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Tag: David Zaslav

  • Discovery Communications gets US govt nod for Scripps Networks merger

    Discovery Communications gets US govt nod for Scripps Networks merger

    MUMBAI: Discovery Communications (Discovery) can finally heave a sigh of relief as the United States Department of Justice has closed its investigation into the company’s proposed acquisition of Scripps Networks Interactive (Scripps Networks). Back in 2017, the American mass media company agreed to purchase Scripps Networks in a deal valued at $14.6 billion.

    According to the deal between the companies last July, the collaboration is expected to extend Scripps Networks’ content to international audiences, increase opportunities for advertisers and digital distribution partners and unlock significant cost synergies.

    After the conclusion of the investigation, Discovery president and CEO David Zaslav said, “We are pleased to have passed this significant regulatory milestone on our path to acquire Scripps Networks Interactive.” He termed the conclusion as “an integral step toward closing our enthusiast audiences around the world.”

    The closing of the proposed deal now depends on completion of a review in Ireland and other customary closing conditions. The transaction is expected to close by the end of the first quarter of 2018 ended 31 March. Till then, the companies will continue to operate as separate and independent entities.

    Also Read:

    Discovery Jeet signs content deal with Netflix

    Discovery Jeet postpones 2 show launches to late March

  • Discovery Communications to move global headquarters to New York

    Discovery Communications to move global headquarters to New York

    MUMBAI: Discovery Communications, in a recent release, has announced plans to relocate its global headquarters from Silver Spring, Maryland, to New York City in 2019. Contingent upon the closing of the company’s acquisition of Scripps Networks Interactive, Discovery also will establish a National Operations Headquarters at Scripps’ current campus in Knoxville, Tennessee.

    “The media industry is rapidly evolving, increasingly global, more consumer focused and more multi-platform and Discovery must evolve with it,” said Discovery’s president and CEO David Zaslav, announcing the changes first to employees. “The decision to move our global headquarters from its founding home is one we do not make lightly. We remain unwavering in our support of the Maryland and Greater Washington, DC area and we thank the leadership of the State of Maryland, Montgomery County and, most importantly, our employees for their cooperation and understanding as we make this important next step for the long-term success of Discovery.”

    To take advantage of the proximity to business, investment and production partners in New York, the company will bring together all current Discovery and, pending closing of the transaction, Scripps employees currently located across several different facilities in New York in a new global headquarters. Planning for the space and location in New York is underway with an anticipated move to a new building by the second half of 2019.

    Following an in-depth financial and operational analysis, and based on the strengths, capabilities and advantages of the current Scripps Knoxville campus, the facility will become Discovery’s National Operations Headquarters pending closure of the transaction. Knoxville is a self-contained campus with many amenities and benefits for a National Operations Headquarters, including a low cost of living, and built-in facilities and operational capabilities. It will continue to house the major Scripps brands and creative digital teams along with corporate functions.

    Discovery’s state-of-the-art media distribution facility in Sterling, Virginia, which originates over 80 global feeds, will become a global technology centre.

    Founded in Landover, Maryland, in 1985, Discovery moved its global headquarters to Bethesda, Maryland in 1991 and then to its current headquarters building in Silver Spring in 2003. The company employs approximately 1,300 people in the Silver Spring area. Scripps’ Knoxville headquarters houses more than 1,000. The sale and closure of Discovery’s Silver Spring building is expected approximately one year from closing the Scripps transaction.

    Also read:

    Discovery Jeet gears up for Feb 12 launch

    Discovery Jeet signs content deal with Netflix

    Video consumption by premium audience on digital exploding: Karan Bajaj

  • Discovery buys Scripps for $14.6 bn, to net 20% of US ad-pay-TV subs

    MUMBAI: Discovery Communications, Inc. and Scripps Networks Interactive, Inc. announced that they have signed a definitive agreement for Discovery to acquire Scripps in a cash-and-stock transaction valued at $14.6 billion, or $90 per share, based on Discovery’s Friday, July 21 closing price. The purchase price represents a premium of 34% to Scripps’ unaffected share price as of Tuesday, 18 July. The transaction is expected to close by early 2018.

