Discovery’s Zaslav: Eurosport will be “ESPN of Europe”

David Zaslav

Discovery plans to deepen Eurosport’s local presence in key markets, including the acquisition of local content rights, possibly in partnership with local distribution platforms, according to Discovery president and CEO David Zaslav.

Speaking on a conference call after Discovery announced strong 2013 financials, Discovery said that Eurosport is “the ESPN of Europe” and “a fantastic asset”.

“There is no platform like Eurosport. In many ways, it’s the ESPN of Europe. It’s in 55 countries. And so as we look at what we can do with it, the question is, are there opportunities to get longer-term growth by stepping up in certain markets for more sports?” said Zaslav.

“If we do, do it, there’s a good chance we’ll be doing it in a joint bidding with a distributor or a player in the market. We’ll be disciplined about it, but we’re going to look at all options.”

Discovery last month brought forward its plan to up its stake in the European sports network from 20% to 51%.

Zaslav said that consolidation among pay TV operators was a key factor in Discovery’s drive to achieve greater scale by launching and acquiring additional channels.

“We’ve been in a race. One of the reasons why we’ve launched seven new channels over the last five years while we’ve invested in content is both because of consolidation and because content is moving onto other platforms,” said Zaslav.

“If you have strong brands and great shows, we think that could be more growth and more opportunity. But if your content isn’t strong enough, that consolidation in Europe, consolidation around the world could be a challenge.”

Strong growth from its international networks division contributed to a 23% rise in Discovery Networks full-year revenues for 2013, as well as growth in net income to over US$1 billion (€734 million).

Fourth quarter revenues grew even more strongly – up 28% to US$1.537 billion, led by 64% growth in international.

International networks over the full year grew by 51% to US$2.474 billion. Operating income before depreciation and amortisation was up 35% to US$976 million.

Discovery now expects 2014 revenues of between US$6.45 billion and US$5.625 billion with net income of between US$1.2 and US$1.3 billion.

Internationally, Discovery saw advertising revenues rise by 23% in local currency terms excluding newly acquired businesses, led by higher prices in Latin America and western Europe.

Domestic US networks income grew by 5% in the fourth quarter, and 7% over the full year, to US$2.952 billion. Full year OIBDA was up 5% to US$1.708 billion.

Discovery posted global revenues of US$5.535 billion for the year, while net income was up 14% to US$1.075 billion.

“Discovery’s strong 2013 results reflect the additional market share we are capturing around the globe as we further invest in our diverse content portfolio and capitalize on the growth opportunities available across the unmatched worldwide distribution platform we have developed,” said Zaslav.

“At the same time, the strength of our balance sheet enabled us to make several strategic investments that complement our existing businesses and further bolster the long-term growth profile of the company, while also providing us with the ability to return significant capital to shareholders.  As we move into 2014, we remain focused on maintaining the financial momentum we have generated consistently over the past several years while further investing in our brands and strategic growth initiatives so we can deliver additional shareholder value moving forward.”