Governmental Entity” means any national, state, county, local, municipal or other government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality.

“Person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, association, Governmental Entity, unincorporated entity or other entity.

“Plan” means the Hemisphere Media Group, Inc. 2013 Equity Incentive Plan.

2.Duties and Responsibilities.  (a)  During the Term, Executive agrees to be employed and devote substantially all of Executive’s business time and efforts to the Company and the promotion of its interests and the performance of Executive’s duties and responsibilities hereunder as Executive Vice President, Corporate Development and Investor Relations (“EVP”), upon the terms and conditions of this Agreement. Executive shall perform such lawful duties and responsibilities as directed from time to time by the Chief Executive Officer of the Company or the Chief Financial Officer of the Company (“CFO”) that are customary for a EVP of a corporation of the size and nature of the Company.

(b)During the Term, Executive shall report directly to the CFO. Executive acknowledges that Executive’s duties and responsibilities shall require Executive to travel on business to the extent necessary to fully perform Executive’s duties and responsibilities hereunder. It is anticipated that Executive shall physically be on Company premises (or traveling on Company business) during normal business hours (unless absent due to vacation, injury, illness or other approved leave of absence).

(c)During the Term, Executive shall use Executive’s best efforts to faithfully and diligently serve the Company and shall not act in any capacity that is in conflict with Executive’s duties and responsibilities hereunder; provided, however, Executive may manage Executive’s personal investments and affairs and participate in non-profit, educational, charitable and civic activities, to the extent that such activities do not interfere with the performance of Executive’s duties hereunder, and are not in conflict with the business interests of the Company or its Affiliates or otherwise compete with the Company or its Affiliates. Except as provided in the immediately preceding sentence, for the avoidance of doubt, during the Term Executive shall not be permitted to become engaged in or render services for any Person other than the Company and its Affiliates, and shall not be permitted to be a member of the board of directors of any company, in any case without the consent of the Company (for all purposes under this Agreement, any required consent of the Company shall be evidenced by a duly authorized resolution of the Board of Directors of the Company (“Board”)).

3.Compensation and Related Matters.  (i)  Base Salary.  During the Term, for all services rendered under this Agreement, Executive shall receive an aggregate annual base salary (“Base Salary”) at an initial rate of $350,000 (which shall be increased by 5% on each anniversary of the Effective Date), payable in accordance with the Company’s applicable payroll practices. Base Salary shall be subject to review by the Board annually for increases, but not decreases, deemed necessary or appropriate in its sole discretion. References in this Agreement to “Base Salary” shall be deemed to refer to the most recently effective annual base salary rate.

2

(b)Annual Bonus.

(i)During the Term, subject to Section 4(b), for each calendar year, Executive shall have the opportunity to earn an annual bonus (“Annual Bonus”) based on performance against specified objective (including budgetary or EBITDA-based) performance criteria (“Performance Goals”) established by the Board prior to or as soon as practicable following each calendar year (or within 90 days following the Effective Date, in the case of calendar year 2015), which goals shall be substantially consistent with, but to the extent applicable, no less favorable than, the performance goals applicable to the annual bonus for the CFO, subject to Executive’s continued employment through December 31 of each such calendar year. Executive’s target annual bonus (“Target Bonus”) shall be $100,000 if the Company achieves at least 100% of its Performance Goals, which bonus shall be pro-rated for calendar year 2015 and the year of termination of employment to reflect in each case the period of Executive’s employment with the Company during such year. Notwithstanding the foregoing, subject to Executive’s continued employment through December 31 of each such calendar year, if the Company achieves greater than or equal to 80% of its Performance Goals, the Annual Bonus for calendar year 2015, 2016, 2017 and 2018 shall be not less than $60,000, which bonus shall be pro-rated for calendar year 2015 and the year of termination of employment to reflect in each case the period of Executive’s employment with the Company during such year, with the actual Annual Bonus determined by linear interpolation based on the Company’s achievement of Performance Goals between 80% and 100%. If the Company achieves greater than 100% of its Performance Goals and the CFO therefore receives an annual bonus greater than the target bonus prescribed in the CFO’s employment agreement, the Annual Bonus for Executive shall be increased beyond the Target Bonus level by the same percentage as that by which the CFO’s annual bonus was increased beyond the CFO’s target bonus level.

(ii)Any Annual Bonus payable for any calendar year shall be paid in cash as soon as practicable following the determination of the Company’s performance results for such calendar year, but in  no event later than March 15th of the calendar year following the calendar year to which such Annual Bonus relates.

(c)Equity.  As promptly as practicable following the Effective Date, the Company shall grant Executive, pursuant to, and subject to, the terms of the Plan and an option grant certificate substantially in the form attached hereto as Exhibit A, an option (the “Option”) to purchase 100,000 shares of Company common stock (the “Stock”). Each share of Stock subject to the Option shall have an exercise price equal to the fair market value of a share of Stock on the date of grant. As promptly as practicable following the Effective Date, the Company shall grant Executive pursuant to, and subject to, the terms of the Plan and a restricted stock certificate substantially in the form attached hereto as Exhibit B, 25,000 restricted shares of Stock.

(d)Benefits and Perquisites.  During the Term, Executive shall be entitled to participate in the benefit plans and programs commensurate with Executive’s position, that are provided by the Company from time to time for its senior executives generally, subject to the terms and conditions of such plans.

(e)Business Expense Reimbursements.  During the Term, the Company shall promptly reimburse Executive for Executive’s reasonable and necessary business expenses incurred in connection with performing Executive’s duties hereunder in accordance with its then-prevailing policies and procedures for expense reimbursement (which shall include appropriate itemization and substantiation of expenses incurred).

3

(f)Vacation.  During the Term, Executive shall be entitled to four weeks paid vacation each calendar year, in accordance with the Company’s vacation policy to be taken at such times as may be mutually agreed by Executive and the Company. Unused vacation in any calendar year shall be carried over to the next calendar year; provided that, in no event shall Executive’s eligible vacation time exceed 8 weeks in any calendar year.

(g)Relocation Expenses.  Within thirty (30) days of  Executive’s relocation to the Miami, Florida metropolitan area, or if later, within thirty (30) days of a reimbursable expense being incurred by Executive, the Company shall reimburse Executive for all reasonable costs in connection with such relocation on a fully grossed-up basis, including two (2) to three (3) house hunting trips and broker-related fees incurred in connection with such house-hunting trips, if any, and Executive’s COBRA continuation coverage expenses until such time Executive is eligible to be covered under the Company’s health benefits plan, subject to appropriate itemization and substantiation of expenses incurred.

(h)Ancillary Fees.  The Company shall reimburse the Executive within thirty (30) days following the Effective Date his reasonable unanticipated fees incurred in connection with his relocation that are not otherwise covered pursuant to Section 3(g) or in excess of the amounts allocated therein, up to a maximum of $5,000, subject to appropriate itemization and substantiation of expenses incurred. Additionally, the Company shall be responsible for paying all fees and expenses (including, attorney’s fees) related to the transfer of Executive’s and his family’s H-1B Visa and corresponding applications for green cards with the U.S. Citizenship and Immigration Services office or other government agencies.

(i)Indemnification.  The Company agrees that in the event Executive is, or is threatened to be, made a party to any pending, contemplated or threatened action, suit, arbitration or other proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal (each a “Proceeding”), by reason of the fact that Executive is or was, or had agreed to become an officer, employee, agent, representative or fiduciary of the Company, or is or was serving at the request of the Company as a board member, officer, employee, agent or fiduciary of another Person, the Company shall indemnify and hold Executive harmless, to the maximum extent permitted by the Company’s governing documents or, if greater, by applicable law (but not in any event in contravention of the Company’s governing documents), against all expenses, damages, liabilities and losses incurred by Executive, provided that Executive acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal Proceeding, had no reasonable cause to believe his conduct was unlawful; provided, further, that Executive shall not be entitled to any such indemnification (A) in respect of any Proceeding based upon or attributable to Executive gaining in fact any personal profit or advantage to which he is not entitled or resulting from Executive’s fraudulent, dishonest or willful misconduct, (B) to the extent Executive has already received indemnification or payment pursuant to the Company’s operating agreement or other governing documents, D&O insurance or otherwise or (C) in respect of any Proceeding initiated by Executive, unless the Company has joined in or the Board has authorized such Proceeding. Expenses incurred by Executive in defending any claim shall be paid by the Company in advance of the final disposition of such claim upon receipt by the Company of an undertaking by or on behalf of Executive to repay such amount if it shall be ultimately determined that Executive is not entitled to be indemnified by the Company pursuant to this Section 3(i). To the extent the Company maintains an insurance policy covering the errors and omissions of its Board members and officers, Executive shall be covered by such policy during the Term and for six years following Executive’s termination of employment in a manner no less favorable than Board members and other officers of the Company.

4

4.Termination of Employment.  (i)  Executive’s employment may be terminated by either party at any time and for any reason; provided, however, that Executive shall be required to give the Company at least 60 days advance written notice of any voluntary resignation of Executive’s employment hereunder (and in such event the Company in its sole discretion may elect to accelerate Executive’s date of termination of employment, it being understood that such termination shall still be treated as a voluntary resignation for purposes of this Agreement). Notwithstanding the foregoing, Executive’s employment shall automatically terminate upon Executive’s death.

(b)Following any termination of Executive’s employment, notwithstanding any provision to the contrary in this Agreement, the obligations of the Company to pay or provide Executive with compensation and benefits under Section 3 shall cease, and the Company shall have no further obligations to provide compensation or benefits to Executive hereunder except (i) for payment of (w) any accrued but unpaid Base Salary through the date of termination, (x) any unpaid Annual Bonus for the year prior to the year in which termination occurs, (y) any accrued but unused vacation days, and (z) any unreimbursed expenses under Section 3(e), in each case accrued or incurred through the date of termination of employment, payable as soon as practicable and in all events within 30 days following termination of employment, (ii) as explicitly set forth in any other benefit plans, programs or arrangements applicable to terminated employees in which Executive participates, other than severance plans or policies, and (iii) as otherwise expressly required by applicable law (collectively, the “Accrued Obligations”). For the avoidance of doubt, (A) any Annual Bonus for the year of termination of employment is forfeited if Executive’s employment is terminated for Cause or resignation by Executive other than for Good Reason, and (B) in the case of Executive’s death, any payments to be made to Executive in accordance with this Section 4 shall be paid to Executive’s beneficiaries, devisees, heirs, legates or estate, as applicable.

(c)(i)Except as otherwise provided herein, if Executive’s employment is terminated (I) by the Company without Cause (other than due to death or Disability (as defined below), or due to the Company’s election not to extend the Term beyond the scheduled expiration of the Term on the Expiration Date as contemplated under Section 1(a)), or (II) by the Executive for Good Reason, then Executive, in addition to the Accrued Obligations, shall be entitled to receive an aggregate amount equal to (A) the sum of (x) Executive’s Base Salary and (y) the Target Bonus (the “Severance Payment”), plus (B) the product of (x) the actual Annual Bonus that Executive would have been entitled to receive for the year of termination had Executive continued to be employed through the end of the calendar year in which such termination occurs, and (y) a fraction, the numerator of which is the number of calendar days Executive was employed in the calendar year of termination, and the denominator of which is 365 (the “Pro Rata Bonus”). The Severance Payment shall be paid during the 12-month period immediately following such termination in substantially equal installments consistent with the Company’s payroll practices, and the Pro Rata Bonus shall be paid on the date that other executives are paid their annual bonuses in respect of the year in which Executive’s termination occurs.

(ii)Notwithstanding anything herein to the contrary, if at any time within 60 days before, or 12 months following, a Change in Control, Executive’s employment is terminated (I) by the Company without Cause (other than due to death or Disability, or due to the Company’s election not to extend the Term beyond the scheduled expiration of the Term on the Expiration Date as contemplated under Section 1(a)), or (II) by the Executive for Good Reason, then Executive, in addition to the Accrued Obligations but in lieu of the payments described in Section 4(c)(i), shall be entitled to receive an aggregate amount equal to (A) two times the Severance Payment plus (B) the  product of (x) the Target Bonus for the year of termination, and (y) a fraction, the numerator of which is the number of calendar days Executive was employed in the calendar year

5

of termination, and the denominator of which is 365. Notwithstanding anything herein to the contrary, at any time following a Change in Control, if Executive’s employment is terminated due to the Company’s election not to extend the Term beyond the scheduled expiration of the Term on the Expiration Date as contemplated under Section 1(a), then Executive, in addition to the Accrued Obligations, shall be entitled to the Severance Payment. All payments described in this Section 4(c)(ii) shall be paid in cash in a lump sum within 30 business days following the execution of the Release that has become irrevocable by its terms; provided, that to the extent any portion of such lump sum payment would violate Section 409A (as defined below), then such portion shall be paid during the 12-month period immediately following such termination in substantially equal installments consistent with the Company’s payroll practices.

(iii)If Executive’s employment is terminated due to death or by the Company due to Disability, for Cause (but only pursuant to Section 4(c)(v)(D) and not pursuant to Sections 4(c)(v)(A)-(C)), or due to the Company’s election not to extend the Term beyond the scheduled expiration date of the Term on the Expiration Date as contemplated under Section 1(a), then Executive, in addition to the Accrued Obligations, shall be entitled to receive payment of the Pro Rata Bonus, payable no later than March 15 of the calendar year following the calendar year in which Executive’s termination of employment occurs. In addition to the foregoing, if Executive’s employment is terminated due to the Company’s election not to extend the Term beyond the scheduled expiration of the Term on the Expiration Date as contemplated under Section 1(a) prior to a Change in Control, then Executive shall be entitled to continued payment of Executive’s Base Salary during the 6-month period immediately following such termination, in substantially equal installments consistent with the Company’s payroll practices.

(iv)Any payments or benefits under Section 4(c)(i), 4(c)(ii) or 4(c)(iii) shall be (A) conditioned upon Executive and the Company having executed a mutual, irrevocable waiver and general release of claims substantially in a form attached hereto as Exhibit C (the “Release”) that has become effective in accordance with its terms, (B) subject to Executive’s continued compliance with the terms of this Agreement and (C) subject to Section 25.

(v)For purposes of this Agreement, “Cause” means: (A) Executive’s willful refusal to perform his duties for the Company, which refusal or failure remains uncured for 15 days after he receives written notice from the Board demanding cure; (B) in carrying out his duties under the employment agreement, Executive engages in willful  misconduct, or gross neglect, that in either case causes material economic harm to the Company’s business or reputation; (C) Executive is convicted of, or enters a plea of guilty or nolo contendere to, a felony and such conviction or plea has a material adverse effect on his ability to perform his duties for the Company or causes material harm to the Company or its Affiliates; or (D) (i) if Executive’s employment authorization expires (and no renewal application is pending before a government agency in the normal course) or is revoked (and such expiration or revocation is not caused by the Company’s bad faith efforts), or (ii) Executive’s ability to conduct his duties hereunder is otherwise adversely affected by Executive’s immigration or work authorization status.

(vi)For purposes of this Agreement, “Disability” means Executive would be entitled to long-term disability benefits under the Company’s long-term disability plan as in effect from time to time, without regard to any waiting or elimination period under such plan and assuming for the purpose of such determination that Executive is actually participating in such plan at such time. If the Company does not maintain a long-term disability plan, “Disability” means Executive’s inability to perform Executive’s duties and responsibilities hereunder due to physical or mental illness or

6

incapacity that is expected to last for a consecutive period of 90 days or for a period of 120 days in any 365 day period as determined by the Board in its good faith judgment.

(vii)For purposes of this Agreement, “Good Reason” shall mean the occurrence of any of the following events without Executive’s prior express written consent: (A) any reduction in Executive’s Base Salary or Target Bonus, or any material diminution in Executive’s authorities, titles or offices, or the assignment to him of duties that materially impair his ability to perform the duties normally assigned to the EVP of a corporation of the size and nature of the Company; (B) any change in the reporting structure so that Executive reports other than to the CFO; (C) any relocation of Executive’s principal place of employment, to a location outside of the Miami, Florida metropolitan area; (D) any material breach by the Company, or any of its Affiliates, of any material obligation to Executive; or (E) the failure of the Company to obtain the assumption in writing of its obligation to perform this Agreement by any successor to all or substantially all of the business and assets of the Company within 15 days after any merger, consolidation, sale or similar transaction; provided however, that prior to resigning for Good Reason, Executive shall give written notice to the Company of the facts and circumstances claimed to provide a basis for such resignation not more than thirty (30) days following his knowledge of such facts and circumstances, and the Company shall have thirty (30) days after receipt of such notice to cure such facts and circumstances (and if so cured then Executive shall not be permitted to resign for Good Reason in respect thereof).

(d)Upon termination of Executive’s employment for any reason, upon the Company’s request Executive agrees to resign, as of the date of such termination of employment or such other date requested, from the Board and any committees thereof (and, if applicable, from the board of directors (and any committees thereof) of any Affiliate of the Company) to the extent Executive is then serving thereon.

(e)The payment of any amounts accrued under any benefit plan, program or arrangement in which Executive participates shall be subject to the terms of the applicable plan, program or arrangement, and any elections Executive has made thereunder. Except as prohibited by the terms of any Company benefit plan, program or arrangement, the Company may offset any amounts due and payable by Executive to the Company or its subsidiaries against any amounts the Company owes Executive hereunder; provided, however, no offsets shall be permitted against amounts that constitute deferred compensation subject to Section 409A. Except as set forth in this Section 4(e), Executive shall be under no obligation to seek other employment or to otherwise mitigate the obligations of the Company under this Agreement, and there shall be no offset against amounts or benefits due to Executive under this Agreement or otherwise on account of any claim (other than any preexisting debts then due in accordance with their terms) the Company or its affiliates may have against him or any remuneration or other benefit earned or received by the Executive after such termination.

5.Noncompetition and Nonsolicitation. For purposes of Sections 5, 6, 7, 8, 9, 10 and 11 of this Agreement, references to the Company shall include its subsidiaries and Affiliates.

(a)Executive agrees that Executive shall not, while an employee of the Company and during the one-year period following termination of employment (such collective duration, the “Restriction Period”), directly or indirectly, without the prior written consent of the Company:

(i)(A) engage in activities or businesses (including without limitation by owning any interest in, managing, controlling, participating in, consulting with, advising, rendering services for, or in any manner engaging in the business of owning, operating or managing any business) anywhere in the world that are principally or primarily in the business of producing Spanish

7

language media content, or owning or operating Hispanic television networks (“Competitive Activities”) or (B) assisting any Person in any way to do, or attempt to do, anything prohibited by this Section 5(a)(i)(A) above; or

(ii)perform any action, activity or course of conduct which is substantially detrimental to the businesses or business reputations of the Company, including (A) soliciting, recruiting or hiring (or attempting to solicit, recruit or hire) any employees of the Company or Persons who have worked for the Company during the 12-month period immediately preceding such solicitation, recruitment or hiring or attempt thereof; (B) soliciting or encouraging (or attempting to solicit or encourage) any employee of the Company to leave the employment of the Company; (C) intentionally interfering with the relationship of the Company with any Person who or which is employed by or otherwise engaged to perform services for, or any customer, client, supplier, licensee, licensor or other business relation of, the Company; or (D) assisting any Person in any way to do, or attempt to do, anything prohibited by Section 5(a)(ii)(A), (B) or (C) above.

The Restriction Period shall be tolled during (and shall be deemed automatically extended by) any period in which Executive is in violation of the provisions of this Section 5(a).

(b)The provisions of Section 5(a) shall not be deemed breached as a result of Executive’s passive ownership of less than an aggregate of 3% of any class of securities of a Person engaged, directly or indirectly, in Competitive Activities, so long as Executive does not actively participate in the business of such Person; provided, however, that such stock is listed on a national securities exchange.

(c)Without limiting the generality of Section 11, notwithstanding the fact that any provision of this Section 5 is determined not to be specifically enforceable, the Company may nevertheless be entitled to recover monetary damages as a result of Executive’s material breach of such provision.

(d)Executive acknowledges that the Company has a legitimate business interest and right in protecting its Confidential Information (as defined below), business strategies, employee and customer relationships and goodwill, and that the Company would be seriously damaged by the disclosure of Confidential Information and the loss or deterioration of its business strategies, employee and customer relationships and goodwill. Executive acknowledges that Executive is being provided with significant additional consideration (to which Executive is not otherwise entitled), including stock options and restricted stock, to induce Executive to enter into this Agreement. Executive expressly acknowledges and agrees that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area. Executive further acknowledges that although Executive’s compliance with the covenants contained in Sections 5, 6, 7, 8 and 9 may prevent Executive from earning a livelihood in a business similar to the business of the Company, Executive’s experience and capabilities are such that Executive has other opportunities to earn a livelihood and adequate means of support for Executive and Executive’s dependents.

6.Nondisclosure of Confidential Information.  (i)  Executive acknowledges that Executive is and shall become familiar with the Company’s Confidential Information (as defined below), including trade secrets, and that Executive’s services are of special, unique and extraordinary value to the Company. Executive acknowledges that the Confidential Information obtained by Executive while employed by the Company is the property of the Company. Therefore, Executive agrees that Executive shall not disclose to any unauthorized Person or use for Executive’s own purposes any Confidential Information without the prior written consent of the Company, unless and to the extent that the

8

aforementioned matters become generally known to and available for use by the public other than as a result of Executive’s acts or omissions in violation of this Agreement; provided, however, that if Executive receives a request to disclose Confidential Information pursuant to a deposition, interrogatory, request for information or documents in legal proceedings, subpoena, civil investigative demand, governmental or regulatory process or similar process, (i) Executive shall promptly notify in writing the Company, and consult with and assist the Company in seeking a protective order or request for other appropriate remedy, (ii) in the event that such protective order or remedy is not obtained, or if the Company waives compliance with the terms hereof, Executive shall disclose only that portion of the Confidential Information which, in the written opinion of Executive’s legal counsel, is legally required to be disclosed and shall exercise reasonable best efforts to provide that the receiving Person shall agree to treat such Confidential Information as confidential to the extent possible (and permitted under applicable law) in respect of the applicable proceeding or process and (iii) the Company shall be given an opportunity to review the Confidential Information prior to disclosure thereof.

(b)For purposes of this Agreement, “Confidential Information” means information, observations and data concerning the business or affairs of the Company, including, without limitation, all business information (whether or not in written form) which relates to the Company, or its customers, suppliers or contractors or any other third parties in respect of which the Company has a business relationship or owes a duty of confidentiality, or their respective businesses or products, and which is not known to the public generally other than as a result of Executive’s breach of this Agreement, including but not limited to: technical information or reports; formulas; trade secrets; unwritten knowledge and “know-how”; operating instructions; training manuals; customer lists; customer buying records and habits; product sales records and documents, and product development, marketing and sales strategies; market surveys; marketing plans; profitability analyses; product cost; long-range plans; information relating to pricing, competitive strategies and new product development; information relating to any forms of compensation or other personnel-related information; contracts; and supplier lists. Confidential Information will not include such information known to Executive prior to Executive’s involvement with the Company or information rightfully obtained from a third party (other than pursuant to a breach by Executive of this Agreement). Without limiting the foregoing, Executive agrees to keep confidential the existence of, and any information concerning, any dispute between Executive and the Company, except that Executive may disclose information concerning such dispute to his immediate family, to the court that is considering such dispute or to Executive’s legal counsel and other professional advisors (provided that such counsel and other advisors agree not to disclose any such information other than as necessary to the prosecution or defense of such dispute).