    “This is an exciting new chapter for Discovery. Scripps is one of the best run media companies in the world with terrific assets, strong brands and popular talent and formats.  Our business is about great storytelling, authentic characters and passionate super fans. We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world,” said David Zaslav, President and CEO, Discovery Communications. 

    “Through the passion and dedication of our incredible employees, and with the support of the Scripps family, we have built a lifestyle content company that touches the lives of consumers every single day,” said Kenneth W. Lowe, Chairman, President & CEO, Scripps Networks Interactive. “This agreement with Discovery presents an unmatched opportunity for Scripps to grow its leading lifestyle brands across the world and on new and emerging channels including short-form, direct-to-consumer and streaming platforms.”

    New Innovator Across a Broad Portfolio of Entertainment Assets

    Together, Discovery and Scripps will offer a complementary and dynamic suite of brands. The combined company will produce approximately 8,000 hours of original programming annually, be home to approximately 300,000 hours of library content, and will generate a combined 7 billion short-form video streams monthly, demonstrating its commitment to delivering content as a top short-form provider.

    Combined, Discovery and Scripps will have nearly 20% share of ad-supported pay-TV audiences in the U.S. Additionally, the combined company will be home to five of the top pay-TV networks for women and will account for over 20% share of women watching primetime pay-TV in the U.S.

    The Combined Portfolio’s Brands Will Include: 

    Discovery: Discovery Channel, TLC, Investigation Discovery, Animal Planet, Science and Turbo/Velocity, as well as OWN in the U.S., Discovery Kids in Latin America, and Eurosport, the leading provider of locally relevant, premium sports and Home of the Olympic Games across Europe.

    Scripps: HGTV, Food Network, Travel Channel, DIY Network, Cooking Channel and Great American Country, as well as TVN, a premiere multi-platform provider of entertainment, lifestyle and news content in Poland; UKTV, an independent commercial joint venture with BBC Worldwide; Asian Food Channel, the first pan- regional TV food network in Asia; and lifestyle channel Fine Living Network.

    International Growth Opportunities

    The combination will extend Scripps’ brands, programming and talent to a broader international audience through Discovery’s best-in-class global distribution, sales and languaging infrastructure.  Discovery sees strong opportunities to strengthen its existing global female networks with select content from Food Network, HGTV and all the Scripps brands. Scripps also has a strong position in key international growth markets, including the U.K. and Poland, and will help fuel Discovery’s existing content pipeline in growth areas like Discovery’s Home and Health network in Latin America.

    Social, Mobile and Non-linear Growth Opportunities 

    The combined company will deliver 7 billion monthly short-form streams, bringing together Scripps’ established expertise in short-form video creation with Discovery’s investment in Group Nine Media to create a new scale player with a strong ability to compete for audiences and ad dollars. The combination will give Discovery an outstanding presence on new video and social media platforms. Additionally, Scripps Lifestyle Studios will become a key component of Discovery’s content engine, making the company a leader in key strategic areas such as data-driven ad sales, endemic advertising, and branded entertainment solutions. 

    Discovery’s added scale, content engine and multiple brand offerings will present a compelling opportunity for new digital distribution partners, including mobile, OTT, and direct-to-consumer platforms and offerings.

    Synergies

    The combination is expected to create significant cost synergies, estimated at approximately $350 million. The deal is expected to be accretive to Adjusted Earnings per Share and to Free Cash Flow in the first year after close.

    Transaction Details

    Scripps shareholders will receive $90 per share under the terms of the agreement, comprised of $63.00 per share in cash and $27.00 per share in Class C Common shares of Discovery stock, based on Discovery’s Friday, July 21 closing price. The stock portion will be subject to a collar based on the volume weighted average price of Discovery Class C Common Shares over the 15 trading days ending on the third trading day prior to closing (the “Average Discovery Price”). Scripps shareholders will receive 1.2096 Discovery Class C Common shares if the Average Discovery Price is below $22.32, and 0.9408 Discovery Class C Common shares if the Average Discovery Price is above $28.70.  If the Average Discovery Price is greater than or equal to $22.32 but less than or equal to $28.70, Scripps shareholders will receive a number of shares between 1.2096 and 0.9408 equal to $27.00 in value. If the Average Discovery Price is between $22.32 and $25.51, Discovery has the option to pay additional cash instead of issuing more shares.

    Scripps shareholders will have the option to elect to receive their consideration in cash, stock or the mixture described above, subject to pro rata cut backs to the extent cash or stock is oversubscribed.

    This purchase price implies a total transaction value of $14.6 billion, including the assumption of Scripps’ net debt of approximately $2.7 billion. Post-closing, Scripps’ shareholders will own approximately 20% of Discovery’s fully diluted common shares and Discovery’s shareholders will own approximately 80%. This calculation is based on the number of Discovery shares outstanding today.

    The cash portion of the purchase price will be financed with a combination of new debt and cash on hand. Discovery has secured fully committed financing from affiliates of Goldman Sachs & Co. LLC to fund the acquisition. Discovery expects to maintain investment grade ratings throughout this transaction. As part of its commitment to de-lever its balance sheet, Discovery intends to suspend its share repurchase program until such time as its credit metrics are in line with its rating. Specifically, Discovery expects to be below 3.5x gross debt to AOIBDA within the first two years after the transaction closes, using substantially all free cash flow to reduce pre-payable and/or short term debt. 

    Scripps CEO Ken Lowe is expected to join Discovery’s board of directors following the close of the transaction. The transaction is subject to approval by Discovery and Scripps’ shareholders, regulatory approvals, and other customary closing conditions.

    John C. Malone, Advance/Newhouse Programming Partnership (“ANPP”) and members of the Scripps family have entered into voting agreements to vote in favor of the transaction and take certain other actions, in each case subject to the terms and conditions of their respective agreements.

    In addition, ANPP has provided its consent, in its capacity as the holder of Discovery’s outstanding shares of Series A preferred stock, for Discovery to enter into the merger agreement and consummate the merger. In connection with this consent, Discovery and ANPP have entered into an exchange agreement pursuant to which ANPP will exchange all of its shares of Series A and Series C preferred stock of Discovery for shares of newly designated Series A-1 and Series C-1 preferred stock of Discovery. The exchange transaction will not change the aggregate number of shares of Discovery’s Series A common stock and Series C common stock that are beneficially owned by ANPP. The terms of the exchange agreement were negotiated, considered and approved by an independent committee of disinterested directors of Discovery, which committee was advised by independent financial advisors and legal counsel.

    Guggenheim Securities, LLC and Goldman Sachs & Co. LLC served as financial advisors and Debevoise & Plimpton LLP served as legal advisor to Discovery. Allen & Company LLC and J.P. Morgan Securities LLC served as financial advisors and Weil Gotshal & Manges LLP served as legal advisor to Scripps. Evercore Group L.L.C. served as financial advisor and Kirkland & Ellis served as legal advisor to the Scripps family. UBS Investment Bank served as financial advisor and Sullivan & Cromwell LLP served as legal advisor to Advance/Newhouse.

  • Discovery & Scripps reported to be discussing merger

    MUMBAI: Media companies Scripps Networks and Discovery Communications are reportedly in merger talks, supposedly revisiting a probable deal that did not materialise around three years ago.

    Channels of Scripps, which has a market value around US$ 8.8 billion, are — HGTV, Travel Channel and a significant major stake in Food Network. It has been seeking a purchaser when it is under pressure to grow, Reuters reported sources as saying. Discovery, which has around US$ 15 billion market value, telecasts a channel by the same name, as well as others such as Animal Planet and TLC, the WSJ added.

    Reuters sources added that Viacom Inc also was in discussion to buy Scripps. All three companies denied comment.

    A deal between Scripps and Discovery may lead to creation of a US$19-billion cable network that primarily concentrates on non-scripted shows.

    Discovery CEO David Zaslav had said that there were discussions about potential deals at a time when broadband and cable companies were merging and need content to de-commoditise and differentiate that pipe. RBC Capital Markets’ Steven Cahall had said that a combination of the non-fiction programmers made good sense.

    Also Read :

    Scripps TV looks for opportunities to grow, seeks to extend debt maturity

    Scripps Network not to renew deal with Netflix

  • Discovery’s International Networks ad rev down in 2016

    BENGALURU: Discovery Communications Inc., (DCI) reported 1.6 percent growth in revenue at $ 6,497 million for the year ended 31 December 2016 (FY-16, current year) as compared to the $6,394 million in the previous year. Overall, DCI reported adjusted OIBDA growth of 1.2 percent in the current year at $2,426 million as compared to $2,398 million in FY-15.