(c)Except as expressly set forth otherwise in this Agreement, Executive agrees that Executive shall not disclose the terms of this Agreement, except to Executive’s  immediate family and Executive’s financial and legal advisors, or as may be required by law or ordered by a court. Executive further agrees that any disclosure to Executive’s financial or legal advisors shall only be made after such advisors acknowledge and agree to maintain the confidentiality of this Agreement and its terms.

(d)Executive further agrees that Executive will not improperly use or disclose any confidential information or trade secrets, if any, of any former employers or any other Person to whom Executive has an obligation of confidentiality, and will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other Person to whom Executive has an obligation of confidentiality unless consented to in writing by the former employer or other Person.

9

7.Return of Property.  Executive acknowledges that all notes, memoranda, specifications, devices, formulas, records, files, lists, drawings, documents, models, equipment, property, computer, software or intellectual property relating to the businesses of the Company, in whatever form (including electronic), and all copies thereof, that are received or created by Executive while an employee of the Company or its subsidiaries or Affiliates (including but not limited to Confidential Information and Inventions (as defined below)) are and shall remain the property of the Company, and Executive shall immediately return such property to the Company upon the termination of Executive’s employment and, in any event, at the Company’s request. Executive further agrees that any property situated on the premises of, and owned by, the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company’s personnel at any time with or without notice.

8.Intellectual Property Rights.  (i)  Executive agrees that the results and proceeds of Executive’s services for the Company (including, but not limited to, any trade secrets, products, services, processes, know-how, designs, developments, innovations, analyses, drawings, reports, techniques, formulas, methods, developmental or experimental work, improvements, discoveries, inventions, ideas, source and object codes, programs, matters of a literary, musical, dramatic or otherwise creative nature, writings and other works of authorship) resulting from services performed while an employee of the Company and any works in progress, whether or not patentable or registrable under copyright or similar statutes, that were made, developed, conceived or reduced to practice or learned by Executive, either alone or jointly with others (collectively, “Inventions”), shall be works-made-for-hire and the Company shall be deemed the sole owner throughout the universe of any and all trade secret, patent, copyright and other intellectual property rights (collectively, “Proprietary Rights”) of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner the Company determines in its sole discretion, without any further payment to Executive whatsoever. If, for any reason, any of such results and proceeds shall not legally be a work-made-for-hire and/or there are any Proprietary Rights which do not accrue to the Company under the immediately preceding sentence, then Executive hereby irrevocably assigns and agrees to assign any and all of Executive’s right, title and interest thereto, including any and all Proprietary Rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, to the Company, and the Company shall have the right to use the same in perpetuity throughout the universe in any manner determined by the Company without any further payment to Executive whatsoever. As to any Invention that Executive is required to assign, Executive shall promptly and fully disclose to the Company all information known to Executive concerning such Invention.

(b)Executive agrees that, from time to time, as may be requested by the Company and at the Company’s sole cost and expense, Executive shall do any and all things that the Company may reasonably deem useful or desirable to establish or document the Company’s exclusive ownership throughout the United States of America or any other country of any and all Proprietary Rights in any such Inventions, including the execution of appropriate copyright and/or patent applications or assignments. To the extent Executive has any Proprietary Rights in the Inventions that cannot be assigned in the manner described above, Executive unconditionally and irrevocably waives the enforcement of such Proprietary Rights. This Section 8(b) is subject to and shall not be deemed to limit, restrict or constitute any waiver by the Company of any Proprietary Rights of ownership to which the Company may be entitled by operation of law by virtue of the Company’s being Executive’s employer. Executive further agrees that, from time to time, as may be requested by the Company and at the Company’s sole cost and expense, Executive shall assist the Company in every proper and lawful way to obtain and from time to time enforce Proprietary Rights relating to Inventions in any and all countries. Executive shall execute, verify and deliver such documents and perform such other acts (including

10

appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and the assignment thereof. In addition, Executive shall execute, verify and deliver assignments of such Proprietary Rights to the Company or its designees. Executive’s obligations under this Section 8 shall continue beyond the termination of Executive’s employment with the Company.

(c)Executive hereby waives and quitclaims to the Company any and all claims, of any nature whatsoever, that Executive now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.

9.Nondisparagement.  Executive shall not, whether in writing or orally, malign, denigrate or disparage the Company or its predecessors and successors, or any of the current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, with respect to any of their respective past or present activities, or otherwise publish (whether in writing or orally) statements that tend to portray any of the aforementioned parties in an unfavorable light; provided that nothing herein shall or shall be deemed to prevent or impair Executive from, in the course of and consistent with his duties for the Company, making public comments which include good faith, candid discussions, or acknowledgements regarding the Company’s performance or business, or discussing other officers, directors, and employees in connection with normal performance evaluations, or otherwise testifying truthfully in any legal or administrative proceeding where such testimony is compelled, or requested or from otherwise complying with legal requirements. The Company shall not, and shall instruct its senior executives not to, whether in writing or orally, malign, denigrate or disparage Executive, or otherwise publish (whether in writing or orally) statements that tend to portray Executive in an unfavorable light; provided that nothing herein shall or shall be deemed to prevent or impair the Company or any such executives discussing Executive in connection with normal performance evaluations or from testifying truthfully in any legal or administrative proceeding where such testimony is compelled, or requested or from otherwise complying with legal requirements.

10.Notification of Subsequent Employer.  Executive hereby agrees that prior to accepting employment with, or agreeing to provide services to, any other Person during any period during which Executive remains subject to any of the covenants set forth in Section 5, Executive shall provide such prospective employer with written notice of such provisions of this Agreement, with a copy of such notice delivered simultaneously to the Company.

11.Remedies and Injunctive Relief.  Executive acknowledges that a violation by Executive of any of the covenants contained in Section 5, 6, 7, 8 or 9 would cause irreparable damage to the Company in an amount that would be material but not readily ascertainable, and that any remedy at law (including the payment of damages) would be inadequate. Accordingly, Executive agrees that, notwithstanding any provision of this Agreement to the contrary, the Company shall be entitled (without the necessity of showing economic loss or other actual damage) to injunctive relief (including temporary restraining orders, preliminary injunctions and/or permanent injunctions) in any court of competent jurisdiction for any actual or threatened breach of any of the covenants set forth in Section 5, 6, 7, 8 or 9 in addition to any other legal or equitable remedies it may have. The preceding sentence shall not be construed as a waiver of the rights that the Company may have for damages under this Agreement or otherwise, and all of the Company’s rights shall be unrestricted.

12.Representations of Executive; Advice of Counsel.  (a)  Executive represents, warrants and covenants that as of the date hereof:  (i) Executive has the full right, authority and capacity to enter into this Agreement and perform Executive’s obligations hereunder, (ii) Executive is not bound

11

by any agreement that conflicts with or prevents or restricts the full performance of Executive’s duties and obligations to the Company hereunder during or after the Term and (iii) the execution and delivery of this Agreement shall not result in any breach or violation of, or a default under, any existing obligation, commitment or agreement to which Executive is subject.

(b)Executive represents that, prior to execution of this Agreement, Executive has been advised by an attorney of Executive’s own selection regarding this Agreement. Executive acknowledges that Executive has entered into this Agreement knowingly and voluntarily and with full knowledge and understanding of the provisions of this Agreement after being given the opportunity to consult with counsel. Executive further represents that in entering into this Agreement, Executive is not relying on any statements or representations made by any of the Company’s directors, officers, employees or agents which are not expressly set forth herein, and that Executive is relying only upon Executive’s own judgment and any advice provided by Executive’s attorney.

13.Cooperation.  Executive agrees that, upon reasonable notice and without the necessity of the Company obtaining a subpoena or court order, Executive shall provide reasonable cooperation in connection with any suit, action or proceeding (or any appeal from any suit, action or proceeding), and any investigation and/or defense of any claims asserted against any of Executive and the Company, its respective Affiliates, their respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, which relates to events occurring during Executive’s employment with the Company and its Affiliates as to which Executive may have relevant information (including but not limited to furnishing relevant information and materials to the Company or its designee and/or providing testimony at depositions and at trial), provided that with respect to such cooperation occurring following termination of employment, the Company shall reimburse Executive for expenses reasonably incurred in connection therewith, and further provided that any such cooperation occurring after the termination of Executive’s employment shall be scheduled to the extent reasonably practicable so as not to unreasonably interfere with Executive’s business or personal affairs.

14.Withholding Taxes.  The Company may deduct and withhold from any amounts payable under this Agreement such Federal, state, local, non-U.S. or other taxes as are required or permitted to be withheld pursuant to any applicable law or regulation.

15.Assignment.  (a)  This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive, except for the assignment by will or the laws of descent and distribution of any accrued pecuniary interest of Executive, and any assignment in violation of this Agreement shall be void. The Company may assign this Agreement, and its rights and obligations hereunder, to any of its Affiliates.

(b)This Agreement shall be binding on, and shall inure to the benefit of, the parties to it and their respective heirs, legal representatives, successors and permitted assigns (including, without limitation, successors by merger, consolidation, sale or similar transaction, and, in the event of Executive’s death, Executive’s estate and heirs in the case of any payments due to Executive hereunder).

(c)Executive acknowledges and agrees that all of Executive’s covenants and obligations to the Company, as well as the rights of the Company hereunder, shall run in favor of and shall be enforceable by the Company and its successors and assigns.

16.Governing Law; No Construction Against Drafter.  This Agreement shall be deemed to be made in the State of Delaware, and the validity, interpretation, construction, and

12

performance of this Agreement in all respects shall be governed by the laws of the State of Delaware without regard to its principles of conflicts of law. No provision of this Agreement or any related document will be construed against or interpreted to the disadvantage of any party hereto by any court or other governmental or judicial authority by reason of such party having or being deemed to have structured or drafted such provision.

17.Consent to Jurisdiction; Waiver of Jury Trial.  (a)  Except as otherwise specifically provided herein, Executive and the Company each hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for the District of Delaware (or, if subject matter jurisdiction in that court is not available, in any state court located within the State of Delaware) over any dispute arising out of or relating to this Agreement. Except as otherwise specifically provided in this Agreement, the parties undertake not to commence any suit, action or proceeding arising out of or relating to this Agreement in a forum other than a forum described in this Section 17(a); provided, however, that nothing herein shall preclude the Company from bringing any suit, action or proceeding in any other court for the purposes of enforcing the provisions of this Section 17 or enforcing any judgment obtained by the Company.

(b)The agreement of the parties to the forum described in Section 17(a) is independent of the law that may be applied in any suit, action, or proceeding and the parties agree to such forum even if such forum may under applicable law choose to apply non-forum law. The parties hereby waive, to the fullest extent permitted by applicable law, any objection which they now or hereafter have to personal jurisdiction or to the laying of venue of any such suit, action or proceeding brought in an applicable court described in Section 17(a), and the parties agrees that they shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. The parties agree that, to the fullest extent permitted by applicable law, a final and non-appealable judgment in any suit, action or proceeding brought in any applicable court described in Section 17(a) shall be conclusive and binding upon the parties and may be enforced in any other jurisdiction.

(c)The parties hereto irrevocably consent to the service of any and all process in any suit, action or proceeding arising out of or relating to this Agreement by the mailing of copies of such process to such party at such party’s address specified in Section 22.

(d)Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding arising out of or relating to this Agreement. Each party hereto (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such party would not, in the event of any action, suit or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party hereto has been induced to enter into this Agreement by, among other things, the mutual waiver and certifications in this Section 17(d).

(e)Each party shall bear its own costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with any dispute arising out of or relating to this Agreement; provided that, the Company shall reimburse the Executive for reasonable attorneys’ fees and expenses to the extent that Executive substantially prevails as to a material issue with respect to any matters subject to dispute hereunder.

18.Amendment; No Waiver.  No provisions of this Agreement may be amended, modified, waived or discharged except by a written document signed by Executive and a duly authorized officer of the Company (other than Executive). The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or

13

deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. No failure or delay by either party in exercising any right or power hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or any abandonment of any steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.

19.Severability.  If any term or provision of this Agreement is invalid, illegal or incapable of being enforced by any applicable law or public policy, all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party; provided, however, that if any term or provision of Section 5, 6, 7, 8 or 9 is invalid, illegal or incapable of being enforced by any applicable law or public policy, all other conditions and provisions of this Agreement shall nonetheless remain in full force and effect to the fullest extent permitted by law; provided further, that in the event that any court of competent jurisdiction shall finally hold in a non-appealable judicial determination that any provision of Section 5, 6, 7, 8 or 9 (whether in whole or in part) is void or constitutes an unreasonable restriction against Executive, such provision shall not be rendered void but shall be deemed to be modified to the minimum extent necessary to make such provision enforceable for the longest duration and the greatest scope as such court may determine constitutes a reasonable restriction under the circumstances. Subject to the foregoing, upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

20.Entire Agreement.  This Agreement, including the Exhibits hereto, constitutes the entire agreement and understanding between the Company and Executive with respect to the subject matter hereof and supersedes all prior agreements and understandings (whether written or oral), between Executive and the Company, relating to such subject matter. None of the parties shall be liable or bound to any other party in any manner by any representations and warranties or covenants relating to such subject matter except as specifically set forth herein.

21.Survival.  The rights and obligations of the parties under the provisions of this Agreement shall survive, and remain binding and enforceable, notwithstanding the expiration of the Term, the termination of this Agreement, the termination of Executive’s employment hereunder or any settlement of the financial rights and obligations arising from Executive’s employment hereunder, to the extent necessary to preserve the intended benefits of such provisions.

22.Notices.  All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by facsimile or electronic image scan (pdf) or sent, postage prepaid, by registered, certified or express mail or overnight courier service and shall be deemed given when so delivered by hand or facsimile, or if mailed, three days after mailing (one business day in the case of express mail or overnight courier service) to the parties at the following addresses or facsimiles or email addresses (or at such other address for a party as shall be specified by like notice):

If to the Company:	Hemisphere Media Group, Inc.
	2000 Ponce de Leon Blvd., Suite 500
	Coral Gables, FL 33134
	Attention: Legal Department

14

With a copy (which shall not constitute notice hereunder) to:

	Paul, Weiss, Rifkind, Wharton & Garrison LLP
	1285 Avenue of the Americas
	New York, NY 10019-6064
	Fax: (212) 757-3990
	Attention: Jeffrey D. Marell, Esq.
	Email: jmarell@paulweiss.com
If to Executive:	Vicky Bathija
	At the most recent address and fax or email in Company personnel records

Notices delivered by facsimile shall have the same legal effect as if such notice had been delivered in person.

23.Headings and References.  The headings of this Agreement are inserted for convenience only and neither constitute a part of this Agreement nor affect in any way the meaning or interpretation of this Agreement. When a reference in this Agreement is made to a Section, such reference shall be to a Section of this Agreement unless otherwise indicated.

24.Counterparts.  This Agreement may be executed in one or more counterparts (including via facsimile and electronic image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

25.Section 409A.

(a)For purposes of this Agreement, “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations promulgated thereunder (and such other Treasury or Internal Revenue Service guidance) as in effect from time to time. The parties intend that any amounts payable hereunder that could constitute “deferred compensation” within the meaning of Section 409A will be compliant with Section 409A or exempt from Section 409A. Notwithstanding the foregoing, the Company shall not be liable to, and the Executive shall be solely liable and responsible for, any taxes or penalties that may be imposed on such Executive under Section 409A of the Code with respect to Executive’s receipt of payments hereunder.

(b)Notwithstanding anything in this Agreement to the contrary, the following special rule shall apply, if and to the extent required by Section 409A, in the event that (i) Executive is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i), (ii) amounts or benefits under this Agreement or any other program, plan or arrangement of the Company or a controlled group affiliate thereof are due or payable on account of “separation from service” within the meaning of Treasury Regulations Section 1.409A-1(h) and (iii) Executive is employed by a public company or a controlled group affiliate thereof:  no payments hereunder that are “deferred compensation” subject to Section 409A shall be made to Executive prior to the date that is six (6) months after the date of Executive’s separation from service or, if earlier, Executive’s date of death; following any applicable six (6) month delay, all such delayed payments will be paid in a single lump sum on the earliest permissible payment date.

15

(c)Any payment or benefit due upon a termination of Executive’s employment that represents a “deferral of compensation” within the meaning of Section 409A shall commence to be paid or provided to Executive 61 days following a “separation from service” as defined in Treas. Reg. § 1.409A-1(h), provided that Executive executes, if required by Section 4(c)(ii), the release described therein, within 60 days following his “separation from service.”  Each payment made under this Agreement (including each separate installment payment in the case of a series of installment payments) shall be deemed to be a separate payment for purposes of Section 409A. Amounts payable under this Agreement shall be deemed not to be a “deferral of compensation” subject to Section 409A to the extent provided in the exceptions in Treasury Regulation §§ 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay plans,” including the exception under subparagraph (iii)) and other applicable provisions of Section 409A. For purposes of this Agreement, with respect to payments of any amounts that are considered to be “deferred compensation” subject to Section 409A, references to “termination of employment”, “termination”, or words and phrases of similar import, shall be deemed to refer to Executive’s “separation from service” as defined in Section 409A, and shall be interpreted and applied in a manner that is consistent with the requirements of Section 409A.

(d)Notwithstanding anything to the contrary in this Agreement, any payment or benefit under this Agreement or otherwise that is exempt from Section 409A pursuant to Treasury Regulation § 1.409A-1(b)(9)(v)(A) or (C) (relating to certain reimbursements and in-kind benefits) shall be paid or provided to Executive only to the extent that the expenses are not incurred, or the benefits are not provided, beyond the last day of the second calendar year following the calendar year in which Executive’s “separation from service” occurs; and provided further that such expenses are reimbursed no later than the last day of the third calendar year following the calendar year in which Executive’s “separation from service” occurs. To the extent any indemnification payment, expense reimbursement, or the provision of any in-kind benefit is determined to be subject to Section 409A (and not exempt pursuant to the prior sentence or otherwise), the amount of any such indemnification payment or expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the indemnification payment or provision of in-kind benefits or expenses eligible for reimbursement in any other calendar year (except for any life-time or other aggregate limitation applicable to medical expenses), and in no event shall any indemnification payment or expenses be reimbursed after the last day of the calendar year following the calendar year in which Executive incurred such indemnification payment or expenses, and in no event shall any right to indemnification payment or reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit. Any tax gross-up payment or benefit under this Agreement will be treated as providing for payment at a specified time or on a fixed schedule of payments to the extent that the payment is made by the end of Executive’s taxable year next following Executive’s taxable year in which Executive remits the related taxes.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

16

IN WITNESS WHEREOF, this Agreement has been duly executed by the parties as of the date first written above.

HEMISPHERE MEDIA GROUP, INC.
By:	/s/ Alan J. Sokol
	Name:	Alan J. Sokol
	Title:	President and Chief Executive Officer
VICKY BATHIJA
/s/ Vicky Bathija

17

EX-10.17

Exhibit 10.17

EXECUTION COPY

December 1, 2015

Ms. Lucia Ballas-Traynor

415 Beechmont Drive

New Rochelle, NY 10804

Re: Offer of Employment

Dear Ms. Ballas-Traynor:

On behalf of Hemisphere Media Group, Inc., a Delaware corporation (the “Company”), I am pleased to offer you a position as a full-time exempt Executive Vice President, Advertising Sales.  If these terms and conditions are agreeable to you, please sign and date a copy of this letter in the space provided below and return it to me. This offer of employment is conditioned on your satisfactory completion of certain requirements, as more fully explained in this letter. Your employment is subject to the terms and conditions set forth in this letter.  Certain capitalized terms used herein shall have the meaning set forth in the “Appendix” to this letter (attached hereto).

1.Your start date, subject to the conditions herein, shall be on or about December 7, 2015.  You shall devote substantially all of your business time and efforts to the Company and its Affiliates and perform your duties and responsibilities consistent with the policies, procedures and practices of the Company.  You shall report directly to the Chief Executive Officer and President or his designee (each a “Supervisor”) and perform such lawful duties and responsibilities as directed from time to time by the Supervisor, although you will be expected to exercise discretion and independent judgment in carrying out your job duties in the course of your employment with the Company.  You shall initially perform your job duties in the New York, NY metropolitan area; provided, that you acknowledge that your duties and responsibilities may require you to travel on business to the extent necessary to fully perform your duties and responsibilities hereunder, and in connection therewith, as reasonably required by the Company, you shall visit any reasonable location, to perform your duties hereunder.

2.Your annual base salary will be paid at a rate of $275,000 per year (“Base Salary”), payable in accordance with the Company’s applicable payroll practices as are in effect from time to time.  At this time, salaries are paid on a bi-monthly basis.

3.During your employment with the Company, you shall have the opportunity to earn (i) quarterly bonuses (for the Company’s fiscal quarters ended March 31, June 30, September 30 and December 31 (each a “Quarterly Bonus”), and (ii) and an annual bonus (for the Company’s fiscal year ended December 31) (the “Annual Bonus”).  A Quarterly Bonus shall be based on your performance against specified objective performance criteria (“Quarterly Performance Goals”) established by the CEO or the CEO’s designee (in consultation with you) prior to or as soon as

2000 Ponce de Leon Blvd., Suite 500, Coral Gables, FL  33134 • Tel.: 305-421-6364 · Fax: 305-421-6389

practicable following each fiscal quarter, subject to your continued employment with the Company through March 31, June 30, September 30 and December 31, as applicable, of each such calendar year. Your target Quarterly Bonus for each fiscal quarter ended March 31, June 30, September 30 and December 31 of any calendar year shall be US$25,000.  An Annual Bonus shall be based on performance against specified objective performance criteria (“Annual Performance Goals”) established by the CEO or the CEO’s designee (in consultation with you) prior to or as soon as practicable following each calendar year, subject to your continued employment with the Company through December 31 of each such calendar year. Your target Annual Bonus shall be of US$50,000.

Any Quarterly Bonus payable for any fiscal quarter shall be paid in cash as soon as practicable following the determination of the Company’s performance results for such fiscal quarter, but in no event later than seventy five (75) days following the end of a fiscal quarter to which such Quarterly Bonus relates.

Any Annual Bonus payable for any calendar year shall be paid in cash as soon as practicable following the determination of the Company’s performance results for such calendar year, but in no event later than March 15th of the calendar year following the calendar year to which such Annual Bonus relates. For the avoidance of doubt, you shall not be eligible for an Annual Bonus for the year ended December 31, 2015.

4.The Company shall grant to you (subject to the approval of the Company’s Board of Directors), pursuant to, and subject to, the terms of the Plan and an option grant certificate, an option (the “Option”) to purchase 40,000 shares of the Company’s common stock (the “Stock”). Each share of Stock subject to the Option has an exercise price equal to the fair market value of a share of Stock on the date of grant.

5.The Company shall promptly reimburse you for your reasonable and necessary business expenses (including, international business class travel and upgrade fees for business class travel on domestic flights in excess of four (4) scheduled hours, meals, and lodging) incurred in connection with performing your duties hereunder in accordance with the Company’s then prevailing policies and procedures for expense reimbursement (which shall include appropriate itemization and substantiation of expenses incurred).