    The company’s International Networks segment’s numbers were damped by a 5.5 percent decline in ad revenues to $1,279 million in the current year as compared to $1,353 million FY-15. International Networks Distribution revenue in FY-16 increased 2.7 percent to $1,681 million from $1,637 million in the previous year. International Networks total revenue declined 1.7 percent in FY-16 to $3,040 million from $3,092 million in the previous year.

    Adjusted Operating Income before Depreciation and Amortisation (OIBDA) for International Networks in the current year declined 11.8 percent to $848 millon from $961 million in the previous year. Operating Income for International Networks in FY-16 declined 11.7 percent to $597 million from $676 million in the previous year.

    The company attributes the decline in revenue to its sale of SBS Networks and currency effects and decline in operating incomes and revenue of its International Networks segment to changes in foreign exchange rates. Changes in foreign currency exchange rates reduced full year International Networks’ revenues and Adjusted OIBDA growth by 6 percent and 8 percent, respectively.

    “Discovery’s diversified set of nonfiction, sports and kids’ entertainment brands, and strong strategic positioning continued to drive attractive distribution agreements, helping to deliver solid operating and financial results in 2016,” said DCI president and CEO David Zaslav. “As we begin 2017, we will continue to invest in our premier global IP and brands to nourish fans across all screens, all platforms and all services to drive shareholder value and propel our business for years to come amid the rapidly changing media landscape.

    DCI’s US Networks reported 4.9 percent growth in revenue for FY-16 at $3,285 million as compared to $3,131 million in the previous year. US Networks distribution revenue increased 7.1 percent in FY-16 to $1,532 million from $1,431 million in FY-15. US Networks advertising revenue in the current year increased 2.4 percent to $1,690 million from $1,650 million in the previous year.

    The company says that Distribution revenue growth was primarily driven by higher rates, partially offset by a slight decline in subscribers. Advertising revenues increased 2 percent primarily due to higher pricing and inventory management, partially offset by lower delivery.

    US Networks Operating Income increased 12.4 percent in the current year to $1,195 million from $1,704 million in the previous year. The segment’s adjusted OIBDA increased 8.3 percent in FY-16 to $1,922 million from $1,774 million in FY-15. Adjusted OIBDA due to higher revenues and flat costs says the company.

    The company’s reported 0.6 percent growth in its Education and other segment revenue at $174 million in FY-16 as compared to $173 million in the previous year. The segment’s OIBDA in the current year was negative $10 million as compared to $2 million in the previous year. The company says that Education and Other revenues for the full year 2016 were consistent with the prior year. Adjusted OIBDA decreased primarily due to additional investments in the Education business.

  • Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    BENGALURU: An overall 4.1 per cent decline in advertising revenue for the quarter ended 30 September 2016 (Q3-16, current quarter) vis-à-vis the corresponding year ago quarter resulted in flat revenue for Discovery Communications Inc., (Discovery). The company reported overall revenue of $1,556 million for the current quarter versus $1,557 million in Q2-15. Overall Advertising revenue declined in Q3-16 to $670 million as compared to $699 million in Q2-15.

    Discovery’s other major revenue stream – Distribution, reported 3.9 per cent year-over-year (y-o-y) increase in the current quarter at $806 million as compared to $770 million. Discovery’s ‘Other’ revenue declined 2.4 per cent y-o-y to $80 million from $82 million.

    Operating income declined 9.3 per cent y-o-y in Q3-16 to $458 million from $505 million. The company’s adjusted Operating Income before Depreciation and Amortisation (OIBDA) declined 2.4 per cent in the current quarter to $562 million from $576 million.

    Geographical breakup:

    US Networks

    Discovery’s US Network’s revenue increased 1.5 per cent y-o-y in Q3-16 to $793 million from $781 million.  US Networks adjusted OIBDA improved 3.4 per cent y-o-y in Q3-16 to $458 million from $443 million.

    US Networks distribution revenue in the current quarter increased 6.7 per cent y-o-y to $458 million versus $443 million. US Networks advertising revenue declined 3.4 per cent y-o-y to $396 million in the current quarter from $410 million. US Networks ‘Other’ revenues in Q3-16 increased 14.3 per cent y-o-y to $16 million from $14 million.