6.If this offer is accepted and you begin employment with the Company, you will also be eligible to participate in such benefit programs as the Company may, in its discretion, from time to time maintain for employees of your level, including, group health, dental and vision coverage and long-term disability coverage, in accordance with and subject to the eligibility and other provisions of such plans and programs.  You will be eligible for health, dental, vision and long-term disability coverage on the first day of the calendar month immediately following your first thirty (30) days of employment.  The foregoing is a summary, and in case of inconsistencies, the terms of the plans and programs will govern.  The Company expressly reserves the right to modify, substitute or eliminate these and other benefits at any time.

2

7.You will be eligible for fifteen (15) vacation days through December 31, 2016, which will accrue monthly in equal installments throughout such period; thereafter, you will be eligible for twenty (20) vacations day per calendar year which will accrue monthly in equal installments during such calendar year.  During your first three (3) months of employment, you will not be eligible to use any vacation days, although vacations days will accrue during this period.  You may use your vacation days in accordance with Company policy.

8.You will be expected to abide by all Company policies and will be required to acknowledge receipt of the basic employment policies handbook as well as various Company policies as are in effect from time to time.

9.You acknowledge that in the course of your employment with the Company, you shall become familiar with the Company’s Confidential Information, including trade secrets, and that your services are of special, unique and extraordinary value to the Company.  You acknowledge that the Confidential Information obtained by you while employed by the Company is the property of the Company.  Therefore, you agree that you shall not disclose to any unauthorized Person or use for your own purpose any Confidential Information without the prior written consent of the Company, unless and to the extent that the aforementioned matters become generally known to and available for use by the public other than as a result of your acts or omissions in violation of this letter.

10.You agree that you shall not disclose the contents of this letter, except to your immediate family and your financial and legal advisors, or as may be required by law or ordered by a court.  You further agree that any disclosure to your financial or legal advisors shall only be made after such advisors acknowledge and agree to maintain the confidentiality of this letter and its terms.

11.You further agree that you will not improperly use or disclose any Confidential Information or trade secrets, if any, of any former employers or any other Person to whom you have an obligation of confidentiality, and will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other Person to whom you have an obligation of confidentiality unless consented to in writing by the former employer or other Person.

12.You acknowledge that all notes, memoranda, specifications, devices, formulas, records, files, lists, drawings, documents, models, equipment, property, computer, software or intellectual property relating to the businesses of the Company, in whatever form (including electronic), and all copies thereof, that are received or created by you while an employee of the Company or its subsidiaries or Affiliates (including but not limited to Confidential Information and Inventions (as defined below) are and shall remain the property of the Company, and you shall immediately return such property to the Company upon the termination of your employment for any reason and, in any event, at the Company’s request.  You further agree that any property situated on the premises of, and owned by, the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company’s personnel at any time with or without notice.

3

13.You agree that the results and proceeds of your services for the Company (including, but not limited to, any trade secrets, products, services, processes, know-how, designs, developments, innovations, analyses, drawings, reports, techniques, formulas, methods, developmental or experimental work, improvements, discoveries, inventions, ideas, source and object codes, programs, matters of a literary, musical, dramatic or otherwise creative nature, writings and other works of authorship) resulting from services performed while an employee or consultant of the Company and any works in progress, whether or not patentable or registrable under copyright or similar statutes, that were made, developed, conceived or reduced to practice or learned by you, either alone or jointly with others (collectively, “Inventions”), shall be works-made-for-hire and the Company shall be deemed the sole owner throughout the universe of any and all trade secret, patent, copyright and other intellectual property rights (collectively, “Proprietary Rights”) of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner the Company determines in its sole discretion, without any further payment to you whatsoever.  If, for any reason, any of such results and proceeds shall not legally be a work-made-for-hire and/or there are any Proprietary Rights which do not accrue to the Company under the immediately preceding sentence, then you hereby irrevocably assign and agree to assign any and all of your right, title and interest thereto, including any and all Proprietary Rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, to the Company, and the Company shall have the right to use the same in perpetuity throughout the universe in any manner determined by the Company without any further payment to you whatsoever.  As to any Invention that you are required to assign, you shall promptly and fully disclose to the Company all information known to you concerning such Invention.  You hereby waive and quitclaim to the Company any and all claims, of any nature whatsoever, that you now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.

14.You shall not, whether in writing or orally, malign, denigrate or disparage the Company, its respective predecessors and successors, and all of the respective current or former directors, officers, employees, shareholders, partners, members, agents or representatives of any of the foregoing, with respect to any of their respective past or present activities, or otherwise publish (whether in writing or orally) statements that tend to portray any of the aforementioned parties in an unfavorable light; provided that nothing herein shall or shall be deemed to prevent or impair you from, in the course of and consistent with his duties for the Company, making public comments which include good faith, candid discussions, or acknowledgements regarding the Company’s performance or business, or discussing other officers, directors, and employees in connection with normal performance evaluations, or otherwise testifying truthfully in any legal or administrative proceeding where such testimony is compelled, or requested or from otherwise complying with legal requirements.  You further agree to keep confidential the existence of, and any information concerning, any dispute between you and the Company, except that you may disclose information concerning such dispute to your immediate family, to the court that is considering such dispute or to your legal counsel and other professional advisors (provided that such counsel and other advisors agree not to disclose any such information other than as necessary to the prosecution or defense of such dispute)

4

15.You represent, warrant and covenant that as of the date hereof: (i) you have the full right, authority and capacity to perform your obligations hereunder, (ii) you are not bound by any agreement that conflicts with or prevents or restricts the full performance of your duties and obligations to the Company hereunder and (iii) the execution and delivery of this letter shall not result in any breach or violation of, or a default under, any existing obligation, commitment or agreement to which you are subject.

16.The Company may deduct and withhold from any amounts payable to you such Federal, state, local, non-U.S. or other taxes as are required or permitted to be withheld pursuant to any applicable law or regulation.

17.You acknowledge that your employment will be at-will.  This means that either you or the Company may end your employment at any time, with or without cause, and with or without notice and without any obligation to you except to pay you for your salary through the date of termination.  You further acknowledge and agree that nothing is this letter is intended to or does create a contract of employment.

18.Your employment is contingent upon a satisfactory background check (including, without limitation, pre-hire drug testing), and your having and maintaining authorization to work in the United States.  The Company reserves the right to terminate your employment should you fail to possess or maintain such work authorization, or if such work authorization expires.  You agree and understand that it is the policy of the Company to maintain a drug-free work place.  You hereby consent to a pre-hire drug test as a condition to your employment.  You understand that the Company has the right, upon reasonable suspicion, to demand you immediately undergo testing for the presence of illegal or inappropriate drug usage.

19.For purposes of paragraphs 10, 11, 12, 13, 14 and 15 of this letter, references to the Company shall include its subsidiaries and Affiliates.

20.You acknowledge that a violation by you of any of the provisions in paragraphs 10, 11, 12, 13, 14 and 15 would cause irreparable damage to the Company in an amount that would be material but not readily ascertainable, and that any remedy at law (including the payment of damages) would be inadequate.  Accordingly, you agrees that, notwithstanding any provision of this letter to the contrary, the Company, shall be entitled (without the necessity of showing economic loss or other actual damage) to injunctive relief (including temporary restraining orders, preliminary injunctions and/or permanent injunctions) in any court of competent jurisdiction for any actual or threatened breach of any of the covenants set forth in paragraphs 10, 11, 12, 13, 14 and 15 in addition to any other legal or equitable remedies it may have.  The preceding sentence shall not be construed as a waiver of the rights that the Company may have for damages under this letter or otherwise, and all of the Company’s rights shall be unrestricted.

21.The Company reserves the right, at any time, to modify the terms hereof, including, without limitation, salary and benefits.  The failure of a party to insist upon strict adherence to any term of this letter on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this

5

letter.  No failure or delay by either party in exercising any right or power hereunder will operate as a waiver thereof, nor will any single or partial exercise of any such right or power, or any abandonment of any steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  This offer letter contains the entire terms of the offer of employment extended hereunder, and supersedes all prior or contemporaneous oral or written understandings or previous offers extended by the Company.

22.The rights and obligations of the parties under the provisions of this letter shall survive, and remain binding and enforceable, notwithstanding the termination of this letter, the termination of your employment or services hereunder.

[Signature page follows]

6

Sincerely,

/s/ Alan J. Sokol

Alan J. Sokol

Chief Executive Officer and President

Accepted and agreed to
By:	/s/ Lucia Ballas-Traynor
	Lucia Ballas-Traynor
Date: Decembr 1, 2015

[Signature Page to Offer Letter – Ballas-Traynor]

Appendix

Defined Terms

“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person, provided that, in any event, any business in which the Company has any direct or indirect ownership interest shall be treated as an Affiliate of the Company.

“Confidential Information” means information, observations and data concerning the business or affairs of the Company, including, without limitation, all business information (whether or not in written form) which relates to the Company, or its customers, suppliers or contractors or any other third parties in respect of which the Company has a business relationship or owes a duty of confidentiality, or their respective businesses or products, and which is not known to the public generally other than as a result of your breach of this letter, including but not limited to: technical information or reports; formulas; trade secrets; unwritten knowledge and “know-how”; operating instructions; training manuals; customer lists; customer buying records and habits; product sales records and documents, and product development, marketing and sales strategies; market surveys; marketing plans; profitability analyses; product cost; long-range plans; information relating to pricing, competitive strategies and new product development; information relating to any forms of compensation or other personnel-related information; contracts; and supplier lists.

“Control” (including, with correlative meanings, the terms “Controlled by” and “under common Control with”), as used with respect to any Person, means the direct or indirect possession of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Governmental Entity” means any national, state, county, local, municipal or other government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality.

“Person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, association, Governmental Entity, unincorporated entity or other entity.

“Plan” means the Hemisphere Media Group, Inc. 2013 Equity Incentive Plan.

EX-21.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 21.1

HEMISPHERE MEDIA GROUP, INC.
LIST OF SUBSIDIARIES

Name	Jurisdiction of Incorporation
HMTV, LLC	Delaware
Hemisphere Media Holdings, LLC(1)	Delaware
WAPA Holdings, LLC	Delaware
Cine Latino, Inc.(2)	Delaware
HMTV Cable, Inc.(2)	Delaware
WAPA America Inc.(3)	Delaware
InterMedia Español, Inc.(3)	Delaware
Televicentro of Puerto Rico, LLC(4)	Delaware
HMTV Pasiones US, LLC(5)	Delaware
HMTV Pasiones LatAm, LLC(5)	Delaware
HMTV Pasiones LatAm II, LLC(5)	Delaware
HMTV Centroamerica TV, LLC(5)	Delaware
HMTV TV Dominicana, LLC(5)	Delaware

(1)

Subsidiary of HMTV, LLC

(2)

Subsidiary of Hemisphere Media Holdings, LLC

(3)

Subsidiary of WAPA Holdings, LLC

(4)

Subsidiary of InterMedia Español, Inc.

(5)

Subsidiary of HMTV Cable, Inc.

QuickLinks

Exhibit 21.1

HEMISPHERE MEDIA GROUP, INC. LIST OF SUBSIDIARIES

EX-23.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

        We consent to the incorporation by reference in this Registration Statement (No. 333-187846) on Form S-8 of Hemisphere Media Group, Inc. of our report dated March 14, 2016, relating to our audit of the consolidated financial statements and internal control over financial reporting, which appear in this Annual Report on Form 10-K of Hemisphere Media Group, Inc. for the year ended December 31, 2015.

/s/ RSM US LLP

West Palm Beach, Florida
March 14, 2016

QuickLinks

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

EX-31.1

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 31.1

SECTION 302 CERTIFICATION

I, Alan J. Sokol, certify that:

1.

I have reviewed this annual report on Form 10-K of Hemisphere Media Group, Inc. (the "registrant");



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 14, 2016 By: /s/ ALAN J. SOKOL
Alan J. Sokol
Chief Executive Officer and President

QuickLinks

EXHIBIT 31.1

SECTION 302 CERTIFICATION

EX-31.2

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 31.2

SECTION 302 CERTIFICATION

I, Craig D. Fischer, certify that:

1.

I have reviewed this annual report on Form 10-K of Hemisphere Media Group, Inc. (the "registrant");



2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;



3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;



4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:



(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;



(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;



(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and



(d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and



5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):



(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and



(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 14, 2016 By: /s/ CRAIG D. FISCHER
Craig D. Fischer
Chief Financial Officer

QuickLinks

EXHIBIT 31.2

SECTION 302 CERTIFICATION

EX-32.1

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of Hemisphere Media Group, Inc. (the "Company") on Form 10-K for the period ending December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Alan J. Sokol, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in my capacity as an officer of the Company that, to my knowledge:

1.

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and



2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ALAN J. SOKOL
Alan J. Sokol
Chief Executive Officer and President

Date: March 14, 2016

        The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

        A signed original of this written statement required by Section 906 has been provided to Hemisphere Media Group, Inc. and will be retained by Hemisphere Media Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

QuickLinks -- Click here to rapidly navigate through this document

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report of Hemisphere Media Group, Inc. (the "Company") on Form 10-K for the period ending December 31, 2015 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Craig D. Fischer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in my capacity as an officer of the Company that, to my knowledge:

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



2.

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ CRAIG D. FISCHER
Craig D. Fischer
Chief Financial Officer

Date: March 14, 2016

        The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

        A signed original of this written statement required by Section 906 has been provided to Hemisphere Media Group, Inc. and will be retained by Hemisphere Media Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

QuickLinks

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Mar. 11, 2016	Jun. 30, 2015
Entity Registrant Name	HEMISPHERE MEDIA GROUP, INC.
Entity Central Index Key	0001567345
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 90,593,391
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Common Class A
Entity Common Stock, Shares Outstanding		15,635,655
Common Class B
Entity Common Stock, Shares Outstanding		30,027,418

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current Assets
Cash	$ 179,532	$ 142,010
Accounts receivable, net of allowance for doubtful accounts of $1,512 and $1,073, respectively	25,519	24,763
Due from related parties	1,722	1,334
Programming rights	5,552	5,441
Deferred taxes		4,222
Prepaid taxes and other current assets	4,541	8,071
Total current assets	216,866	185,841
Programming rights	7,457	6,652
Property and equipment, net	25,397	23,867
Deferred financing costs, net	2,254	2,758
Broadcast license	41,356	41,356
Goodwill	164,887	164,887
Other intangibles, net	78,185	91,611
Deferred taxes	13,280
Other assets	1,468	1,425
Total Assets	551,150	518,397
Current Liabilities
Accounts payable	2,463	2,176
Due to related parties	1,182	787
Accrued agency commissions	8,168	6,642
Accrued compensation and benefits	3,995	3,391
Accrued marketing	6,569	5,581
Taxes payable	902	927
Other accrued expenses	3,867	2,049
Programming rights payable	4,426	4,228
Current portion of long-term debt	8,278	2,250
Total current liabilities	39,850	28,031
Programming rights payable	365	111
Long-term debt, net of current portion	211,645	219,541
Deferred taxes	17,928	11,670
Defined benefit pension obligation	2,721	2,631
Total Liabilities	$ 272,509	$ 261,984
Stockholders' Equity
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; 0 shares issued and outstanding at December 31, 2015 and December 31, 2014
Additional paid-in capital	$ 256,551	$ 246,858
Treasury stock, at cost 236,171 at December 31, 2015 and 146,703 at December 31, 2014	(3,144)	(1,961)
Retained earnings	25,837	12,098
Accumulated comprehensive loss	(607)	(586)
Total Stockholders' Equity	278,641	256,413
Total Liabilities and Stockholders' Equity	551,150	518,397
Common Class A
Stockholders' Equity
Common stock	1	1
Common Class B
Stockholders' Equity
Common stock	$ 3	$ 3

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Accounts receivable, allowance for doubtful accounts	$ 1,512	$ 1,073
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Treasury stock, shares	236,171	146,703
Common Class A
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	15,342,440	14,518,734
Common stock, shares outstanding	15,342,440	14,518,734
Common Class B
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	33,000,000	33,000,000
Common stock, shares issued	30,027,148	30,027,148
Common stock, shares outstanding	30,027,148	30,027,148

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements of Operations
Net revenues	$ 129,790	$ 111,989	$ 86,005
Operating Expenses:
Cost of revenues	41,189	36,450	33,950
Selling, general and administrative	36,037	31,608	29,678
Depreciation and amortization	17,218	16,552	8,762
Other expenses	446	1,282	5,694
Loss on disposition of assets	33	70	199
Total operating expenses	94,923	85,962	78,283
Operating income	34,867	26,027	7,722
Other Expenses:
Interest expense, net	(12,086)	(11,925)	(7,240)
Loss on extinguishment of debt		(1,116)	(1,649)
Total other expenses	(12,086)	(13,041)	(8,889)
Income (loss) before income taxes	22,781	12,986	(1,167)
Income tax expense	(9,042)	(2,429)	(3,130)
Net income (loss)	$ 13,739	$ 10,557	$ (4,297)
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.32	$ 0.25	$ (0.14)
Diluted (in dollars per share)	$ 0.31	$ 0.25	$ (0.14)
Weighted average shares outstanding:
Basic (in shares)	42,840	42,321	31,143
Diluted (in shares)	43,802	42,622	31,143

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements of Comprehensive Income (Loss)
Net income (loss)	$ 13,739	$ 10,557	$ (4,297)
Other comprehensive income (loss):
Net unrealized gain on interest rate swap agreement			38
Adjustment to defined benefit plan, net of tax	(21)	50	130
Other, net of tax			(17)
Comprehensive income (loss)	$ 13,718	$ 10,607	$ (4,146)

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock Common Class A	Common Stock Common Class B	Additional Paid In Capital.	Treasury Stock Common Class A	Retained Earnings	Accumulated Comprehensive (Loss) Income	Total
Balance at the beginning of the period at Dec. 31, 2012			$ 34,608		$ 5,838	$ (787)	$ 39,659
Consolidated Statements of Changes in Stockholders' Equity
Consummation of the Transaction (April 4, 2013)	$ 1	$ 3	198,992				198,996
Consummation of the Transaction (April 4, 2013) (in shares)	10,991	33,000
Net income (loss)					(4,297)		(4,297)
Issuance of restricted stock			2,102				2,102
Issuance of restricted stock (in shares)	250
Excess of tax benefits related to the issuance of restricted stock			25				25
Stock-based compensation			5,090				5,090
Repurchases of Class A Common Stock				$ (938)			(938)
Other comprehensive income (loss), net of tax						151	151
Balance at the end of the period at Dec. 31, 2013	$ 1	$ 3	240,817	(938)	1,541	(636)	240,788
Balance at the end of the period (in shares) at Dec. 31, 2013	11,241	33,000
Consolidated Statements of Changes in Stockholders' Equity
Net income (loss)					10,557		10,557
Issuance of restricted stock			2,908				2,908
Issuance of restricted stock (in shares)	305
Excess of tax benefits related to the issuance of restricted stock			120				120
Stock-based compensation			3,012				3,012
Repurchases of Class A Common Stock				(1,023)			(1,023)
Exercise of warrants			1				1
Conversion of Class B Common Stock to Class A Common Stock (in shares)	2,973	(2,973)
Other comprehensive income (loss), net of tax						50	50
Balance at the end of the period at Dec. 31, 2014	$ 1	$ 3	246,858	(1,961)	12,098	(586)	256,413
Balance at the end of the period (in shares) at Dec. 31, 2014	14,519	30,027
Consolidated Statements of Changes in Stockholders' Equity
Net income (loss)					13,739		13,739
Issuance of restricted stock			2,522				2,522
Issuance of restricted stock (in shares)	324
Excess of tax benefits related to the issuance of restricted stock			272				272
Stock-based compensation			3,053				3,053
Repurchases of Class A Common Stock				(1,183)			(1,183)
Issuance of Class A Common Stock			5,407				5,407
Issuance of Class A Common Stock (in shares)	479
Repurchase of warrants			(1,778)				(1,778)
Exercise of warrants			60				60
Exercise of warrants (in shares)	5
Exercise of stock options			157				157
Exercise of stock options (in shares)	15
Other comprehensive income (loss), net of tax						(21)	(21)
Balance at the end of the period at Dec. 31, 2015	$ 1	$ 3	$ 256,551	$ (3,144)	$ 25,837	$ (607)	$ 278,641
Balance at the end of the period (in shares) at Dec. 31, 2015	15,342	30,027

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash Flows From Operating Activities:
Net income (loss)	$ 13,739	$ 10,557	$ (4,297)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	17,218	16,552	8,762
Program amortization	11,703	10,370	9,322
Amortization of deferred financing costs	504	507	604
Amortization of original issue discount	382	310	106
Stock-based compensation	5,575	5,920	7,192
Provision for bad debts	920	462	165
Loss on disposition of assets	33	70	199
Loss on early extinguishment of debt		1,116	1,649
Deferred tax expense	(2,838)	(2,264)	1,029
(Increase) decrease in:
Accounts receivable	(1,676)	(7,430)	(1,030)
Programming rights	(12,619)	(9,715)	(10,543)
Due from related parties	(388)	(1,398)
Prepaid expenses and other current assets	3,487	(4,397)	(2,966)
Increase (decrease) in:
Accounts payable	287	610	563
Due to related parties	395	49	(1,005)
Accrued expenses	4,936	3,400	(3,943)
Programming rights payable	452	(1,418)	789
Income tax payable	(25)	(120)	(49)
Other liabilities	107	93	446
Net cash provided by operating activities	42,192	23,274	6,993
Cash Flows From Investing Activities:
Acquisition of cable networks		(101,891)
Proceeds from sale of assets	3	10	16
Capital expenditures	(5,358)	(2,971)	(1,802)
Net cash used in investing activities	(5,355)	(104,852)	(1,786)
Cash Flows From Financing Activities:
Transaction proceeds, net			82,437
Proceeds from long-term debt		70,565	173,250
Repayments of long-term debt	(2,250)	(21,941)	(89,984)
Financing fees		(756)	(3,459)
Proceeds from issuance of stock	5,407
Repurchase of warrants	(1,778)
Exercise of warrants	60	1
Purchase of treasury stock	(1,183)	(1,023)	(938)
Exercise of stock options	157
Excess tax benefits	272	120	25
Net cash provided by financing activities	685	46,966	161,331
Net increase (decrease) in cash	37,522	(34,612)	166,538
Cash:
Beginning	142,010	176,622	10,084
Ending	179,532	142,010	176,622
Cash payments for:
Interest	11,305	11,171	5,419
Income taxes	$ 5,812	$ 4,438	$ 4,034

XML

Nature of Business and Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Nature of Business and Significant Accounting Policies

Nature of Business and Significant Accounting Policies

Note 1. Nature of Business and Significant Accounting Policies

        Nature of business:    The accompanying Consolidated Financial Statements include the accounts of Hemisphere Media Group, Inc. ("Hemisphere" or the "Company"), the parent holding company of Cine Latino, Inc. ("Cinelatino"), WAPA Holdings, LLC (formerly known as InterMedia Español Holdings, LLC) ("WAPA Holdings"), and HMTV Cable, Inc., the parent company of the entities for the acquired networks consisting of Pasiones, TV Dominicana, and Centroamerica TV (see below). Hemisphere was formed on January 16, 2013 for purposes of effecting the transaction, (see Note 2), which was consummated on April 4, 2013. In these notes, the terms "Company," "we," "us" or "our" mean Hemisphere and all subsidiaries included in our Consolidated Financial Statements.

        On April 1, 2014, we acquired the assets of three Spanish-language cable television networks from Media World, LLC, a Florida limited liability company ("Seller"), for $101.9 million in cash. The three acquired cable networks include Pasiones, Centroamerica TV and TV Dominicana. For more information, see Note 2.

        Reclassification:    Certain prior year amounts on the presented consolidated balance sheet have been reclassified to conform with current year presentation with no effect on net income, total assets, total liabilities or stockholders' equity.

        Principles of consolidation:    The consolidated financial statements include our accounts and the accounts of our subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

        Basis of presentation:    The accompanying consolidated financial statements for us and our subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

        Operating segments:    The Company determines its operating segments based upon (i) financial information reviewed by the chief operating decision maker, the Chief Executive Officer, (ii) internal management and related reporting structure and (iii) the basis upon which the chief operating decision maker makes resource allocation decisions. We have one operating segment, Hemisphere.

        Net earnings (loss) per common share:    Basic earnings (loss) per share ("EPS") are computed by dividing income (loss) attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive.

        The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS (amounts in thousands, except per share amounts):

	Years Ended December 31
	2015		2014		2013
Numerator for earnings (loss) per common share calculation:
Net income (loss)	$	13,739	$	10,557	$	(4,297	)
Denominator for earnings (loss) per common share calculation:
Weighted-average common shares, basic		42,840		42,321		31,143
Effect of dilutive securities
Stock options, restricted stock and warrants		962		301		—
Weighted-average common shares, diluted		43,802		42,622		31,143
EPS
Basic	$	0.32	$	0.25	$	(0.14	)
Diluted	$	0.31	$	0.25	$	(0.14	)

        We apply the treasury stock method to measure the dilutive effect of its outstanding warrants, stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income (loss) per common share calculation. Potentially dilutive securities representing 1.0 million, 1.1 million and 0.6 million shares of common stock for the years ended December 31, 2015, 2014 and 2013, respectively, were excluded from the computation of diluted income (loss) per common share for this period because their effect would have been anti-dilutive. The net income (loss) per share amounts are the same for our Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.

        In computing earnings per share, the Company's Nonvoting Stock is considered a participating security. Each share of Nonvoting Stock has identical rights, powers, limitations and restrictions in all respects as each share of common of the Company, including the right to receive the same consideration per share payable in respect of each share of common stock, except that holders of Nonvoting Stock shall have no voting rights or powers whatsoever.

        Revenue recognition:    Revenue related to the sale of advertising and contracted time is recognized at the time of broadcast. Retransmission consent fees and subscriber fees received from cable, telecommunications and satellite operators are recognized in the period in which the services are performed, generally pursuant to multi-year carriage agreements based on the number of subscribers.

        Barter transactions:    The Company engages in barter transactions in which advertising time is exchanged for products or services. Barter transactions are accounted for at the estimated fair value of the products or services received, or advertising time given up, whichever is more clearly determinable. Barter revenue is recognized at the time the advertising is broadcast. Barter expense is recorded at the time the merchandise or services are used and/or received.

        Barter revenue and expense included in the consolidated statements of operations are as follows (amounts in thousands):

	2015			2014			2013
Barter revenue	$	811		$	1,311		$	1,448
Barter expense		(791	)		(1,075	)		(1,360	)
	$	20		$	236		$	88

        Programming costs:    Programming costs are recorded in cost of revenues based on the Company's contractual agreements with various third party programming Distributors which are generally multi-year agreements.

        Stock-based compensation:    We have given equity incentives to certain employees. We account for such equity incentives in accordance with Accounting Standards Codification ("ASC") 718 "Stock Compensation," which requires us to measure compensation cost for equity settled awards at fair value on the date of grant and recognize compensation cost in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. Compensation cost is determined by using either the Monte Carlo simulation model or the Black-Scholes option pricing model.

        Advertising and marketing costs:    The Company expenses advertising and marketing costs as incurred. The Company incurred advertising and marketing costs of $3.5 million, $2.4 million and $1.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

        Cash:    The Company maintains its cash in bank deposit accounts which, at times, may exceed federally-insured limits. The Company has not experienced any losses in such accounts.

        Accounts receivable:Accounts receivable are carried at the original charge amount less an estimate made for doubtful receivables based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer's financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as income when received. The Company considers an account receivable to be past due if any portion of the receivable balance is outstanding for more than 90 days. Changes in the allowance for doubtful accounts for the years ended December 31, 2015, 2014 and 2013 consisted of the following (amounts in thousands):

Year	Description	Beginning of Year		Additions		Write-offs		Recoveries		End of Year
2015	Allowance for doubtful accounts	$	1,073	$	920	$	482	$	1	$	1,512
2014	Allowance for doubtful accounts		651		462		45		5		1,073
2013	Allowance for doubtful accounts		180		519		51		3		651

        Programming rights:    We enter into multi-year license agreements with various programming Distributors for distribution of their respective programming ("programming rights") and capitalize amounts paid to secure or extend these programming rights at the lower of unamortized cost or estimated net realizable value. If management estimates that the unamortized cost of programming rights exceeds the estimated net realizable value, an adjustment is recorded to reduce the carrying value of the programming rights. No such write-down was deemed necessary during the years ended December 31, 2015, 2014 and 2013. Programming rights are amortized over the term of the related license agreements or the number of exhibitions, whichever occurs first. The amortization of these rights, which was $11.7 million, $10.4 million and $9.3 million for the years ended December 31, 2015, 2014 and 2013, respectively, is recorded as part of cost of revenues in the accompanying consolidated statements of operations. Accumulated amortization of the programming rights was $19.7 million and $16.2 million at December 31, 2015 and 2014, respectively. Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast subsequently are considered noncurrent. Program obligations are classified as current or noncurrent in accordance with the payment terms of the license agreement.

        Property and equipment:    Property and equipment are recorded at cost. Depreciation is determined using the straight-line method over the expected remaining useful lives of the respective assets. Useful lives range from 1 - 40 years for improvements, equipment, buildings and towers. Upon retirement or other disposition, the cost and related accumulated depreciation of the assets are removed from the accounts and the resulting gain or loss is reflected in the determination of net income or loss. Expenditures for maintenance and repairs are expensed as incurred. Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

        Goodwill and other intangibles:    The Company's goodwill is recorded as a result of the Company's business combinations using the acquisition method of accounting. Indefinite lived intangible assets include a broadcast license, trademark and tradenames. Other intangible assets include customer relationships, non-compete agreement and affiliate agreements with an estimated useful life of one to ten years. Other intangible assets are amortized over their estimated lives using the straight-line method. Costs incurred to renew or extend the term of recognized intangible assets are capitalized and amortized over the useful life of the asset.

        The Company tests its broadcast license annually for impairment or whenever events or changes in circumstances indicate that such assets might be impaired. The impairment test consists of a comparison of the fair value of these assets with their carrying amounts using a discounted cash flow valuation method, assuming a hypothetical start-up scenario.

        The Company tests its trademarks and tradenames annually for impairment or whenever events or changes in circumstances indicate that such assets might be impaired. The test consists of a comparison of the fair value of these assets with the carrying amounts utilizing an income approach in the form of the royalty relief method, which measure the cost savings that a business enjoys since it does not have to pay a royalty rate for the use of a particular domain name and brand.

        The Company tests its goodwill annually for impairment or whenever events or changes in circumstances indicate that goodwill might be impaired. The first step of the goodwill impairment test compares the fair value of each reporting unit with its carrying amount, including goodwill. The fair value of the reporting units are determined through the use of a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates.

        The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company and prevailing values in the broadcast and cable markets. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of that goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss shall be recognized in an amount equal to that excess.

        The Company tests its other finite lived intangible asset annually for impairment or whenever events or changes in circumstances indicate that such asset or asset group might be impaired. This analysis is performed by comparing the respective carrying value of the asset group to the current and expected future cash flows, on an undiscounted basis, to be generated from such asset group. If such analysis indicates that the carrying value of this asset group is not recoverable, the carrying value of such asset group is reduced to fair value.

        Deferred financing costs:    Deferred financing costs are recorded net of accumulated amortization. Amortization is calculated on the effective-interest method over the term of the applicable loan. Amortization of deferred financing costs was $0.5 million, $0.5 million and $0.6 million, which is included in interest expense, net in the accompanying consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, respectively. Accumulated amortization of deferred financing costs was $1.0 million and $0.5 million at December 31, 2015 and 2014, respectively.

        Income taxes:    Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

        We record foreign withholding tax, which is withheld by foreign customers from their remittances to us, on a gross basis as a component of income taxes and separate from revenue in the consolidated statement of operations.

        We follow the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods. To the extent that interest and penalties are assessed by taxing authorities on any underpayment of income taxes, such amounts are accrued and classified as a component of income tax expense.

        Fair value of financial instruments:    The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The carrying value of the long-term debt approximates fair value because this instrument bears interest at a variable rate, is pre-payable, and is at terms currently available to the Company.

        Generally accepted accounting principles establish a framework for measuring fair value and expanded disclosures about fair value measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories:

Level 1—inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.

Level 2—inputs to the valuation methodology include quoted prices in markets that are not active or quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—inputs to the valuation methodology are unobservable, reflecting the entity's own assumptions about assumptions market participants would use in pricing the asset or liability.

        The categorization of an asset or liability within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

        The Company's programming rights and goodwill are classified as Level 3 in the fair value hierarchy, as they are measured at fair value on a non-recurring basis and are adjusted to fair value only when the carrying values exceed their fair values. For the years ended December 31, 2015, 2014 and 2013 there were no adjustments to fair value.

        The Company's variable-rate debt is classified as Level 2 in the fair value hierarchy, as its estimated fair value is derived from quoted market prices by independent dealers. The carrying value of the long-term debt approximates fair value at December 31, 2015 and 2014.

        Major customers and suppliers:    One of our Distributors accounted for more than 10% of our total net revenues for the year ended December 31, 2015. There were no other Distributors or other customers that accounted for more than 10% of revenue in any year. Our Networks are provided to these Distributors pursuant to affiliation agreements with varying terms.

        Recent accounting pronouncements:    In May 2014, the Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue, and by reducing the number of standards to which an entity has to refer. In July 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The updated accounting guidance provides companies with alternative methods of adoption. We are currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial statements and our method of adoption.

        FASB has issued Accounting Standards Update ("ASU") 2015-15 Interest-Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This ASU adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issue Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. In April 2015, the FASB issued update, ASU 2015-03 Interest—Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We will adopt the guidance in the first quarter of 2016, with the impact to our consolidated statement of position to be a reduction in assets where deferred costs are currently disclosed, and a reduction to long-term debt where these costs will be recorded after the transition.

        On November 20, 2015, FASB issued ASU 2015-17- Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The ASU simplifies the presentation of deferred income taxes, requiring that deferred income tax liabilities and assets be classified as non-current in the statement of financial position. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively or retrospectively to all periods presented. In the period of the change, the entity should disclose the nature of and reason for the change in accounting principle and the quantitative information about the effects of the accounting change on prior periods. We have early adopted this guidance in the fourth quarter 2015. Prior periods have not been restated. See Note. 6 Income Taxes.

        In January 2016, the FASB issued ASU 2016-01—Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other provisions, the new guidance requires the fair value measurement of investments in certain equity securities. For investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices minus impairment. All changes in measurement will be recognized in net income. The guidance will be effective for the first interim period of our 2019 fiscal year. Early adoption is not permitted, except for certain provisions relating to financial liabilities. We are currently evaluating the impact of the new standard.

        Use of estimates:    In preparing these consolidated financial statements, management had to make estimates and assumptions that affected the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the balance sheets date, and the reported revenues and expenses for the years then ended. Such estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. However, actual results could differ from those estimates.

XML

Business Combination

12 Months Ended

Dec. 31, 2015

Business Combination

Business Combination

Note 2. Business Combination

        On April 1, 2014, we closed on the acquisition of the net assets of the Spanish-language television network business of the Seller (the "Cable Networks Acquisition"), which is comprised of Pasiones, Centroamerica TV and TV Dominicana, which we refer to as the Acquired Cable Networks. The Acquired Cable Networks are highly complementary to our existing television networks, and build on our commitment to provide unique programming focused on the U.S. Hispanic market. The purchase price for the Cable Networks Acquisition and certain agreements entered into with the Seller contemporaneously with the business combination was $101.9 million, and was funded with cash on hand. The Cable Networks Acquisition was accounted for by applying the acquisition method, which requires the determination of the fair value of the consideration transferred, the fair value of the assets and liabilities of the acquiree, and the measurement of goodwill pursuant to ASC Topic 805-10, "Business Combinations-Overall". Costs incurred in connection with the Cable Networks Acquisition are included in other expenses and totaled $1.2 million, of which $0.9 million was recorded in the fourth quarter of 2013, with the balance recorded in 2014.

        The following table summarizes the estimated fair values of the assets acquired, liabilities assumed and resulting goodwill in the Cable Networks Acquisition (amounts in thousands):

Other assets	$	177
Intangible asset—affiliate agreements		46,014
Intangible asset—brands		15,986
Intangible asset—advertiser relationships		3,310
Intangible assets—other		648
Other liabilities		(2,123	)
Fair value of identifiable net assets acquired		64,012
Goodwill		34,093
Total	$	98,105

        In addition to the above identifiable assets, the estimated fair values of a non-compete agreement entered into with the Seller and a consulting agreement with certain Seller executives are $3.3 million and $0.5 million, respectively, which are accounted for separately from the Cable Networks Acquisition. We finalized the accounting for the Cable Networks Acquisition in the second quarter of 2014.

        The estimated fair value of the affiliate agreements of $46.0 million was determined using a discounted cash flow method utilizing an 8.5% discount rate. This intangible asset will be amortized on a straight-line basis over eight years. The estimated fair value of the television network brands of $16.0 million was determined using a discounted cash flow method based on a royalty rate of 5% and utilizing an 8.5% discount rate. This intangible asset was determined to be indefinite-lived given the strong association of the brand with the content appearing on the networks and their respective target audiences. The estimated fair values of the advertiser relationships and non-compete agreement of $3.3 million each were determined using a discounted cash flow method utilizing an 8.5% discount rate and will be amortized on a straight-line basis over six years. All other intangibles of $1.1 million will be amortized over a period of one year or less.

        Goodwill of $34.1 million is the excess of the net consideration transferred over the fair value of the identifiable net assets acquired, and primarily represents the benefits we expect to realize from the Cable Networks Acquisition and the synergistic opportunities with our existing networks. The goodwill associated with the transaction is deductible for tax purposes.

XML

Related Party Transactions

12 Months Ended

Dec. 31, 2015

Related Party Transactions

Related Party Transactions

Note 3. Related Party Transactions

        The Company has various agreements MVS Multivision Digital S. de R.L. de C.V. and its affiliates (collectively "MVS"), a Mexican media and television conglomerate, which have directors and stockholders in common with the Company as follows:

· An agreement through August 1, 2017 pursuant to which MVS provides Cinelatino with satellite and support services including origination, uplinking and satellite delivery of two feeds of Cinelatino's channel (for U.S. and Latin America), master control and monitoring, dubbing, subtitling and close captioning, and other support services (the "Satellite and Support Services Agreement"). This agreement was amended on May 20, 2015, to expand the services MVS provides to Cinelatino to include commercial insertion and editing services to support advertising sales on Cinelatino's U.S. feed. Total expenses incurred were $2.3 million, $2.1 million and $1.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, and are included in cost of revenues.

· A ten-year master license agreement through July 2017, which grants MVS the non-exclusive right (except with respect to pre-existing distribution arrangements between MVS and third party distributors that are effective at the time of the consummation of the Transaction) to duplicate, distribute and exhibit Cinelatino's service via cable, satellite or by any other means in Latin America and in Mexico to the extent that Mexico distribution is not owned by MVS. Pursuant to the agreement, Cinelatino receives revenue net of MVS's distribution fees, which is presently equal to 13.5% of all license fees collected from distributors in Latin America and Mexico. Total revenues recognized were $5.1 million, $4.2 million and $2.7 million for the years ended December 31, 2015, 2014 and 2013, respectively. MVS has terminated the agreement effective February 29, 2016.

· An affiliation agreement through August 1, 2017 for the distribution and exhibition of Cinelatino's programming service through Dish Mexico (dba Commercializadora de Frecuencias Satelitales, S de R.L. de C.V.), an MVS affiliate that transmits television programming services throughout Mexico. Total revenues recognized were $2.0 million, $1.9 million and $1.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

· An affiliation agreement, effective July 2015 through January 2018 for the distribution and exhibition of Pasiones' Latin American programming service through Dish Mexico (dba Comercializadora de Frecuencias Satelitales, S de R.L. de C.V.), an MVS affiliate that transmits television programming services throughout Mexico. Total revenues recognized were $0 for the year ended December 31, 2015.

· In November 2015, we licensed programming from MVS. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.0 million for the year ended December 31, 2015. At December 31, 2015 $0.0 million is included in programming rights related to this agreement.

· In November 2013, we licensed six movies from MVS. Expenses incurred under this agreement are included in cost of revenues and amounted to $0.0 million for the years ended December 31, 2015, 2014, and 2013. At December 31, 2015 and 2014, $0.1 million is included in programming rights related to this agreement.

        Amounts due from MVS pursuant to the agreements noted above, amounted to $1.7 million and $1.3 million at December 31, 2015 and 2014, respectively, and are remitted monthly. Amounts due to MVS pursuant to the agreements noted above amounted to $1.1 million and $0.7 million at December 31, 2015 and 2014, respectively, and are remitted monthly.

        We entered into a three-year consulting agreement effective April 9, 2013 with James M. McNamara, a member of the Company's board of directors, to provide the development, production and maintenance of programming, affiliate relations, identification and negotiation of carriage opportunities, and the development, identification and negotiation of new business initiatives including sponsorship, new channels, direct-to-consumer programs and other interactive initiatives. Total expenses incurred under these agreements are included in selling, general and administrative expenses and amounted to $0.2 million for each of the years ended December 31, 2015, 2014 and 2013. Amounts due this related party totaled $0 and $0.1 million at December 31, 2015 and 2014, respectively.

        We have entered into programming agreements with Panamax Films, LLC ("Panamax"), an entity owned by James M. McNamara for the licensing of three specific movie titles. Expenses incurred under this agreement are included in cost of revenues in the accompanying consolidated statements of operations, and amounted to $0.0 million for each of the years ended December 31, 2015, 2014 and 2013. At December 31, 2015 and 2014, $0.1 million and $0.2 million, respectively, is included in other assets in the accompanying consolidated balance sheets as prepaid programming related to these agreements.

        During 2013, we engaged Pantelion to assist in the licensing of a feature film in the United States. Pantelion is a joint venture made up of several organizations, including Panamax Films, LLC ("Panamax"), Lions Gate Films Inc. ("Lions Gate") and Grupo Televisa. Panamax is owned by James McNamara, who is also the Chairman of Pantelion. We agreed to pay to Pantelion, in connection with their services, up to 12.5% of all "licensing revenues". Total licensing revenues are included in net revenues in the accompanying consolidated statements of operations and amounted to $0.0 million for the years ended December 31, 2015, 2014 and 2013. Total expenses incurred are included in cost of revenues in the accompanying consolidated statements of operations and amounted to $0.0 million for each of the years ended December 31, 2015 and 2014, and $0.3 million for the year ended December 31, 2013. Amounts due Pantelion at December 31, 2015 and 2014 totaled $0. In October 2015, Pantelion purchased advertising time on one of our channels, which amounted to $0.0 million, net of commission.

        Effective February 1, 2015, we entered into a licensing agreement to license the rights to fourteen (14) motion pictures from Lions Gate for a total license fee of $0.8 million. Some of the fourteen titles are owned by Pantelion, for which Lions Gate acts as Pantelion's exclusive licensing agent. Fees paid by Cinelatino to Lions Gate may be remunerated to Pantelion in accordance with their financial arrangements. Expenses incurred under this agreement are included in cost of revenues in the accompanying consolidated statements of operations, and amounted to $0.2 million for the year ended December 31, 2015. At December 31, 2015, $0.2 million is included in programming rights in the accompanying consolidated balance sheets related to this agreement.

        We entered into a services agreement with InterMedia Advisors, LLC ("IMA") which has officers, directors and stockholders in common with the Company for services including, without limitation, office space and operational support pursuant to a reimbursement agreement with IMA's affiliate, InterMedia Partners VII, L.P. Amounts due to this related party amounted to $0.0 million at December 31, 2015 and 2014. Amounts receivable from the related party and amounts due to the related party are included in selling, general and administrative expenses, netted to $0.0 million for each of the years ended December 31, 2015, 2014 and 2013.

XML

Property and Equipment

12 Months Ended

Dec. 31, 2015

Property and Equipment

Property and Equipment

Note 4. Property and Equipment

        Property and equipment at December 31, 2015 and 2014 consists of the following (amounts in thousands):

	2015			2014
Land and improvements	$	8,724		$	8,724
Building		9,399			7,066
Equipment		24,312			23,270
Towers		5,484			5,433
		47,919			44,493
Less: accumulated depreciation		(26,103	)		(22,969	)
		21,816			21,524
Equipment installations in progress		3,581			2,343
	$	25,397		$	23,867

        Depreciation expense was $3.7 million, $3.8 million and $3.8 million for the years ended December 31, 2015, 2014 and 2013, respectively.