    Discovery says that Distribution revenue growth was primarily driven by higher rates, partially offset by a slight decline in subscribers. Advertising revenues decreased primarily due to expected ratings declines, partially offset by higher pricing and inventory management.

    US Networks Operating expenses decreased 1 per cent mainly due to lower content amortization, partially offset by higher marketing costs. Adjusted OIBDA increased due to higher revenues and lower operating expenses.

    International Networks

    Discovery’s International Revenue in Q3-16 declined 2.7 per cent to $720 million from $740 million.  International Networks OIBDA declined 16.1 y-o-y per cent in the current quarter to $183 million from $218 million.

    International Networks Distribution revenue increased 1.4 per cent y-o-y in Q3-16 to $425 million from $419 million. International Networks Advertising revenue in the current quarter declined 5.5 per cent y-o-y in the current quarter to $273 million from $289 million. International Networks ‘Other’ revenue in Q3-16 declined 31.25 per cent y-o-y to $22 million from $32 million.

    The company says that changes in foreign currency exchange rates reduced third quarter International revenues and adjusted OIBDA growth by 5 per cent and 7 per cent, respectively. Distribution revenues, excluding the impact of currency effects, grew 8 per cent mostly due to higher affiliate rates in Latin America, Northern Europe and CEEMEA as well as higher volume in Latin America.

    Advertising revenues, excluding the impact of currency effects, declined, primarily due to lower ratings and pricing in Northern Europe, partially offset by higher volume in Southern Europe. Other revenues declined primarily due to lower Eurosport sub-licensing revenues.

    Education and Other

    ‘Education and Other’ revenues increased 19.4 per cent y-o-y to $43 million in the current quarter from $36 million. ‘Education and Other OIBDA improved by 80 per cent to a loss of $1 million from a loss of $5 million.

    The company says that Education and Other revenues for the third quarter increased by $7 million primarily due to higher production deliveries at the Studios production business and increased international revenues at the Education business. Adjusted OIBDA improved primarily due to higher revenues, partially offset by additional investments in the Education business.

    Other Developments

    On October 13, 2016, Discovery announced a plan to contribute $100 million and its digital network Seeker and production studio SourceFed in exchange for a 39 per cent minority interest in a new holding company, Group Nine Media. Group Nine Media includes digital companies Thrillist Media Group, Now This Media, and The Dodo. Discovery has the option to buy a controlling stake in Group Nine Media in the future. The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions.

    Company speak

    “While we faced challenging but expected headwinds this quarter, Discovery is well positioned for long-term growth driven by our well-defined global brands, differentiated content and favourable distribution agreements,” said Discovery president and CEO David Zaslav, “We have continued to strengthen and maximize our traditional pay-TV offering with robust new programming while aggressively exploiting new opportunities to leverage our content across numerous digital platforms around the world. Amid an ever shifting global media ecosystem, Discovery is evolving to reach more consumers on more screens and platforms than ever before.”

  • Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    Lower Ad revenue curtails Discovery Communications Q3-16 numbers

    BENGALURU: An overall 4.1 per cent decline in advertising revenue for the quarter ended 30 September 2016 (Q3-16, current quarter) vis-à-vis the corresponding year ago quarter resulted in flat revenue for Discovery Communications Inc., (Discovery). The company reported overall revenue of $1,556 million for the current quarter versus $1,557 million in Q2-15. Overall Advertising revenue declined in Q3-16 to $670 million as compared to $699 million in Q2-15.

    Discovery’s other major revenue stream – Distribution, reported 3.9 per cent year-over-year (y-o-y) increase in the current quarter at $806 million as compared to $770 million. Discovery’s ‘Other’ revenue declined 2.4 per cent y-o-y to $80 million from $82 million.

    Operating income declined 9.3 per cent y-o-y in Q3-16 to $458 million from $505 million. The company’s adjusted Operating Income before Depreciation and Amortisation (OIBDA) declined 2.4 per cent in the current quarter to $562 million from $576 million.