XML

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets

Goodwill and Intangible Assets

Note 5. Goodwill and Intangible Assets

        Goodwill and intangible assets consist of the following at December 31, 2015 and 2014 (amounts in thousands):

	December 31,
	2015		2014
Broadcast license	$	41,356	$	41,356
Goodwill		164,887		164,887
Other intangibles		78,185		91,611
Total intangible assets	$	284,428	$	297,854

        A summary of changes in the Company's goodwill and other indefinite lived intangible assets, on a net basis, for the years ended December 31, 2015 and 2014 is as follows (amounts in thousands):

	Net Balance at December 31, 2014		Additions		Impairment		Net Balance at December 31, 2015
Broadcast license	$	41,356	$	—	$	—	$	41,356
Goodwill		164,887		—		—		164,887
Brands		15,986		—		—		15,986
Other intangibles		700		—		—		700
Total indefinite-lived intangibles	$	222,929	$	—	$	—	$	222,929

	Net Balance at December 31, 2013		Additions		Impairment		Net Balance at December 31, 2014
Broadcast licenses	$	41,356	$	—	$	—	$	41,356
Goodwill		130,794		34,093		—		164,887
Brands		—		15,986		—		15,986
Other intangibles		700		—		—		700
Total indefinite-lived intangible	$	172,850	$	50,079	$	—	$	222,929

        A summary of the changes in the Company's other amortizable intangible assets for the years ended December 31, 2015 and 2014 is as follows (amounts in thousands):

	Net Balance at December 31, 2014		Additions		Amortization			Net Balance at December 31, 2015
Affiliate relationships	$	69,064	$	—	$	(12,298	)	$	56,766
Advertiser relationships		2,896		—		(552	)		2,344
Non-compete agreement		2,882		—		(549	)		2,333
Other intangibles		83		65		(92	)		56
Total Finite-lived intangibles	$	74,925	$	65	$	(13,491	)	$	61,499

	Net Balance at December 31, 2013		Additions		Amortization			Net Balance at December 31, 2014
Affiliate relationships	$	33,910	$	46,014	$	(10,860	)	$	69,064
Advertiser relationships		—		3,310		(414	)		2,896
Non-compete agreement		—		3,294		(412	)		2,882
Other intangibles		—		1,140		(1,057	)		83
Total finite-lived intangibles	$	33,910	$	53,758	$	(12,743	)	$	74,925

        The aggregate amortization expense of the Company's amortizable intangible assets was $13.5 million, $12.7 million and $5.0 million for the years ended December 31, 2015, 2014 and 2013. The weighted average remaining amortization period is 5.1 years at December 31, 2015. Future estimated amortization expense is as follows (amounts in thousands):

Year Ending December 31,	Amount
2016	$	13,421
2017		13,248
2018		13,182
2019		8,432
2020 and thereafter		13,216
	$	61,499

XML

Income Taxes

12 Months Ended

Dec. 31, 2015

Income Taxes

Income Taxes

Note 6. Income Taxes

        For the years ended December 31, 2015, 2014 and 2013, Income before provision for income taxes, includes the following components (amounts in thousands):

	2015		2014		2013
Domestic income	$	9,663	$	6,764	$	(1,301	)
Foreign income		13,118		6,222		134
	$	22,781	$	12,986	$	(1,167	)

        For the years ended December 31, 2015, 2014 and 2013, income tax expense is composed of the following (amounts in thousands):

	2015			2014			2013
Current income tax expense	$	11,880		$	4,693		$	2,101
Deferred income tax (benefit) expense		(2,838	)		(2,264	)		1,029
	$	9,042		$	2,429		$	3,130

        Current tax expense for the years ended December 31, 2015, 2014 and 2013 includes $1.5 million, $1.1 million and $0.6 million of foreign withholding tax, respectively.

        For the years ended December 31, 2015, 2014 and 2013 the Company's income tax expense and effective tax rates were as follows:

	2015			2014			2013
Pre-tax book income—US Only		35.0	%		35.0	%		34.0	%
Pre-tax book income—PR Only		20.2	%		16.9	%		–3.9	%
Permanent items		4.0	%		3.2	%		–164.6	%
Return to provision true-ups—Current/Deferred		–1.4	%		–3.8	%		27.9	%
Foreign rate differential		2.2	%		3.4	%		–7.4	%
Foreign tax credits		–24.5	%		–31.1	%		90.2	%
Current/Deferred—rate difference		0.0	%		0.0	%		0.9	%
Change in valuation allowance		0.0	%		–19.6	%		–212.6	%
Foreign withholding taxes		6.7	%		8.9	%		0.0	%
Deferred foreign tax credit offset		–2.2	%		4.0	%		–20.4	%
State taxes and state rate change		–0.3	%		1.9	%		146.9	%
Federal rate change		0.0	%		0.0	%		–152.8	%
		39.7	%		18.8	%		–261.8	%

        For the year ended December 31, 2015, the items that significantly affect the differences between the tax provision calculated at the statutory federal income tax rate and the actual tax benefit recorded relate to increases in taxes in Puerto Rico and foreign withholding taxes that will generate offsetting U.S. foreign tax credits.

        For the year ended December 31, 2014, the items that significantly affect the differences between the tax provision calculated at the statutory federal income tax rate and the actual tax benefit recorded relate to increases in taxes in Puerto Rico that will generate offsetting U.S. foreign tax credits and the reduction of the valuation allowance.

        For the year ended December 31, 2013, the items that significantly affect the differences between the tax provision calculated at the statutory federal income tax rate and the actual tax benefit recorded relate to permanent differences related to non-deductible expenses in conjunction with the Transaction, increases in taxes in Puerto Rico that will not generate offsetting U.S. foreign tax credits and the change in the valuation allowance.

        The Company may be audited by federal, state and local tax authorities, and from time to time these audits could result in proposed assessments. The Company has open tax years from 2012 forward for federal and state tax purposes. During 2015, the Company received a notice that the Hemisphere Media Group, Inc., 2013 tax return was selected for examination by the IRS. As of the date of filing, the examination has not commenced.

        Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities calculated for financial reporting purposes and the amounts calculated for preparing its income tax returns in accordance with tax regulations and the net tax effects of operating loss and tax credits carried forward. Net deferred tax liabilities consist of the following components as of December 31, 2015 and 2014 (amounts in thousands):

	2015			2014
Deferred tax assets:
Allowances for doubtful accounts	$	1,976		$	1,091
Deferred branch tax benefit		15,813			16,592
Deferred income		29			31
Fixed assets		39			—
Accrued expenses		1,440			3,299
Foreign tax credit		5,572			2,592
Stock compensation		3,465			2,918
Pension		651			1,041
Intangibles		2,376			2,651
		31,361			30,215
Deferred tax liabilities:
Prepaid expenses		(196	)		(200	)
Intangibles		(23,000	)		(25,807	)
Property and equipment		(3,098	)		(4,032	)
Amortization expense		(9,715	)		(7,624	)
Total deferred tax liabilities		(36,009	)		(37,663	)
	$	(4,648	)	$	(7,448	)

        The deferred tax amounts mentioned above have been classified on the accompanying consolidated balance sheets at December 31, 2015 and 2014 as follows (amounts in thousands):

	2015		2014
Current assets	$	—	$	4,222
Non-current assets	$	13,280	$	—
Non-current liabilities	$	17,928	$	11,670

        In the fourth quarter of 2015, we prospectively adopted ASU-2015-17—Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. To provide greater clarity in the presentation and timing of utilization of both deferred tax assets and liabilities, we have elect to early adopt this ASU by tax jurisdiction. If we had adopted this ASU retrospectively, current deferred tax assets would have been reclassified to $9.8 million of non-current deferred tax assets and $17.3 million of non-current deferred tax liabilities.

        At December 31, 2015 and 2014, the Company has foreign tax credit carryforwards for U.S. federal purposes and foreign minimum credits totaling $5.6 million and $ 2.6 million, respectively, which expire during the years 2021 through 2025.

        Upon audit, taxing authorities may prohibit the realization of all or part of an uncertain tax position. While the Company has no history of tax audits, the Company regularly assesses the outcome of potential examinations in each of the tax jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. The Company recognizes interest and penalties related to uncertain tax positions, if any, in income tax expense. As of December 31, 2015, the Company has uncertain tax position reserves of $0.3 million and recorded related interest expense of $0.0 million. During 2014, the Company identified an uncertain tax position and recorded a liability of $0.7 million with an offsetting deferred tax asset. The company accrued no interest related to this item.

XML

Long-Term Debt

12 Months Ended

Dec. 31, 2015

Long-Term Debt

Long-Term Debt

Note 7. Long-Term Debt

        Long-term debt as of December 31, 2015 and 2014 consists of the following (amounts in thousands):

	December 31, 2015			December 31, 2014
Senior Notes due July 2020	$	219,923		$	221,791
Less: Current portion		(8,278	)		(2,250	)
	$	211,645		$	219,541

        On July 30, 2013 certain of our subsidiaries (the "Borrowers") entered into a credit agreement providing for a $175.0 million senior secured term loan B facility (the "Term Loan Facility") which matures on July 30, 2020. On July 31, 2014, certain of our subsidiaries amended the Term Loan Facility (the "Amended Term Loan Facility") which provides for an aggregate principal amount of $225.0 million and matures on July 30, 2020. Pricing on the Amended Term Loan Facility was set at LIBOR plus 400 basis points (decreased from a margin of 500 basis points) subject to a LIBOR floor of 1.00% (decreased from a LIBOR floor of 1.25%), resulting in an effective interest rate 5.00%, and 0.5% of original issue discount ("OID"). The Amended Term Loan Facility also provides an uncommitted accordion option (the "Incremental Facility") allowing for additional borrowings under the Amended Term Loan Facility up to an aggregate principal amount equal to (i) $40.0 million plus (ii) an additional amount of up to 4.0x first lien net leverage. The obligations under the Amended Term Loan Facility are guaranteed by HMTV, LLC, our direct wholly-owned subsidiary, and all of our existing and future subsidiaries (subject to certain exceptions in the case of immaterial subsidiaries). Additionally, the Amended Term Loan Facility provides for an uncommitted incremental revolving loan option in an aggregate principal amount of up to $20.0 million, which shall be secured on a pari passu basis by the collateral securing the Amended Term Loan Facility. The Amended Term Loan Facility is secured by a first-priority perfected security interest in substantially all of our assets.

        The proceeds of the Amended Term Loan Facility, were used to pay fees and expenses associated with the Cable Networks Acquisition, and for general corporate purposes including potential future acquisitions. The OID of $1.7 million, net of accumulated amortization of $0.7 million at December 31, 2015, was recorded as a reduction to the principal amount of the Amended Term Loan Facility outstanding and will be amortized as a component of interest expense over the term of the Amended Term Loan Facility. We recorded $2.3 million of deferred financing costs associated with the Term Loan Facility, as amended, net of accumulated amortization of $1.0 million at December 31, 2015, which will be amortized utilizing the effective interest rate method over the remaining term of the Amended Term Loan Facility. In July 2014, we recorded a $1.1 million loss on early extinguishment of debt; $0.7 million related to deferred costs and $0.4 million related to OID. Additionally, we incurred $1.0 million of deferred financing costs related to the Amended Term Loan Facility in accordance with ASC 470—Debt, which is included in Other Expenses on the accompanying Consolidated Statement of Operations.

        The Amended Term Loan Facility principal payments are payable on quarterly due dates commencing September 30, 2014, with a final installment on July 30, 2020.

        In addition, pursuant to the terms of the Amended Term Loan Facility, within 90 days after the end of each fiscal year (commencing with the fiscal year ending December 31, 2015), the Borrowers are required to make a prepayment of the loan principal in an amount equal to 50% of the excess cash flow of the most recently completed fiscal year. Excess cash flow is generally defined as net income plus depreciation and amortization expense, less mandatory prepayments of the term loan, interest charges, income taxes and capital expenditures, and adjusted for the change in working capital. The percentage of the excess cash flow used to determine the amount of the prepayment of the loan declines from 50% to 25% and again to 0% at lower leverage ratios.

        The excess cash flow as defined in the Term Loan Facility will require a payment of approximately $8.3 million, which will be paid upon filing of this Form 10-K in March 2016. As permitted under the Term Loan Facility, the excess cash flow payment will be allocated at our election and in direct order of maturity, accordingly, we will not be required to make the scheduled quarterly loan amortization payments for several quarters. As a result, the excess cash flow payment will represents the current portion of long-term debt net of OID shown on the balance sheet as of December 31, 2015.

        Following are maturities of long-term debt, at December 31, 2015 (amounts in thousands):(a)

Year Ending December 31,
2016	$	8,278
2017		—
2018		—
2019		722
2020		212,625
	$	221,625

(a)           Table does not consider any future excess cash payments.

XML

Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Stockholders' Equity

Stockholders' Equity

Note 8. Stockholders' Equity

Capitalization

        On April 4, 2013, the merger by and among Cinelatino, WAPA Holdings and Azteca providing for the acquisition of Cinelatino and the combination of WAPA Holdings and Azteca as indirect, wholly-owned subsidiaries of Hemisphere (the "Transaction") was consummated.

        In connection with the Transaction (i) the holders of Cinelatino common stock and the holder of membership interests in WAPA Holdings (the "Cinelatino/WAPA Investors") surrendered their respective interests and received an aggregate of 33,000,000 shares of Hemisphere Class B common stock, par value $0.0001 ("Class B common stock")(of which 1.5 million Class B Common Stock is subject to forfeiture if the market price of shares of Hemisphere Class A common stock does not reach certain levels), a cash payment equal to an aggregate of $5.0 million, and purchased 2,333,334 warrants from Azteca founders to purchase Hemisphere Class A common stock, par value $0.0001 (such warrants, "Warrants" and such stock, "Class A common stock"); (ii) each share of Azteca common stock was automatically converted into one share of Class A common stock; (iii) each Amended Azteca Warrant, as defined below, was automatically converted into an equal number of Warrants; and (iv) immediately prior to the consummation of the Transaction, Azteca Acquisition Holdings, LLC and certain existing shareholders of Azteca contributed 250,000 shares of Azteca common stock to Azteca for cancellation and agreed to subject an additional 250,000 shares of Class A common stock to certain forfeiture provisions (a total of 503,788 shares of Class A common stock is subject to forfeiture) if the market price of shares of Hemisphere Class A common stock does not reach certain levels. Following the consummation of the Transaction, there were 10,991,100 shares of Class A stock outstanding and 33,000,000 shares of Hemisphere Class B stock outstanding. Subsequent to the Transaction, an additional 250,000 shares of Class A restricted stock were issued. From time to time the Company has issued Class A common stock to certain members of management and board of directors as equity compensation, subject to time and performance vesting conditions, as discussed below.

        In December 2014, a shareholder of Class B common stock transferred 3.0 million shares of Class B common stock to a third party. As a result, the Class B common stock was automatically converted to Class A common stock.

        As of the filing date of this Form 10-K, the last sale price of the Company's Class A Common Stock has not equaled or exceeded $15.00 per share (as adjusted for stock splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 36 months following April 4, 2013. As a result, approximately 379,000 Class A Common shares have been forfeited.

        In the event the last sale price of the Class A Common Stock does not equal or exceed $15.00 per share (as adjusted for stock splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within at least one 30-trading day period within 60 months following April 4, 2013, Class A Common shares totaling 0.1 million and Class B Common Shares totaling 1.5 million will be forfeited.

Voting

        Class B common stock votes on a 10 to 1 basis with the Class A common stock, which means that each share of Class B common stock will have 10 votes and each share of Class A common stock will have 1 vote. The Class B common stock shall be convertible in whole or in part at any time at the option of the holder or holders thereof, into an equal number of Class A common stock.

Equity Incentive Plans

        An aggregate of 4.0 million shares of our Class A common stock were authorized for issuance under the terms of the Hemisphere Media Group, Inc. 2013 Equity Incentive Plan (the "2013 Equity Incentive Plan). At December 31, 2015, 0.8 million shares remained available for issuance of stock options or other stock-based awards under our Equity Incentive Plan (including shares of restricted Class A common stock surrendered to the Company in payment of taxes required to be withheld in respect of vested shares of restricted Class A common stock and available for issuance). The expiration date of the 2013 Equity Incentive Plan, on and after which date no awards may be granted, is April 4, 2023. The Company's board of directors administers the 2013 Equity Incentive Plan, and has the sole and plenary authority to, among other things: (i) designate participants; (ii) determine the type, size, and terms and conditions of awards to be granted; (iii) determine the method by which an award may be settled, exercised, canceled, forfeited, or suspended.

        The Company's time-based restricted stock awards and option awards generally vest in three equal annual installments beginning on the first anniversary of the grant date, subject to the grantee's continued employment or service with the Company. The Company's event-based restricted stock awards and option awards generally vest either upon the Company's Class A common stock attaining a $15.00 closing price per share, as quoted on the NASDAQ Global Market, on at least 10 trading days, subject to the grantee's continued employment or service with the Company. Other event-based restricted stock awards granted to certain members of our Board vest on the day preceding the Company's annual shareholder meeting.

Stock-Based Compensation

        Stock-based compensation expense related to stock options and restricted stock was $5.6 million, $5.9 million and $7.2 million for the years ended December 31, 2015, 2014, and 2013, respectively. At December 31, 2015, there was $2.3 million of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.1 years. At December 31, 2015, there was $3.7 million of total unrecognized compensation cost related to non-vested restricted stock, which is expected to be recognized over a weighted-average period of 0.9 years.

Stock Options

        The fair value of stock options granted is estimated at the date of grant using the Black-Scholes pricing model for time-based options and the Monte Carlo simulation model for event-based options. The expected term of options granted is derived using the simplified method under ASC 718-10-S99-1/SEC Topic 14.D for "plain vanilla" options and the Monte Carlo simulation for event-based options. Expected volatility is based on the historical volatility of the Company's competitors given its lack of trading history. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has estimated forfeitures of 1.5%, as the awards are to management for which the Company expects lower turnover, and has assumed no dividend yield, as dividends have never been paid to stock or option holders and will not be paid for the foreseeable future.

Black-Scholes Option Valuation Assumptions	2015	2014	2013
Risk-free interest rate	1.76% - 2.12%	1.76% - 1.92%	0.93% - 2.03%
Dividend yield	—	—	—
Volatility	25.8% - 29.5%	28.4% - 30.9%	34.4% - 36.7%
Weighted-average expected term (years)	6.3	6.0 - 6.3	6.0

        The following table summarizes stock option activity for the years ended December 31, 2015, 2014 and 2013 (shares and intrinsic values in thousands):

	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual term		Aggregate intrinsic value
Outstanding at January 1, 2013
Granted		1,730		$	11.20		9.3	$	1,157
Exercised		—			—		—		—
Forfeited or expired		—			—		—		—
Outstanding at December 31, 2013		1,730		$	11.20		9.3	$	2,208
Granted		140		$	11.56		9.7		—
Exercised		—			—		—		—
Forfeited or expired		—			—		—		—
Outstanding at December 31, 2014		1,870		$	11.23		8.4	$	4,721
Granted		215		$	13.61		6.2		—
Exercised		(15	)		10.60		—		—
Forfeited or expired		(27	)		10.60		—		—
Outstanding at December 31, 2015		2,043		$	11.49		7.6	$	6,740
Vested at December 31, 2015		1,065		$	11.33		7.3	$	3,696
Exerciseable at December 31, 2015		1,065		$	11.33		7.3	$	3,696

        The weighted average grant date fair value of options granted for the years ended December 31, 2015, 2014 and 2013 was $4.13, $3.75 and $4.21. At December 31, 2015, 0.3 million options granted are unvested, event-based options.

Restricted Stock

        Certain employees and directors have been awarded restricted stock under the 2013 Equity Incentive Plan. The time-based restricted stock grants vest primarily over a period of three years. The fair value and expected term of event-based restricted stock grants is estimated at the grant date using the Monte Carlo simulation model.

        The following table summarizes restricted share activity for the years ended December 31, 2015, 2014 and 2013 (shares in thousands):

	Number of shares			Weighted-average grant date fair value
Outstanding at January 1, 2013		—			—
Granted		1,195		$	9.81
Vested		(250	)	$	8.41
Forfeited		—			—
Outstanding at December 31, 2013		945		$	10.18
Granted		79			11.34
Vested		(305	)		11.33
Forfeited		—			—
Outstanding at December 31, 2014		719		$	9.82
Granted		99		$	12.42
Vested		(324	)		10.65
Forfeited		—			—
Outstanding at December 31, 2015		494		$	9.79

        At December 31, 2015, 0.2 million shares of restricted stock issued are unvested, event-based shares.

Warrants

        In connection with the capitalization of the Company noted above, the Company has issued 14.7 million warrants, which qualify as equity instruments. Each warrant entitles the holder to purchase one-half of the number of shares of our Class A common stock at a price of $6.00 per half share. At December 31, 2015, 13.3 million warrants were issued and outstanding, which are exercisable into 6.7 million shares of our Class A common stock. Warrants are only exercisable for a whole number of shares of common stock (i.e. only an even number of warrants may be exercised at any given time by a registered holder). As a result, a holder must exercise at least two warrants, at an effective exercise price of $12.00 per warrant. At the option of the Company, 8.7 million warrants may be called for redemption, provided that the last sale price of our Class A common stock reported has been at least $18.00 per share on each of twenty trading days within the thirty-day period ending on the third business day prior to the date on which notice of redemption is given. The warrants expire on April 4, 2018. In December 2015, we repurchased 1.3 million warrants from a single holder in a privately negotiated transaction for a total cost of $1.8 million.

        During the year ended December 31, 2015, we issued 5,000 shares of our Class A common stock upon the exercise of 10,000 warrants for total exercise proceeds of $0.1 million.

XML

Contingencies

12 Months Ended

Dec. 31, 2015

Contingencies

Contingencies

Note 9. Contingencies

        The Company is involved in various legal actions, generally related to its operations. Management believes, based on advice from legal counsel, that the outcome of such legal actions will not adversely affect the financial condition of the Company.

XML

Commitments

12 Months Ended

Dec. 31, 2015

Commitments

Commitments

Note 10. Commitments

        The Company has entered into certain rental property contracts with third parties, which are accounted for as operating leases. Rental expense was $0.6 million, $0.3 million and $0.2 million for the years ended December 31, 2015, 2014 and 2013, respectively

        The Company has certain commitments including various operating leases.

        Future minimum payments for these commitments and other commitments, primarily programming, are as follows (amounts in thousands):

Year Ending December 31,	Operating Leases		Other Commitments		Total
2016	$	296	$	7,093	$	7,389
2017		388		3,413		3,801
2018		383		2,561		2,944
2019		335		1,260		1,595
2020 and thereafter		1,150		631		1,781
Total	$	2,552	$	14,958	$	17,510

XML

Retirement Plans

12 Months Ended

Dec. 31, 2015

Retirement Plans

Retirement Plans

Note 11. Retirement Plans

        WAPA, a wholly owned subsidiary of the Company, makes contributions to the Televicentro de Puerto Rico Special Retirement Benefits (the "Retirement Plan"). The Retirement Plan is available to all reporters and union employees after completing three (3) months of service. Eligible employees, those meeting active service minimums and minimum age requirements, are eligible to receive a one-time lump sum payment at retirement, of two (2) weeks per year of service capped at a maximum payment of forty-five (45) weeks. The number of retirees is capped at five (5) per year. There are 164 participants in the Retirement Plan.

        Following is the plan's projected benefit obligation at December 31, 2015 and 2014. (amounts in thousands):

	2015			2014
Projected benefit obligation:
Balance, beginning of the year	$	2,682		$	2,114
Service cost		112			82
Interest cost		102			105
Actuarial loss		53			457
Benefits paid to participants		(84	)		(76	)
Balance, end of year	$	2,865		$	2,682

        At December 31, 2015, 2014 and 2013, the funded status of the plan was as follows (amounts in thousands):

	2015			2014			2013
Excess of benefit obligation over the value of plan assets	$	(2,865	)	$	(2,682	)	$	(2,114	)
Unrecognized net actuarial loss		905			904			473
Unrecognized prior service cost		69			86			103
Accrued benefit cost	$	(1,891	)	$	(1,692	)	$	(1,538	)

        The plan is unfunded. As such, the Company is not required to make annual contributions to the plan.

        At December 31, 2015 and 2014, the amounts recognized in the consolidated balance sheets were classified as follows (amounts in thousands):

	2015			2014
Accrued benefit cost	$	(2,865	)	$	(2,682	)
Accumulated other comprehensive loss		974			990
Net amount recognized	$	(1,891	)	$	(1,692	)

        Amounts recorded in accumulated other comprehensive loss are reported net of tax.

        The benefits expected to be paid in each of the next five years and thereafter are as follows (amounts in thousands):

Years Ending December 31,	Amount
2016	$	146
2017		185
2018		222
2019		127
2020		153
2021 through 2025		958
	$	1,791

        At December 31, 2015 and 2014, the following weighted-average rates were used:

	2015			2014
Discount rate on the benefit obligation		3.90	%		3.80	%
Rate of employee compensation increase		4.00	%		4.00	%

        Pension expense for the years ended December 31, 2015, 2014 and 2013, consists of the following (amounts in thousands):

	2015		2014		2013
Service cost	$	112	$	82	$	83
Interest cost		102		105		84
Expected return on plan assets		—		—		—
Recognized actuarial loss (gain)		—		—		—
Amortization of prior service cost		17		17		19
Net loss amortization		51		27		36
	$	282	$	231	$	222

        WAPA makes contributions to the Newspaper Guild International Pension Plan (the "Plan" or "TNGIPP"), a multiemployer pension plan with a plan year end of December 31 that provides defined benefits to certain employees covered by two CBAs, one of which was scheduled to expire on July 23, 2015 and the other of which expires on June 27, 2016. Pursuant to its terms, the CBA which was scheduled to expire on July 23, 2015 automatically renewed for a period of eighteen (18) months upon such expiration date and remains in effect through January 23, 2017 while the parties negotiate its renewal. WAPA's contribution rates to the Plan are generally determined in accordance with the provisions of the CBAs and a rehabilitation plan that was adopted by the TNGIPP.

        The risks in participating in such a plan are different from the risks of single-employer plans, in the following respects:

· Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employer.

· If a participating employer ceases to contribute to a multiemployer plan, the unfunded obligation of the plan may be borne by the remaining participating employer.

        Under current law regarding multiemployer defined benefit plans, a plan's termination, WAPA's voluntary withdrawal, or the mass withdrawal of all contributing employers from any underfunded multiemployer defined benefit plan would require us to make payments to the plan for our proportionate share of the multiemployer plan's unfunded vested liabilities.

        WAPA has received Annual Funding Notices, Report of Summary Plan Information, Critical Status Notices ("Notices") and the above-noted Rehabilitation Plan, as defined by the Pension Protection Act of 2006 ("PPA"), from the Plan. The Notices indicate that the Plan actuary has certified that the Plan is in critical status, the "Red Zone", as defined by the PPA, and that a plan of rehabilitation ("Rehabilitation Plan") was adopted by the Trustees of the Plan ("Trustees") on May 1, 2010 and then updated on November 17, 2015. On May 29, 2010, the Trustees sent WAPA a Notice of Reduction and Adjustment of Benefits Due to Critical Status explaining all changes adopted under the Rehabilitation Plan, including the reduction or elimination of benefits referred to as "adjustable benefits." In connection with the adoption of the Rehabilitation Plan, most of the Plan participating unions and contributing employers (including the Newspaper Guild International and WAPA), agreed to one of the "schedules" of changes as set forth under the Rehabilitation Plan. WAPA elected the "Preferred Schedule" and executed a Memorandum of Agreement, effective May 27, 2010 (the "MOA") and agreed to the following contribution rate increases: 3.0% beginning on January 1, 2013; an additional 3.0% beginning on January 1, 2014; and an additional 3% beginning on January 1, 2015. In 2015, The Plan's Trustee's reviewed the Rehabilitation Plan and the financial projections under the Plan and determined that is was not prudent to continue benefit accruals under the current Plan and that implementation of a updated plan with a new benefit design would be in the best interest of the Plan's participants. As a result, the Plan's Board of Trustee's adopted changes to the Rehabilitation Plan effective January 1, 2016.

        Under the Rehabilitation Plan, as revised in 2015, WAPA will need to agree to one of the updated "schedules" of changes as set forth under the revised Rehabilitation Plan. These schedule options include a new preferred schedule that does not require contribution increases but requires the employer to commit to remaining in the Plan for an additional five years, or the existing preferred schedule or a default schedule, both of which require annual contribution increases of 3% (starting January 1, 2016).

        The contribution increases and effect of the Rehabilitation Plan as described above are not anticipated to have a material effect on the Company's results of operations. However, in the event other contributing employers are unable to, or fail to, meet their ongoing funding obligations, the financial impact on WAPA to contribute to any plan underfunding may be material. In addition, if a United States multiemployer defined benefit plan fails to satisfy certain minimum funding requirements, the Internal Revenue Service may impose a nondeductible excise tax of 5.0% on the amount of the accumulated funding deficiency for those employers contributing to the fund.

        If WAPA completely or partially withdrew from the Plan, it would be obligated to pay complete or partial withdrawal liability (which could be material). Pursuant to the last available notice (for the Plan year ended December 31, 2014), WAPA's contributions to the Plan exceeded 5% of total contributions made to the Plan.

        Further information about the Plan is presented in the table below (amounts in thousands):

		Pension Protection Act Zone Status	Funding Improvement Plan/Rehabilitation Plan	WAPA's Contribution							Expiration Date of Collective Bargaining Agreements
										Surcharge Imposed
Pension Fund	EIN	2013	Status	2015		2014		2013
TNGIPP (Plan No. 001)	52-1082662	Red	Implemented	$	151	$	144	$	144	Yes	July 21, 2015 June 27, 2016

XML

Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Data (Unaudited)

Quarterly Financial Data (Unaudited)

Note 12. Quarterly Financial Data (Unaudited)

        (Amounts in thousands, except per share amounts)

	2015 Quarters Ended(a)
	March 31		June 30		September 30		December 31
Net revenues	$	29,471	$	32,618	$	31,465	$	36,236
Operating income		7,056		8,780		7,951		11,079
Net income		2,462		3,431		2,910		4,934
Earnings per share:
Basic	$	0.06	$	0.08	$	0.07	$	0.11
Dilutive	$	0.06	$	0.08	$	0.07	$	0.11

	2014 Quarters Ended(a)(b)
	March 31		June 30		September 30		December 31
Net revenues	$	20,951	$	29,055	$	28,781	$	33,202
Operating income		3,647		6,612		5,559		10,211
Net income		248		5,318		663		4,330
Earnings per share:
Basic	$	0.01	$	0.13	$	0.02	$	0.10
Dilutive	$	0.01	$	0.13	$	0.02	$	0.10

	2013 Quarters Ended(a)(c)
	March 31			June 30			September 30			December 31
Net revenues	$	13,495		$	22,929		$	23,705		$	25,876
Operating (loss) income		(117	)		(1,292	)		4,110			5,019
Net (loss) income		(525	)		(2,426	)		(3,985	)		2,639
Earnings (loss) per share:
Basic	$	(525	)	$	(0.06	)	$	(0.09	)	$	0.06
Dilutive	$	(525	)	$	(0.06	)	$	(0.09	)	$	0.06

(a)	The sum of the quarters will not equal the full year due to rounding.
(b)	On April 1, 2014, the Cable Networks Acquisition was consummated, and the operating results are included in our consolidated financial statements as of the date of the acquisition.
(c)	On April 4, 2013, the merger by and among Cinelatino, WAPA Holdings and Azteca providing for the combination of Cinelatino, WAPA Holdings and Azteca as indirect, wholly-owned subsidiaries of Hemisphere (the "Transaction") was consummated. Although Hemisphere issued the equity interests in the Transaction, since it was a new entity formed solely to issue these equity interests to effect the Transaction it was not considered the acquirer and one of the combining entities that existed before the transaction was identified as the acquirer. WAPA was identified as the accounting acquirer and predecessor, whose historical results became the results of Hemisphere. The operating results of the acquired businesses are included in our consolidated financial statements as of the Transaction date.

XML

Nature of Business and Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Nature of Business and Significant Accounting Policies

Reclassification:

        Reclassification:    Certain prior year amounts on the presented consolidated balance sheet have been reclassified to conform with current year presentation with no effect on net income, total assets, total liabilities or stockholders' equity.

Principles of consolidation:

        Principles of consolidation:    The consolidated financial statements include our accounts and the accounts of our subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Basis of presentation:

        Basis of presentation:    The accompanying consolidated financial statements for us and our subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Operating Segments:

        Operating segments:    The Company determines its operating segments based upon (i) financial information reviewed by the chief operating decision maker, the Chief Executive Officer, (ii) internal management and related reporting structure and (iii) the basis upon which the chief operating decision maker makes resource allocation decisions. We have one operating segment, Hemisphere.

Net earnings (loss) per common share:

        Net earnings (loss) per common share:    Basic earnings (loss) per share ("EPS") are computed by dividing income (loss) attributable to common stockholders by the number of weighted-average outstanding shares of common stock. Diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted shares only in the periods in which such effect would have been dilutive.

        The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS (amounts in thousands, except per share amounts):

	Years Ended December 31
	2015		2014		2013
Numerator for earnings (loss) per common share calculation:
Net income (loss)	$	13,739	$	10,557	$	(4,297	)
Denominator for earnings (loss) per common share calculation:
Weighted-average common shares, basic		42,840		42,321		31,143
Effect of dilutive securities
Stock options, restricted stock and warrants		962		301		—
Weighted-average common shares, diluted		43,802		42,622		31,143
EPS
Basic	$	0.32	$	0.25	$	(0.14	)
Diluted	$	0.31	$	0.25	$	(0.14	)

        We apply the treasury stock method to measure the dilutive effect of its outstanding warrants, stock options and restricted stock awards and include the respective common share equivalents in the denominator of our diluted income (loss) per common share calculation. Potentially dilutive securities representing 1.0 million, 1.1 million and 0.6 million shares of common stock for the years ended December 31, 2015, 2014 and 2013, respectively, were excluded from the computation of diluted income (loss) per common share for this period because their effect would have been anti-dilutive. The net income (loss) per share amounts are the same for our Class A and Class B common stock because the holders of each class are legally entitled to equal per share distributions whether through dividends or in liquidation.

        In computing earnings per share, the Company's Nonvoting Stock is considered a participating security. Each share of Nonvoting Stock has identical rights, powers, limitations and restrictions in all respects as each share of common of the Company, including the right to receive the same consideration per share payable in respect of each share of common stock, except that holders of Nonvoting Stock shall have no voting rights or powers whatsoever.

Revenue recognition:

        Revenue recognition:    Revenue related to the sale of advertising and contracted time is recognized at the time of broadcast. Retransmission consent fees and subscriber fees received from cable, telecommunications and satellite operators are recognized in the period in which the services are performed, generally pursuant to multi-year carriage agreements based on the number of subscribers.

Barter transactions:

        Barter transactions:    The Company engages in barter transactions in which advertising time is exchanged for products or services. Barter transactions are accounted for at the estimated fair value of the products or services received, or advertising time given up, whichever is more clearly determinable. Barter revenue is recognized at the time the advertising is broadcast. Barter expense is recorded at the time the merchandise or services are used and/or received.

        Barter revenue and expense included in the consolidated statements of operations are as follows (amounts in thousands):

	2015			2014			2013
Barter revenue	$	811		$	1,311		$	1,448
Barter expense		(791	)		(1,075	)		(1,360	)
	$	20		$	236		$	88

Programming costs:

        Programming costs:    Programming costs are recorded in cost of revenues based on the Company's contractual agreements with various third party programming Distributors which are generally multi-year agreements.

Stock based compensation:

        Stock-based compensation:    We have given equity incentives to certain employees. We account for such equity incentives in accordance with Accounting Standards Codification ("ASC") 718 "Stock Compensation," which requires us to measure compensation cost for equity settled awards at fair value on the date of grant and recognize compensation cost in the consolidated statements of operations over the requisite service or performance period the award is expected to vest. Compensation cost is determined by using either the Monte Carlo simulation model or the Black-Scholes option pricing model.

Advertising and marketing costs:

        Advertising and marketing costs:    The Company expenses advertising and marketing costs as incurred. The Company incurred advertising and marketing costs of $3.5 million, $2.4 million and $1.3 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Cash:

        Cash:    The Company maintains its cash in bank deposit accounts which, at times, may exceed federally-insured limits. The Company has not experienced any losses in such accounts.

Accounts receivable:

        Accounts receivable:    Accounts receivable are carried at the original charge amount less an estimate made for doubtful receivables based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer's financial condition and current economic conditions. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as income when received. The Company considers an account receivable to be past due if any portion of the receivable balance is outstanding for more than 90 days. Changes in the allowance for doubtful accounts for the years ended December 31, 2015, 2014 and 2013 consisted of the following(amounts in thousands):

Year	Description	Beginning of Year		Additions		Write-offs		Recoveries		End of Year
2015	Allowance for doubtful accounts	$	1,073	$	920	$	482	$	1	$	1,512
2014	Allowance for doubtful accounts		651		462		45		5		1,073
2013	Allowance for doubtful accounts		180		519		51		3		651

Programming rights:

        Programming rights:    We enter into multi-year license agreements with various programming Distributors for distribution of their respective programming ("programming rights") and capitalize amounts paid to secure or extend these programming rights at the lower of unamortized cost or estimated net realizable value. If management estimates that the unamortized cost of programming rights exceeds the estimated net realizable value, an adjustment is recorded to reduce the carrying value of the programming rights. No such write-down was deemed necessary during the years ended December 31, 2015, 2014 and 2013. Programming rights are amortized over the term of the related license agreements or the number of exhibitions, whichever occurs first. The amortization of these rights, which was $11.7 million, $10.4 million and $9.3 million for the years ended December 31, 2015, 2014 and 2013, respectively, is recorded as part of cost of revenues in the accompanying consolidated statements of operations. Accumulated amortization of the programming rights was $19.7 million and $16.2 million at December 31, 2015 and 2014, respectively. Costs incurred in connection with the purchase of programs to be broadcast within one year are classified as current assets, while costs of those programs to be broadcast subsequently are considered noncurrent. Program obligations are classified as current or noncurrent in accordance with the payment terms of the license agreement.

Property and equipment:

        Property and equipment:    Property and equipment are recorded at cost. Depreciation is determined using the straight-line method over the expected remaining useful lives of the respective assets. Useful lives range from 1 - 40 years for improvements, equipment, buildings and towers. Upon retirement or other disposition, the cost and related accumulated depreciation of the assets are removed from the accounts and the resulting gain or loss is reflected in the determination of net income or loss. Expenditures for maintenance and repairs are expensed as incurred. Property and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Goodwill and other intangibles:

        Goodwill and other intangibles:    The Company's goodwill is recorded as a result of the Company's business combinations using the acquisition method of accounting. Indefinite lived intangible assets include a broadcast license, trademark and tradenames. Other intangible assets include customer relationships, non-compete agreement and affiliate agreements with an estimated useful life of one to ten years. Other intangible assets are amortized over their estimated lives using the straight-line method. Costs incurred to renew or extend the term of recognized intangible assets are capitalized and amortized over the useful life of the asset.

        The Company tests its broadcast license annually for impairment or whenever events or changes in circumstances indicate that such assets might be impaired. The impairment test consists of a comparison of the fair value of these assets with their carrying amounts using a discounted cash flow valuation method, assuming a hypothetical start-up scenario.

        The Company tests its trademarks and tradenames annually for impairment or whenever events or changes in circumstances indicate that such assets might be impaired. The test consists of a comparison of the fair value of these assets with the carrying amounts utilizing an income approach in the form of the royalty relief method, which measure the cost savings that a business enjoys since it does not have to pay a royalty rate for the use of a particular domain name and brand.

        The Company tests its goodwill annually for impairment or whenever events or changes in circumstances indicate that goodwill might be impaired. The first step of the goodwill impairment test compares the fair value of each reporting unit with its carrying amount, including goodwill. The fair value of the reporting units are determined through the use of a discounted cash flow analysis incorporating variables such as revenue projections, projected operating cash flow margins, and discount rates.

        The valuation assumptions used in the discounted cash flow model reflect historical performance of the Company and prevailing values in the broadcast and cable markets. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds the fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any. The second step of the goodwill impairment test compares the implied fair value of goodwill with the carrying amount of that goodwill. If the carrying amount of goodwill exceeds the implied fair value, an impairment loss shall be recognized in an amount equal to that excess.

        The Company tests its other finite lived intangible asset annually for impairment or whenever events or changes in circumstances indicate that such asset or asset group might be impaired. This analysis is performed by comparing the respective carrying value of the asset group to the current and expected future cash flows, on an undiscounted basis, to be generated from such asset group. If such analysis indicates that the carrying value of this asset group is not recoverable, the carrying value of such asset group is reduced to fair value.

Deferred financing costs:

        Deferred financing costs:    Deferred financing costs are recorded net of accumulated amortization. Amortization is calculated on the effective-interest method over the term of the applicable loan. Amortization of deferred financing costs was $0.5 million, $0.5 million and $0.6 million, which is included in interest expense, net in the accompanying consolidated statements of operations for the years ended December 31, 2015, 2014 and 2013, respectively. Accumulated amortization of deferred financing costs was $1.0 million and $0.5 million at December 31, 2015 and 2014, respectively.

Income taxes:

        Income taxes:    Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

        We record foreign withholding tax, which is withheld by foreign customers from their remittances to us, on a gross basis as a component of income taxes and separate from revenue in the consolidated statement of operations.

        We follow the accounting standard on accounting for uncertainty in income taxes, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The guidance on accounting for uncertainty in income taxes also addresses de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods. To the extent that interest and penalties are assessed by taxing authorities on any underpayment of income taxes, such amounts are accrued and classified as a component of income tax expense.

Fair value of financial instruments:

        Fair value of financial instruments:    The carrying amounts of cash, accounts receivable and accounts payable approximate fair value because of the short maturity of these items. The carrying value of the long-term debt approximates fair value because this instrument bears interest at a variable rate, is pre-payable, and is at terms currently available to the Company.

        Generally accepted accounting principles establish a framework for measuring fair value and expanded disclosures about fair value measurements. This guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. Under this guidance, assets and liabilities carried at fair value must be classified and disclosed in one of the following three categories:

Level 1—inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date.

Level 2—inputs to the valuation methodology include quoted prices in markets that are not active or quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—inputs to the valuation methodology are unobservable, reflecting the entity's own assumptions about assumptions market participants would use in pricing the asset or liability.

        The categorization of an asset or liability within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

        The Company's programming rights and goodwill are classified as Level 3 in the fair value hierarchy, as they are measured at fair value on a non-recurring basis and are adjusted to fair value only when the carrying values exceed their fair values. For the years ended December 31, 2015, 2014 and 2013 there were no adjustments to fair value.

        The Company's variable-rate debt is classified as Level 2 in the fair value hierarchy, as its estimated fair value is derived from quoted market prices by independent dealers. The carrying value of the long-term debt approximates fair value at December 31, 2015 and 2014.

Major customers and suppliers:

        Major customers and suppliers:    One of our Distributors accounted for more than 10% of our total net revenues for the year ended December 31, 2015. There were no other Distributors or other customers that accounted for more than 10% of revenue in any year. Our Networks are provided to these Distributors pursuant to affiliation agreements with varying terms.

Recent accounting pronouncements:

        Recent accounting pronouncements:    In May 2014, the Financial Accounting Standards Board ("FASB") and the International Accounting Standards Board updated the accounting guidance related to revenue recognition. The updated accounting guidance provides a single, contract-based revenue recognition model to help improve financial reporting by providing clearer guidance on when an entity should recognize revenue, and by reducing the number of standards to which an entity has to refer. In July 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The updated accounting guidance provides companies with alternative methods of adoption. We are currently in the process of determining the impact that the updated accounting guidance will have on our consolidated financial statements and our method of adoption.

        FASB has issued Accounting Standards Update ("ASU") 2015-15 Interest-Imputation of Interest (Subtopic 835-30) Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. This ASU adds SEC paragraphs pursuant to the SEC Staff Announcement at the June 18, 2015 Emerging Issue Task Force meeting about the presentation and subsequent measurement of debt issuance costs associated with line-of-credit arrangements. In April 2015, the FASB issued update, ASU 2015-03 Interest—Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs, which requires that debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability. ASU 2015-03 does not address presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. Given the absence of authoritative guidance within ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We will adopt the guidance in the first quarter of 2016, with the impact to our consolidated statement of position to be a reduction in assets where deferred costs are currently disclosed, and a reduction to long-term debt where these costs will be recorded after the transition.

        On November 20, 2015, FASB issued ASU 2015-17- Income taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The ASU simplifies the presentation of deferred income taxes, requiring that deferred income tax liabilities and assets be classified as non-current in the statement of financial position. The amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively or retrospectively to all periods presented. In the period of the change, the entity should disclose the nature of and reason for the change in accounting principle and the quantitative information about the effects of the accounting change on prior periods. We have early adopted this guidance in the fourth quarter 2015. Prior periods have not been restated. See Note. 6 Income Taxes.

        In January 2016, the FASB issued ASU 2016-01—Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other provisions, the new guidance requires the fair value measurement of investments in certain equity securities. For investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices minus impairment. All changes in measurement will be recognized in net income. The guidance will be effective for the first interim period of our 2019 fiscal year. Early adoption is not permitted, except for certain provisions relating to financial liabilities. We are currently evaluating the impact of the new standard.

Use of estimates:

        Use of estimates:    In preparing these consolidated financial statements, management had to make estimates and assumptions that affected the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities as of the balance sheets date, and the reported revenues and expenses for the years then ended. Such estimates are based on historical experience and other assumptions that are considered appropriate in the circumstances. However, actual results could differ from those estimates.

XML

Nature of Business and Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Nature of Business and Significant Accounting Policies

Schedule of the computation of the common shares outstanding used in determining basic and diluted EPS

        The following table sets forth the computation of the common shares outstanding used in determining basic and diluted EPS (amounts in thousands, except per share amounts):

	Years Ended December 31
	2015		2014		2013
Numerator for earnings (loss) per common share calculation:
Net income (loss)	$	13,739	$	10,557	$	(4,297	)
Denominator for earnings (loss) per common share calculation:
Weighted-average common shares, basic		42,840		42,321		31,143
Effect of dilutive securities
Stock options, restricted stock and warrants		962		301		—
Weighted-average common shares, diluted		43,802		42,622		31,143
EPS
Basic	$	0.32	$	0.25	$	(0.14	)
Diluted	$	0.31	$	0.25	$	(0.14	)

Schedule of barter revenue and expense included in the consolidated statements of operations

        Barter revenue and expense included in the consolidated statements of operations are as follows (amounts in thousands):

	2015			2014			2013
Barter revenue	$	811		$	1,311		$	1,448
Barter expense		(791	)		(1,075	)		(1,360	)
	$	20		$	236		$	88

Schedule of changes in the allowance for doubtful accounts

        Changes in the allowance for doubtful accounts for the years ended December 31, 2015, 2014 and 2013 consisted of the following (amounts in thousands):

Year	Description	Beginning of Year		Additions		Write-offs		Recoveries		End of Year
2015	Allowance for doubtful accounts	$	1,073	$	920	$	482	$	1	$	1,512
2014	Allowance for doubtful accounts		651		462		45		5		1,073
2013	Allowance for doubtful accounts		180		519		51		3		651

XML

Business Combination (Tables)

12 Months Ended

Dec. 31, 2015

Cable Networks Acquisition

Schedule of estimated fair values of the assets acquired, liabilities assumed and resulting goodwill

        The following table summarizes the estimated fair values of the assets acquired, liabilities assumed and resulting goodwill in the Cable Networks Acquisition (amounts in thousands):

Other assets	$	177
Intangible asset—affiliate agreements		46,014
Intangible asset—brands		15,986
Intangible asset—advertiser relationships		3,310
Intangible assets—other		648
Other liabilities		(2,123	)
Fair value of identifiable net assets acquired		64,012
Goodwill		34,093
Total	$	98,105

XML

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2015

Property and Equipment

Schedule of property and equipment

        Property and equipment at December 31, 2015 and 2014 consists of the following (amounts in thousands):

	2015			2014
Land and improvements	$	8,724		$	8,724
Building		9,399			7,066
Equipment		24,312			23,270
Towers		5,484			5,433
		47,919			44,493
Less: accumulated depreciation		(26,103	)		(22,969	)
		21,816			21,524
Equipment installations in progress		3,581			2,343
	$	25,397		$	23,867

XML

Goodwill and Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2015

Goodwill and Intangible Assets

Schedule of goodwill and intangible assets

        Goodwill and intangible assets consist of the following at December 31, 2015 and 2014 (amounts in thousands):

	December 31,
	2015		2014
Broadcast license	$	41,356	$	41,356
Goodwill		164,887		164,887
Other intangibles		78,185		91,611
Total intangible assets	$	284,428	$	297,854

Summary of the changes in goodwill and other indefinite lived intangible assets

        A summary of changes in the Company's goodwill and other indefinite lived intangible assets, on a net basis, for the years ended December 31, 2015 and 2014 is as follows (amounts in thousands):

	Net Balance at December 31, 2014		Additions		Impairment		Net Balance at December 31, 2015
Broadcast license	$	41,356	$	—	$	—	$	41,356
Goodwill		164,887		—		—		164,887
Brands		15,986		—		—		15,986
Other intangibles		700		—		—		700
Total indefinite-lived intangibles	$	222,929	$	—	$	—	$	222,929

	Net Balance at December 31, 2013		Additions		Impairment		Net Balance at December 31, 2014
Broadcast licenses	$	41,356	$	—	$	—	$	41,356
Goodwill		130,794		34,093		—		164,887
Brands		—		15,986		—		15,986
Other intangibles		700		—		—		700
Total indefinite-lived intangible	$	172,850	$	50,079	$	—	$	222,929

Summary of the changes in other amortizable intangible assets

        A summary of the changes in the Company's other amortizable intangible assets for the years ended December 31, 2015 and 2014 is as follows (amounts in thousands):

	Net Balance at December 31, 2014		Additions		Amortization			Net Balance at December 31, 2015
Affiliate relationships	$	69,064	$	—	$	(12,298	)	$	56,766
Advertiser relationships		2,896		—		(552	)		2,344
Non-compete agreement		2,882		—		(549	)		2,333
Other intangibles		83		65		(92	)		56
Total Finite-lived intangibles	$	74,925	$	65	$	(13,491	)	$	61,499

	Net Balance at December 31, 2013		Additions		Amortization			Net Balance at December 31, 2014
Affiliate relationships	$	33,910	$	46,014	$	(10,860	)	$	69,064
Advertiser relationships		—		3,310		(414	)		2,896
Non-compete agreement		—		3,294		(412	)		2,882
Other intangibles		—		1,140		(1,057	)		83
Total finite-lived intangibles	$	33,910	$	53,758	$	(12,743	)	$	74,925

Schedule of future estimated amortization expense

        The weighted average remaining amortization period is 5.1 years at December 31, 2015. Future estimated amortization expense is as follows (amounts in thousands):

Year Ending December 31,	Amount
2016	$	13,421
2017		13,248
2018		13,182
2019		8,432
2020 and thereafter		13,216
	$	61,499

XML

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Taxes

Schedule of components of income before provision for income taxes

        For the years ended December 31, 2015, 2014 and 2013, Income before provision for income taxes, includes the following components (amounts in thousands):

	2015		2014		2013
Domestic income	$	9,663	$	6,764	$	(1,301	)
Foreign income		13,118		6,222		134
	$	22,781	$	12,986	$	(1,167	)

Schedule of composition of income tax expense

        For the years ended December 31, 2015, 2014 and 2013, income tax expense is composed of the following (amounts in thousands):

	2015			2014			2013
Current income tax expense	$	11,880		$	4,693		$	2,101
Deferred income tax (benefit) expense		(2,838	)		(2,264	)		1,029
	$	9,042		$	2,429		$	3,130

Schedule of Company's income tax expense and effective tax rates

	2015			2014			2013
Pre-tax book income—US Only		35.0	%		35.0	%		34.0	%
Pre-tax book income—PR Only		20.2	%		16.9	%		–3.9	%
Permanent items		4.0	%		3.2	%		–164.6	%
Return to provision true-ups—Current/Deferred		–1.4	%		–3.8	%		27.9	%
Foreign rate differential		2.2	%		3.4	%		–7.4	%
Foreign tax credits		–24.5	%		–31.1	%		90.2	%
Current/Deferred—rate difference		0.0	%		0.0	%		0.9	%
Change in valuation allowance		0.0	%		–19.6	%		–212.6	%
Foreign withholding taxes		6.7	%		8.9	%		0.0	%
Deferred foreign tax credit offset		–2.2	%		4.0	%		–20.4	%
State taxes and state rate change		–0.3	%		1.9	%		146.9	%
Federal rate change		0.0	%		0.0	%		–152.8	%
		39.7	%		18.8	%		–261.8	%

Schedule of components of net deferred tax liabilities

        Net deferred tax liabilities consist of the following components as of December 31, 2015 and 2014 (amounts in thousands):

	2015			2014
Deferred tax assets:
Allowances for doubtful accounts	$	1,976		$	1,091
Deferred branch tax benefit		15,813			16,592
Deferred income		29			31
Fixed assets		39			—
Accrued expenses		1,440			3,299
Foreign tax credit		5,572			2,592
Stock compensation		3,465			2,918
Pension		651			1,041
Intangibles		2,376			2,651
		31,361			30,215
Deferred tax liabilities:
Prepaid expenses		(196	)		(200	)
Intangibles		(23,000	)		(25,807	)
Property and equipment		(3,098	)		(4,032	)
Amortization expense		(9,715	)		(7,624	)
Total deferred tax liabilities		(36,009	)		(37,663	)
	$	(4,648	)	$	(7,448	)

Schedule of classification of deferred tax amounts

        The deferred tax amounts mentioned above have been classified on the accompanying consolidated balance sheets at December 31, 2015 and 2014 as follows (amounts in thousands):

	2015		2014
Current assets	$	—	$	4,222
Non-current assets	$	13,280	$	—
Non-current liabilities	$	17,928	$	11,670

XML

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2015

Long-Term Debt

Schedule of long-term debt

        Long-term debt as of December 31, 2015 and 2014 consists of the following (amounts in thousands):

	December 31, 2015			December 31, 2014
Senior Notes due July 2020	$	219,923		$	221,791
Less: Current portion		(8,278	)		(2,250	)
	$	211,645		$	219,541

Schedule of maturities of long-term debt

        Following are maturities of long-term debt, at December 31, 2015 (amounts in thousands):(a)

Year Ending December 31,
2016	$	8,278
2017		—
2018		—
2019		722
2020		212,625
	$	221,625

(a)           Table does not consider any future excess cash payments.

XML

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2015

Equity incentive plans

Summary of stock option activity

        The following table summarizes stock option activity for the years ended December 31, 2015, 2014 and 2013 (shares and intrinsic values in thousands):

	Number of shares			Weighted- average exercise price		Weighted- average remaining contractual term		Aggregate intrinsic value
Outstanding at January 1, 2013
Granted		1,730		$	11.20		9.3	$	1,157
Exercised		—			—		—		—
Forfeited or expired		—			—		—		—
Outstanding at December 31, 2013		1,730		$	11.20		9.3	$	2,208
Granted		140		$	11.56		9.7		—
Exercised		—			—		—		—
Forfeited or expired		—			—		—		—
Outstanding at December 31, 2014		1,870		$	11.23		8.4	$	4,721
Granted		215		$	13.61		6.2		—
Exercised		(15	)		10.60		—		—
Forfeited or expired		(27	)		10.60		—		—
Outstanding at December 31, 2015		2,043		$	11.49		7.6	$	6,740
Vested at December 31, 2015		1,065		$	11.33		7.3	$	3,696
Exerciseable at December 31, 2015		1,065		$	11.33		7.3	$	3,696

Summary of restricted share activity

        The following table summarizes restricted share activity for the years ended December 31, 2015, 2014 and 2013 (shares in thousands):

	Number of shares			Weighted-average grant date fair value
Outstanding at January 1, 2013		—			—
Granted		1,195		$	9.81
Vested		(250	)	$	8.41
Forfeited		—			—
Outstanding at December 31, 2013		945		$	10.18
Granted		79			11.34
Vested		(305	)		11.33
Forfeited		—			—
Outstanding at December 31, 2014		719		$	9.82
Granted		99		$	12.42
Vested		(324	)		10.65
Forfeited		—			—
Outstanding at December 31, 2015		494		$	9.79

Time Based Stock Option | Black Scholes Pricing Model

Equity incentive plans

Schedule of valuation assumptions

Black-Scholes Option Valuation Assumptions	2015	2014	2013
Risk-free interest rate	1.76% - 2.12%	1.76% - 1.92%	0.93% - 2.03%
Dividend yield	—	—	—
Volatility	25.8% - 29.5%	28.4% - 30.9%	34.4% - 36.7%
Weighted-average expected term (years)	6.3	6.0 - 6.3	6.0

XML

Commitments (Tables)

12 Months Ended

Dec. 31, 2015

Commitments

Schedule of future minimum payments for operating leases and other commitments, primarily programming

        Future minimum payments for these commitments and other commitments, primarily programming, are as follows (amounts in thousands):

Year Ending December 31,	Operating Leases		Other Commitments		Total
2016	$	296	$	7,093	$	7,389
2017		388		3,413		3,801
2018		383		2,561		2,944
2019		335		1,260		1,595
2020 and thereafter		1,150		631		1,781
Total	$	2,552	$	14,958	$	17,510

XML

Retirement Plans (Tables)

12 Months Ended

Dec. 31, 2015

Retirement Plans

Schedule of projected benefit obligation

        Following is the plan's projected benefit obligation at December 31, 2015 and 2014. (amounts in thousands):

	2015			2014
Projected benefit obligation:
Balance, beginning of the year	$	2,682		$	2,114
Service cost		112			82
Interest cost		102			105
Actuarial loss		53			457
Benefits paid to participants		(84	)		(76	)
Balance, end of year	$	2,865		$	2,682

Schedule of funded status of the plan

        At December 31, 2015, 2014 and 2013, the funded status of the plan was as follows (amounts in thousands):

	2015			2014			2013
Excess of benefit obligation over the value of plan assets	$	(2,865	)	$	(2,682	)	$	(2,114	)
Unrecognized net actuarial loss		905			904			473
Unrecognized prior service cost		69			86			103
Accrued benefit cost	$	(1,891	)	$	(1,692	)	$	(1,538	)

Schedule of amounts recognized in the consolidated balance sheets

        At December 31, 2015 and 2014, the amounts recognized in the consolidated balance sheets were classified as follows (amounts in thousands):

	2015			2014
Accrued benefit cost	$	(2,865	)	$	(2,682	)
Accumulated other comprehensive loss		974			990
Net amount recognized	$	(1,891	)	$	(1,692	)

Schedule of benefits expected to be paid in each of the next five years and thereafter

        The benefits expected to be paid in each of the next five years and thereafter are as follows (amounts in thousands):

Years Ending December 31,	Amount
2016	$	146
2017		185
2018		222
2019		127
2020		153
2021 through 2025		958
	$	1,791

Schedule of weighted-average rates used

	2015			2014
Discount rate on the benefit obligation		3.90	%		3.80	%
Rate of employee compensation increase		4.00	%		4.00	%

Schedule of pension expenses

        Pension expense for the years ended December 31, 2015, 2014 and 2013, consists of the following (amounts in thousands):

	2015		2014		2013
Service cost	$	112	$	82	$	83
Interest cost		102		105		84
Expected return on plan assets		—		—		—
Recognized actuarial loss (gain)		—		—		—
Amortization of prior service cost		17		17		19
Net loss amortization		51		27		36
	$	282	$	231	$	222

Schedule of further information about the Plan

        Further information about the Plan is presented in the table below (amounts in thousands):

		Pension Protection Act Zone Status	Funding Improvement Plan/Rehabilitation Plan	WAPA's Contribution							Expiration Date of Collective Bargaining Agreements
										Surcharge Imposed
Pension Fund	EIN	2013	Status	2015		2014		2013
TNGIPP (Plan No. 001)	52-1082662	Red	Implemented	$	151	$	144	$	144	Yes	July 21, 2015 June 27, 2016

XML

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Data (Unaudited)

Schedule of quarterly financial data

        (Amounts in thousands, except per share amounts)

	2015 Quarters Ended(a)
	March 31		June 30		September 30		December 31
Net revenues	$	29,471	$	32,618	$	31,465	$	36,236
Operating income		7,056		8,780		7,951		11,079
Net income		2,462		3,431		2,910		4,934
Earnings per share:
Basic	$	0.06	$	0.08	$	0.07	$	0.11
Dilutive	$	0.06	$	0.08	$	0.07	$	0.11

	2014 Quarters Ended(a)(b)
	March 31		June 30		September 30		December 31
Net revenues	$	20,951	$	29,055	$	28,781	$	33,202
Operating income		3,647		6,612		5,559		10,211
Net income		248		5,318		663		4,330
Earnings per share:
Basic	$	0.01	$	0.13	$	0.02	$	0.10
Dilutive	$	0.01	$	0.13	$	0.02	$	0.10

	2013 Quarters Ended(a)(c)
	March 31			June 30			September 30			December 31
Net revenues	$	13,495		$	22,929		$	23,705		$	25,876
Operating (loss) income		(117	)		(1,292	)		4,110			5,019
Net (loss) income		(525	)		(2,426	)		(3,985	)		2,639
Earnings (loss) per share:
Basic	$	(525	)	$	(0.06	)	$	(0.09	)	$	0.06
Dilutive	$	(525	)	$	(0.06	)	$	(0.09	)	$	0.06

(a)	The sum of the quarters will not equal the full year due to rounding.
(b)	On April 1, 2014, the Cable Networks Acquisition was consummated, and the operating results are included in our consolidated financial statements as of the date of the acquisition.
(c)	On April 4, 2013, the merger by and among Cinelatino, WAPA Holdings and Azteca providing for the combination of Cinelatino, WAPA Holdings and Azteca as indirect, wholly-owned subsidiaries of Hemisphere (the "Transaction") was consummated. Although Hemisphere issued the equity interests in the Transaction, since it was a new entity formed solely to issue these equity interests to effect the Transaction it was not considered the acquirer and one of the combining entities that existed before the transaction was identified as the acquirer. WAPA was identified as the accounting acquirer and predecessor, whose historical results became the results of Hemisphere. The operating results of the acquired businesses are included in our consolidated financial statements as of the Transaction date.

XML

Nature of Business and Significant Accounting Policies (Details) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended												12 Months Ended
	Apr. 01, 2014 USD ($) item	Dec. 31, 2015 USD ($) $ / shares	Sep. 30, 2015 USD ($) $ / shares	Jun. 30, 2015 USD ($) $ / shares	Mar. 31, 2015 USD ($) $ / shares	Dec. 31, 2014 USD ($) $ / shares	Sep. 30, 2014 USD ($) $ / shares	Jun. 30, 2014 USD ($) $ / shares	Mar. 31, 2014 USD ($) $ / shares	Dec. 31, 2013 USD ($) $ / shares	Sep. 30, 2013 USD ($) $ / shares	Jun. 30, 2013 USD ($) $ / shares	Mar. 31, 2013 USD ($) $ / shares	Dec. 31, 2015 USD ($) segment $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2013 USD ($) $ / shares shares
Nature of Business and Significant Accounting Policies
Number of operating segments | segment														1
Nature of business
Assets acquired in cash | $															$ 101,891
Numerator for earnings (loss) per common share calculation:
Net income (loss) | $		$ 4,934	$ 2,910	$ 3,431	$ 2,462	$ 4,330	$ 663	$ 5,318	$ 248	$ 2,639	$ (3,985)	$ (2,426)	$ (525)	$ 13,739	$ 10,557	$ (4,297)
Denominator for earnings (loss) per common share calculation:
Weighted-average common shares, basic														42,840	42,321	31,143
Effect of dilutive securities:
Stock options, restricted stock and warrants														962	301
Weighted-average common shares, diluted														43,802	42,622	31,143
EPS
Basic (in dollars per share) | $ / shares		$ 0.11	$ 0.07	$ 0.08	$ 0.06	$ 0.10	$ 0.02	$ 0.13	$ 0.01	$ 0.06	$ (0.09)	$ (0.06)	$ (525)	$ 0.32	$ 0.25	$ (0.14)
Diluted (in dollars per share) | $ / shares		$ 0.11	$ 0.07	$ 0.08	$ 0.06	$ 0.10	$ 0.02	$ 0.13	$ 0.01	$ 0.06	$ (0.09)	$ (0.06)	$ (525)	$ 0.31	$ 0.25	$ (0.14)
Shares excluded from the computation of diluted income (loss) per common share														1,000	1,100	600
Cable Networks Acquisition
Nature of business
Number of Spanish-language cable television networks whose assets are acquired | item	3
Assets acquired in cash | $	$ 101,900

XML

Nature of Business and Significant Accounting Policies (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Barter transactions:
Barter revenue	$ 811	$ 1,311	$ 1,448
Barter expense	(791)	(1,075)	(1,360)
Barter revenue and expense	20	236	88
Advertising and Marketing costs:
Advertising and marketing costs	$ 3,500	$ 2,400	$ 1,300

XML

Nature of Business and Significant Accounting Policies (Details 3) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Accounts receivable:
Threshold period for considering receivable as past due	90 days
Changes in the allowance for doubtful accounts
Beginning of Year	$ 1,073,000	$ 651,000	$ 180,000
Additions	920,000	462,000	519,000
Write-offs	482,000	45,000	51,000
Recoveries	1,000	5,000	3,000
End of Year	1,512,000	1,073,000	651,000
Programming rights:
Impairment of programming rights	0	0	0
Amortization of programming rights	11,703,000	10,370,000	$ 9,322,000
Accumulated amortization of programming rights	$ 19,700,000	$ 16,200,000

XML

Nature of Business and Significant Accounting Policies (Details 4)	12 Months Ended
	Dec. 31, 2015
Minimum
Property and equipment
Useful life	1 year
Maximum
Property and equipment
Useful life	40 years

XML

Nature of Business and Significant Accounting Policies (Details 5) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Deferred financing costs:
Amortization of deferred financing costs	$ 504	$ 507	$ 604
Accumulated amortization of deferred financing costs	$ 1,000	$ 500
Customer relationships, non-compete agreement and affiliate agreements | Minimum
Goodwill and other intangibles:
Estimated useful life	1 year
Customer relationships, non-compete agreement and affiliate agreements | Maximum
Goodwill and other intangibles:
Estimated useful life	10 years

XML

Nature of Business and Significant Accounting Policies (Details 6) $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) item	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Revenue | Customer concentration risk
Concentration risk
Number of distributors who accounted for more than 10% | item	1
Programming rights | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring
Fair value of financial instruments:
Adjustments to fair value | $	$ 0	$ 0	$ 0

XML

Business Combination (Details) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended	15 Months Ended
	Apr. 01, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2015
Business Combination
Cash consideration			$ 101,891
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Goodwill		$ 130,794	$ 164,887	$ 164,887	$ 164,887
Cable Networks Acquisition
Business Combination
Cash consideration	$ 101,900
Costs incurred in connection with acquisition		$ 900		$ 1,200
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Other assets	177
Other liabilities	(2,123)
Fair value of identifiable net assets acquired	64,012
Goodwill	34,093
Total	98,105
Affiliate relationships | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Intangible asset	$ 46,014
Estimated useful life	8 years
Affiliate relationships | Cable Networks Acquisition | Discounted Cash Flow Method
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Discount rate (as a percent)	8.50%
Advertiser relationships | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Intangible asset	$ 3,310
Estimated useful life	6 years
Advertiser relationships | Cable Networks Acquisition | Discounted Cash Flow Method
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Discount rate (as a percent)	8.50%
Other intangibles | Consulting Agreement With Executives Of Acquiree | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Intangible asset	$ 1,100
Other Intangible Assets Excluding Employment Contract | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Intangible asset	648
Consulting Agreement | Consulting Agreement With Executives Of Acquiree | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Fair value of identifiable assets accounted for separately from the acquisition	500
Non-compete agreements | Noncompete Agreement With Acquiree | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Fair value of identifiable assets accounted for separately from the acquisition	$ 3,300
Estimated useful life	6 years
Non-compete agreements | Noncompete Agreement With Acquiree | Cable Networks Acquisition | Discounted Cash Flow Method
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Discount rate (as a percent)	8.50%
Maximum | Other intangibles | Consulting Agreement With Executives Of Acquiree | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Estimated useful life	1 year
Brands | Cable Networks Acquisition
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Indefinite lived intangible assets acquired	$ 15,986
Brands | Cable Networks Acquisition | Discounted Cash Flow Method
Estimated fair values of assets acquired, liabilities assumed and resulting goodwill
Discount rate (as a percent)	8.50%
Royalty rate (as a percent)	5.00%

XML

Related party transactions (Details) $ in Millions		1 Months Ended		2 Months Ended	12 Months Ended
	Apr. 09, 2013	Oct. 31, 2015 USD ($)	Nov. 30, 2013 item	Mar. 13, 2015 USD ($) item	Dec. 31, 2015 USD ($) item	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
MVS Multivision Digital Sde RLde CV and Affiliates
Related party transactions
Due from related parties, net of allowance for doubtful accounts					$ 1.7	$ 1.3
Due to related parties					$ 1.1	0.7
MVS Multivision Digital Sde RLde CV and Affiliates | Satellite and Support Services Agreement | Cinelatino
Related party transactions
Number of channel feeds delivered through satellite | item					2
Total expense					$ 2.3	2.1	$ 1.6
MVS Multivision Digital Sde RLde CV and Affiliates | Master License Agreement | Cinelatino
Related party transactions
Term of agreement					10 years
Distribution fee as a percentage of revenue earned					13.50%
Revenue recognized from related party					$ 5.1	4.2	2.7
MVS Multivision Digital Sde RLde CV and Affiliates | Affiliation Agreement | Cinelatino
Related party transactions
Revenue recognized from related party					2.0	1.9	1.3
MVS Multivision Digital Sde RLde CV and Affiliates | Affiliation Agreement | Pasiones
Related party transactions
Revenue recognized from related party					0.0
MVS Multivision Digital Sde RLde CV and Affiliates | Movie License Agreement | Cinelatino
Related party transactions
Total expense					0.0	0.0	0.0
Number of movies licensed | item			6
Programming rights					0.1	0.1
MVS Multivision Digital Sde RLde CV and Affiliates | Programming License Agreement | Cinelatino
Related party transactions
Total expense					0.0
Programming rights					0.0
Director and Entity Owned by Director | Consulting Agreements with Director and Entity Owned by Director
Related party transactions
Total expense					0.2	0.2	0.2
Due to related parties					0.0	0.1
Director | Consulting Agreement with Director
Related party transactions
Term of agreement	3 years
Panamax Films, LLC | Programming Agreements
Related party transactions
Total expense					$ 0.0	0.0	0.0
Number of specific movie titles to be distributed | item					3
Panamax Films, LLC | Programming Agreements | Other Assets
Related party transactions
Programming rights					$ 0.1	0.2
Pantelion Films | Distribution Agreement | Cinelatino
Related party transactions
Total expense					0.0	0.0	0.3
Revenue recognized from related party		$ 0.0
Due to related parties					0.0	0.0
Licensing revenues					$ 0.0	0.0	0.0
Pantelion Films | Distribution Agreement | Cinelatino | Maximum
Related party transactions
Percentage of rentals agreed to be paid					12.50%
Lions Gate | Movie License Agreement | Cinelatino
Related party transactions
Total expense					$ 0.2
Number of movies licensed | item				14
Programming rights					0.2
License fee under agreement with related party				$ 0.8
Inter Media Advisors LLC | Services Agreement
Related party transactions
Total expense					0.0	0.0	$ 0.0
Due to related parties					$ 0.0	$ 0.0

XML

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Property and equipment
Property and equipment, gross	$ 47,919	$ 44,493
Less: accumulated depreciation	(26,103)	(22,969)
Property and equipment, net excluding construction and equipment installations in progress	21,816	21,524
Property and equipment, net	25,397	23,867
Depreciation expense	3,700	3,800	$ 3,800
Land and Land Improvements
Property and equipment
Property and equipment, gross	8,724	8,724
Building
Property and equipment
Property and equipment, gross	9,399	7,066
Equipment
Property and equipment
Property and equipment, gross	24,312	23,270
Towers
Property and equipment
Property and equipment, gross	5,484	5,433
Equipment installations in progress
Property and equipment
Property and equipment, net	$ 3,581	$ 2,343

XML

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Goodwill and Intangible Assets
Broadcast licenses	$ 41,356	$ 41,356
Goodwill	164,887	164,887	$ 130,794
Other intangibles	78,185	91,611
Total intangible assets	$ 284,428	$ 297,854

XML

Goodwill and intangible assets (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Changes in the goodwill
Net balance at the beginning of the period	$ 164,887	$ 130,794
Additions		34,093
Net balance at the end of the period	$ 164,887	164,887
Changes in the goodwill and other indefinite lived intangible assets, on a net basis
Net balance at the beginning of the period	$ 222,929	172,850
Additions		50,079
Net balance at the end of the period	$ 222,929	222,929
Broadcast license
Changes in other indefinite-lived intangible assets
Net balance at the beginning of the period	$ 41,356	41,356
Additions
Net balance at the end of the period	$ 41,356	41,356
Brands
Changes in other indefinite-lived intangible assets
Net balance at the beginning of the period	$ 15,986
Additions		15,986
Net balance at the end of the period	$ 15,986	15,986
Other intangibles
Changes in other indefinite-lived intangible assets
Net balance at the beginning of the period	$ 700	700
Additions
Net balance at the end of the period	$ 700	$ 700

XML

Goodwill and Intangible Assets (Details 3) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2015
Changes in other amortizable intangible assets
Balance at the beginning of the period	$ 74,925	$ 33,910
Additions	65	53,758
Amortization	(13,491)	(12,743)	$ (5,000)
Net balance at the end of the period	61,499	74,925	33,910
Future estimated amortization expense
2016				$ 13,421
2017				13,248
2018				13,182
2019				8,432
2020 and thereafter				13,216
Total	$ 74,925	33,910	33,910	61,499
Weighted Average
Changes in other amortizable intangible assets
Remaining amortization period	5 years 1 month 6 days
Affiliate relationships
Changes in other amortizable intangible assets
Balance at the beginning of the period	$ 69,064	33,910
Additions		46,014
Amortization	(12,298)	(10,860)
Net balance at the end of the period	56,766	69,064	33,910
Future estimated amortization expense
Total	69,064	33,910	$ 33,910	56,766
Advertiser relationships
Changes in other amortizable intangible assets
Balance at the beginning of the period	2,896
Additions		3,310
Amortization	(552)	(414)
Net balance at the end of the period	2,344	2,896
Future estimated amortization expense
Total	2,896	2,896		2,344
Non-compete agreements
Changes in other amortizable intangible assets
Balance at the beginning of the period	2,882
Additions		3,294
Amortization	(549)	(412)
Net balance at the end of the period	2,333	2,882
Future estimated amortization expense
Total	2,882	2,882		2,333
Other intangibles
Changes in other amortizable intangible assets
Balance at the beginning of the period	83
Additions	65	1,140
Amortization	(92)	(1,057)
Net balance at the end of the period	56	83
Future estimated amortization expense
Total	$ 83	$ 83		$ 56

XML

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Taxes
Domestic income	$ 9,663	$ 6,764	$ (1,301)
Foreign income	13,118	6,222	134
Income (loss) before income taxes	22,781	12,986	(1,167)
Composition of income tax expense
Current income tax expense	11,880	4,693	2,101
Deferred income tax (benefit) expense	(2,838)	(2,264)	1,029
Income tax expense	9,042	2,429	3,130
Foreign withholding tax included in current tax expense	$ 1,500	$ 1,100	$ 600
Effective tax rates reconciliation
Pre-tax book income - US Only (as a percent)	35.00%	35.00%	34.00%
Permanent items (as a percent)	4.00%	3.20%	(164.60%)
Return to provision true-ups - Current/Deferred (as percent)	(1.40%)	(3.80%)	27.90%
Foreign rate differential (as a percent)	2.20%	3.40%	(7.40%)
Foreign tax credits (as a percent)	(24.50%)	(31.10%)	90.20%
Current/Deferred-rate difference (as a percent)	0.00%	0.00%	0.90%
Change in valuation allowance (as a percent)	0.00%	(19.60%)	(212.60%)
Foreign withholding taxes (as a percent)	6.70%	8.90%	0.00%
Deferred foreign tax credit offset (as a percent)	(2.20%)	4.00%	(20.40%)
State taxes and state rate change (as a percent)	(0.30%)	1.90%	146.90%
Federal rate change (as a percent)	0.00%	0.00%	(152.80%)
Effective tax rate (as a percent)	39.70%	18.80%	(261.80%)
PUERTO RICO
Effective tax rates reconciliation
Pre-tax book income - PR Only (as a percent)	20.20%	16.90%	(3.90%)

XML

Income Taxes (Details 2) - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Classification of deferred tax amounts
Current assets		$ 4,222
Non-current assets	$ 13,280
Non-current liabilities	17,928	11,670
Deferred tax assets:
Allowances for doubtful accounts	1,976	1,091
Deferred branch tax benefit	15,813	16,592
Deferred income	29	31
Fixed assets	39
Accrued expenses	1,440	3,299
Foreign tax credit	5,572	2,592
Stock compensation	3,465	2,918
Pension	651	1,041
Intangibles	2,376	2,651
Deferred tax assets, gross	31,361	30,215
Deferred tax liabilities:
Prepaid expenses	(196)	(200)
Intangibles	(23,000)	(25,807)
Property and equipment	(3,098)	(4,032)
Amortization expense	(9,715)	(7,624)
Total deferred tax liabilities	(36,009)	(37,663)
Net deferred tax liabilities	(4,648)	$ (7,448)
Early adoption effect due to adjustments for new accounting principle
Classification of deferred tax amounts
Non-current assets	9,800
Non-current liabilities	$ 17,300

XML

Income Taxes (Details 3) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Income Taxes
Uncertain tax position reserves	$ 0.3	$ 0.7
Interest expense related to uncertain tax positions	0.0	0.0
Foreign tax authority
Income Taxes
Foreign tax credit carryforwards	$ 5.6	$ 2.6

XML

Long-Term Debt (Details) $ in Thousands		1 Months Ended	12 Months Ended
	Jul. 31, 2014 USD ($)	Jul. 31, 2014 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Jul. 30, 2013 USD ($) item
Long-term debt
Less: Current portion			$ (8,278)	$ (2,250)
Long-term debt less current portion			211,645	219,541
Accumulated amortization			1,000	500
Loss on early extinguishment of debt				1,116	$ 1,649
Payment of excess cash flow			8,300
Maturities of long-term debt
2016			8,278
2019			722
2020			212,625
Total maturities			221,625
Term Loan
Long-term debt
Interest rate margin (as a percent)	5.00%
Term Loan | LIBOR
Long-term debt
Interest rate floor (as a percent)	1.25%
Senior Secured Term Loan B Facility
Long-term debt
Long-term debt			219,923	$ 221,791
Amount of term loan	$ 225,000	$ 225,000				$ 175,000
Uncommitted accordion option base amount						$ 40,000
Uncommitted accordion option multiplier of 1st lien net leverage | item						4.0
Interest rate margin (as a percent)	4.00%
Effective interest rate (as a percent)	5.00%	5.00%
OID (as a percent)	0.50%	0.50%
OID			1,700
Accumulated amortization of original issue discount			700
Deferred financing costs			2,300
Accumulated amortization			$ 1,000
Loss on early extinguishment of debt		$ 1,100
Write off of deferred costs associated with debt extinguishment		700
Write off of debt discount associated with debt extinguishment		400
Maximum period after each fiscal year for prepayment of debt			90 days
Prepayment of debt as a percentage of excess cash flow			50.00%
First prepayment of debt as a percentage of excess cash flow, if lower leverage ratio is maintained			25.00%
Second prepayment of debt as a percentage of excess cash flow, if lower leverage ratio is maintained			0.00%
Borrowing capacity	$ 20,000	$ 20,000
Deferred financing costs on new issuance expensed			$ 1,000
Senior Secured Term Loan B Facility | LIBOR
Long-term debt
Reference rate basis	LIBOR
Interest rate floor (as a percent)	1.00%

XML

Stockholders' Equity (Details) $ / shares in Units, $ in Millions		12 Months Ended
	Apr. 04, 2013 USD ($) item $ / shares shares	Dec. 31, 2015 item $ / shares shares	Dec. 31, 2014 $ / shares shares
Period within 36 months following April 4, 2013
Capitalization
Number of trading days | item		20
Number of consecutive trading days		30 days
Period within 36 months following April 4, 2013 | Maximum
Capitalization
Trading period		36 months
Period within 60 months following April 4, 2013
Capitalization
Number of trading days | item		20
Number of consecutive trading days		30 days
Period within 60 months following April 4, 2013 | Maximum
Capitalization
Trading period		60 months
Common Class B
Capitalization
Common Stock, par value (in dollars per share) | $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Number of shares of common stock subject to forfeiture in the event the market price of common stock does not meet certain levels	1,500,000
Total shares outstanding at closing	33,000,000	30,027,148	30,027,148
Number of votes per share of common stock | item	10
Common Class B | Period within 60 months following April 4, 2013
Capitalization
Number of shares forfeited		1,500,000
Common Class A
Capitalization
Common Stock, par value (in dollars per share) | $ / shares	$ 0.0001	$ 0.0001	$ 0.0001
Number of shares of common stock subject to forfeiture in the event the market price of common stock does not meet certain levels	503,788
Total shares outstanding at closing	10,991,100	15,342,440	14,518,734
Number of shares of restricted stock issued	250,000
Common stock Class B shares transferred			3,000,000
Number of votes per share of common stock | item	1
Common Class A | Period within 36 months following April 4, 2013
Capitalization
Stock trigger price (in dollars per share) | $ / shares		$ 15.00
Number of shares forfeited		379,000
Common Class A | Period within 60 months following April 4, 2013
Capitalization
Stock trigger price (in dollars per share) | $ / shares		$ 15.00
Number of shares forfeited		100,000
Cinelatino/WAPA Investors
Capitalization
Cash received for surrender of equity interests | $	$ 5.0
Cinelatino/WAPA Investors | Common Class B
Capitalization
Aggregate shares received	33,000,000
Cinelatino/WAPA Investors | Common Class A
Capitalization
Warrants purchased from Azteca Acquisition Corporation (in shares)	2,333,334
Azteca
Capitalization
Founder shares cancelled	250,000
Azteca | Common Class A
Capitalization
Stock conversion ratio	1
Number of shares of common stock subject to forfeiture in the event the market price of common stock does not meet certain levels	250,000

XML

Stockholders' Equity (Details 2) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) item $ / shares shares	Dec. 31, 2014 USD ($) $ / shares shares	Dec. 31, 2013 USD ($) $ / shares shares
Equity incentive plans
Shares available for issuance	800
Stock-based compensation
Stock-based compensation expense (in dollars) | $	$ 5,600	$ 5,900	$ 7,200
Common Class A
Equity incentive plans
Shares authorized for issuance	4,000
Employee and Directors Stock Options
Equity incentive plans
Granted (in shares)	215	140	1,730
Vested at the end of the period (in shares)	1,065
Stock-based compensation
Unrecognized compensation cost related to non-vested stock options (in dollars) | $	$ 2,300
Weighted-average periods over which unrecognized compensation cost recognized	2 years 1 month 6 days
Estimated forfeitures (as a percent)	1.50%
Valuation assumptions
Dividend yield (as a percent)	0.00%
Number of shares
Outstanding at the beginning of the period (in shares)	1,870	1,730
Granted (in shares)	215	140	1,730
Exercised (in shares)	(15)
Forfeited or expired (in shares)	(27)
Outstanding at the end of the period (in shares)	2,043	1,870	1,730
Vested at the end of the period (in shares)	1,065
Exercisable at the end of the period (in shares)	1,065
Weighted-average exercise price
Outstanding at the beginning of the period (in dollars per share) | $ / shares	$ 11.23
Granted (in dollars per share) | $ / shares	13.61	$ 11.56	$ 11.20
Exercised (in dollars per share) | $ / shares	10.60
Forfeited or expired (in dollars per share) | $ / shares	10.60		$ 11.20
Outstanding at the end of the period (in dollars per share) | $ / shares	11.49	$ 11.23
Vested at the end of the period (in dollars per share) | $ / shares	11.33
Exercisable at the end of the period (in dollars per share) | $ / shares	$ 11.33
Weighted-average remaining contractual term
Granted	6 years 2 months 12 days	9 years 8 months 12 days	9 years 3 months 18 days
Outstanding	7 years 7 months 6 days	8 years 4 months 24 days	9 years 3 months 18 days
Vested at the end of the period	7 years 3 months 18 days
Exercisable at the end of the period	7 years 3 months 18 days
Aggregate intrinsic value
Outstanding at the beginning of the period (in dollars) | $	$ 4,721	$ 2,208
Granted (in dollars) | $			$ 1,157
Outstanding at the end of the period (in dollars) | $	6,740	$ 4,721	$ 2,208
Vested at the end of the period (in dollars) | $	3,696
Exercisable at the end of the period (in dollars) | $	$ 3,696
Weighted average grant date fair value of options granted (in dollars per share) | $ / shares	$ 4.13	$ 3.75	$ 4.21
Restricted Stock
Equity incentive plans
Granted (in shares)	99	79	1,195
Stock-based compensation
Unrecognized compensation cost related to non-vested restricted stock (in dollars) | $	$ 3,700
Weighted-average periods over which unrecognized compensation cost recognized	10 months 24 days
Number of shares
Outstanding at the beginning of the period (in shares)	719	945
Granted (in shares)	99	79	1,195
Vested (in shares)	(324)	(305)	(250)
Outstanding at the end of the period (in shares)	494	719	945
Weighted-average grant date fair value
Outstanding at the beginning of the period (in dollars per share) | $ / shares	$ 9.82	$ 10.18
Granted (in dollars per share) | $ / shares	12.42	11.34	$ 9.81
Vested (in dollars per share) | $ / shares	10.65	11.33	8.41
Outstanding at the end of the period (in dollars per share) | $ / shares	$ 9.79	$ 9.82	$ 10.18
Time Based Restricted Stock and Stock Option
Equity incentive plans
Number of equal annual installments for vesting of awards | item	3
Time Based Stock Option | Black Scholes Pricing Model
Valuation assumptions
Risk-free interest rate, minimum (as a percent)	1.76%	1.76%	0.93%
Risk-free interest rate, maximum (as a percent)	2.12%	1.92%	2.03%
Volatility, minimum (as a percent)	25.80%	28.40%	34.40%
Volatility, maximum (as a percent)	29.50%	30.90%	36.70%
Weighted-average expected term	6 years 3 months 18 days		6 years
Time Based Stock Option | Black Scholes Pricing Model | Maximum
Valuation assumptions
Weighted-average expected term		6 years 3 months 18 days
Time Based Stock Option | Black Scholes Pricing Model | Minimum
Valuation assumptions
Weighted-average expected term		6 years
Time Based Restricted Stock
Weighted-average grant date fair value
Vesting period	3 years
Event Based Restricted Stock and Stock Option | Common Class A
Equity incentive plans
Closing price per share to be attained for vesting of awards to begin (in dollars per share) | $ / shares	$ 15.00
Event Based Restricted Stock and Stock Option | Common Class A | Minimum
Equity incentive plans
Number of trading days on which the closing price per share should attain the specified price per share for vesting of awards to begin | item	10
Event Based Stock Option
Aggregate intrinsic value
Unvested options	300
Event Based Restricted Stock
Aggregate intrinsic value
Unvested options	200

XML

Stockholders' Equity (Details 3) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2015 USD ($) $ / shares $ / item shares	Dec. 31, 2015 USD ($) item $ / shares $ / item shares	Dec. 31, 2014 USD ($)
Warrants
Exercise price of warrants per half share | $ / item	6.00	6.00
Minimum number of warrants exercisable by holder (in shares)		2
Exercise price of warrants (in dollars per share) | $ / shares	$ 12.00	$ 12.00
Issued (in shares)	14,700,000	14,700,000
Number of warrants repurchased	1,300,000
Total cost of warrants repurchase | $	$ 1,800
Outstanding (in shares)	13,300,000	13,300,000
Number of warrants that may be called for redemption (in shares)		8,700,000
Proceeds from exercise of warrant | $		$ 60	$ 1
Common Class A
Warrants
Number of shares entitled to warrant holders (as a percent)	0.5	0.5
Warrants exercisable into number of shares	6,700,000	6,700,000
Trigger price of stock in order to provide for redemption of warrants at option of the Company (in dollars per share) | $ / shares		$ 18.00
Number of trading days through which last sales price of common stock is reported for warrant redemption | item		20
Period of aggregate number of trading days through which last sales price of common stock is reported for warrant redemption		30 days
Shares issued upon exercise of warrants		5,000
Number of warrants exercised		10,000
Proceeds from exercise of warrant | $		$ 100

XML

Commitments (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Commitments
Rental expense	$ 600	$ 300	$ 200
Future minimum payments for operating leases
2016	296
2017	388
2018	383
2019	335
2020 and thereafter	1,150
Total	2,552
Future minimum payments for other commitments
2016	7,093
2017	3,413
2018	2,561
2019	1,260
2020 and thereafter	631
Total	14,958
Future minimum payments for operating leases and other commitments
2016	7,389
2017	3,801
2018	2,944
2019	1,595
2020 and thereafter	1,781
Total	$ 17,510

XML

Retirement Plans (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) employee item	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Projected benefit obligation:
Balance, beginning of the year	$ 2,682	$ 2,114
Service cost	112	82	$ 83
Interest cost	102	105	84
Actuarial loss	53	457
Benefits paid to participants	(84)	(76)
Balance, end of year	2,865	2,682	2,114
Funded status of the plan
Excess of benefit obligation over the value of plan assets	(2,865)	(2,682)	(2,114)
Unrecognized net actuarial loss	905	904	473
Unrecognized prior service cost	69	86	103
Accrued benefit cost	(1,891)	(1,692)	(1,538)
Net amounts recognized in the consolidated balance sheets
Accrued benefit cost	(2,865)	(2,682)
Accumulated other comprehensive loss	974	990
Accrued benefit cost	(1,891)	$ (1,692)	(1,538)
Benefits expected to be paid in each of the next five years and thereafter
2016	146
2017	185
2018	222
2019	127
2020	153
2021 through 2025	958
Total	$ 1,791
Weighted-average rates used
Discount rate on the benefit obligation (as a percent)	3.90%	3.80%
Rate of employee compensation increase (as a percent)	4.00%	4.00%
Pension expense
Service cost	$ 112	$ 82	83
Interest cost	102	105	84
Amortization of prior service cost	17	17	19
Net loss amortization	51	27	36
Net periodic benefit cost	$ 282	$ 231	$ 222
WAPA
Number of months to be in service for applicability of retirement plan	3 months
Number of weeks per year of service for one-time lump sum payment at retirement	14 days
Maximum number of retirees per year under the plan | employee	5
Number of retirees per year under the retirement plan | item	164
WAPA | Maximum
Number of weeks per year of service for one-time lump sum payment at retirement	315 days

XML

Retirement Plans (Details 2) - Multiemployer Plans, Pension - WAPA $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) item	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Multiemployer pension
Number of collective bargaining agreements | item	2
Renewal period after expiration	18 months
Additional plan commitment period	5 years
Contribution to the plan assets (as a percent)		5.00%
Contributions | $	$ 151	$ 144	$ 144
Beginning on January 1, 2013
Multiemployer pension
Increase in the contribution rate agreed by the company under the "preferred schedule" of the Rehabilitation Plan (as a percent)	3.0
Beginning on January 1, 2014
Multiemployer pension
Increase in the contribution rate agreed by the company under the "preferred schedule" of the Rehabilitation Plan (as a percent)	3.0
Beginning on January 1, 2015
Multiemployer pension
Increase in the contribution rate agreed by the company under the "preferred schedule" of the Rehabilitation Plan (as a percent)	3
Starting January 1, 2016
Multiemployer pension
Increase in the contribution rate agreed by the company under the "preferred schedule" of the Rehabilitation Plan (as a percent)	3

XML

Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended												12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Data (Unaudited)
Net revenues	$ 36,236	$ 31,465	$ 32,618	$ 29,471	$ 33,202	$ 28,781	$ 29,055	$ 20,951	$ 25,876	$ 23,705	$ 22,929	$ 13,495	$ 129,790	$ 111,989	$ 86,005
Operating (loss) income	11,079	7,951	8,780	7,056	10,211	5,559	6,612	3,647	5,019	4,110	(1,292)	(117)	34,867	26,027	7,722
Net income (loss)	$ 4,934	$ 2,910	$ 3,431	$ 2,462	$ 4,330	$ 663	$ 5,318	$ 248	$ 2,639	$ (3,985)	$ (2,426)	$ (525)	$ 13,739	$ 10,557	$ (4,297)
Earnings (loss) per share:
Basic (in dollars per share)	$ 0.11	$ 0.07	$ 0.08	$ 0.06	$ 0.10	$ 0.02	$ 0.13	$ 0.01	$ 0.06	$ (0.09)	$ (0.06)	$ (525)	$ 0.32	$ 0.25	$ (0.14)
Dilutive (in dollars per share)	$ 0.11	$ 0.07	$ 0.08	$ 0.06	$ 0.10	$ 0.02	$ 0.13	$ 0.01	$ 0.06	$ (0.09)	$ (0.06)	$ (525)	$ 0.31	$ 0.25	$ (0.14)