    Geographical breakup:

    US Networks

    Discovery’s US Network’s revenue increased 1.5 per cent y-o-y in Q3-16 to $793 million from $781 million.  US Networks adjusted OIBDA improved 3.4 per cent y-o-y in Q3-16 to $458 million from $443 million.

    US Networks distribution revenue in the current quarter increased 6.7 per cent y-o-y to $458 million versus $443 million. US Networks advertising revenue declined 3.4 per cent y-o-y to $396 million in the current quarter from $410 million. US Networks ‘Other’ revenues in Q3-16 increased 14.3 per cent y-o-y to $16 million from $14 million.

    Discovery says that Distribution revenue growth was primarily driven by higher rates, partially offset by a slight decline in subscribers. Advertising revenues decreased primarily due to expected ratings declines, partially offset by higher pricing and inventory management.

    US Networks Operating expenses decreased 1 per cent mainly due to lower content amortization, partially offset by higher marketing costs. Adjusted OIBDA increased due to higher revenues and lower operating expenses.

    International Networks

    Discovery’s International Revenue in Q3-16 declined 2.7 per cent to $720 million from $740 million.  International Networks OIBDA declined 16.1 y-o-y per cent in the current quarter to $183 million from $218 million.

    International Networks Distribution revenue increased 1.4 per cent y-o-y in Q3-16 to $425 million from $419 million. International Networks Advertising revenue in the current quarter declined 5.5 per cent y-o-y in the current quarter to $273 million from $289 million. International Networks ‘Other’ revenue in Q3-16 declined 31.25 per cent y-o-y to $22 million from $32 million.

    The company says that changes in foreign currency exchange rates reduced third quarter International revenues and adjusted OIBDA growth by 5 per cent and 7 per cent, respectively. Distribution revenues, excluding the impact of currency effects, grew 8 per cent mostly due to higher affiliate rates in Latin America, Northern Europe and CEEMEA as well as higher volume in Latin America.

    Advertising revenues, excluding the impact of currency effects, declined, primarily due to lower ratings and pricing in Northern Europe, partially offset by higher volume in Southern Europe. Other revenues declined primarily due to lower Eurosport sub-licensing revenues.

    Education and Other

    ‘Education and Other’ revenues increased 19.4 per cent y-o-y to $43 million in the current quarter from $36 million. ‘Education and Other OIBDA improved by 80 per cent to a loss of $1 million from a loss of $5 million.

    The company says that Education and Other revenues for the third quarter increased by $7 million primarily due to higher production deliveries at the Studios production business and increased international revenues at the Education business. Adjusted OIBDA improved primarily due to higher revenues, partially offset by additional investments in the Education business.

    Other Developments

    On October 13, 2016, Discovery announced a plan to contribute $100 million and its digital network Seeker and production studio SourceFed in exchange for a 39 per cent minority interest in a new holding company, Group Nine Media. Group Nine Media includes digital companies Thrillist Media Group, Now This Media, and The Dodo. Discovery has the option to buy a controlling stake in Group Nine Media in the future. The transaction is expected to close in the fourth quarter of 2016, subject to customary closing conditions.

    Company speak

    “While we faced challenging but expected headwinds this quarter, Discovery is well positioned for long-term growth driven by our well-defined global brands, differentiated content and favourable distribution agreements,” said Discovery president and CEO David Zaslav, “We have continued to strengthen and maximize our traditional pay-TV offering with robust new programming while aggressively exploiting new opportunities to leverage our content across numerous digital platforms around the world. Amid an ever shifting global media ecosystem, Discovery is evolving to reach more consumers on more screens and platforms than ever before.”

  • Q2-16: Distribution, other revenue push Discovery Communications revenue up 3.3 percent

    Q2-16: Distribution, other revenue push Discovery Communications revenue up 3.3 percent

    BENGALURU: An increase of $39 million (4.9 percent increase) in Distribution and an increase of $17 million (26.2 percent increase) of ‘Other’ revenue boosted Discovery Communications Inc., (Discovery) revenue by 3.3 percent for the quarter ended 30 June 2016 (Q2-16, current quarter) vis-à-vis the corresponding year ago quarter. Discovery reported total revenue of $1,708 million in Q2-16 as compared to $1,654 million in Q2-15.

    Discovery reported Distribution revenue of $813 million in the current quarter as compared to $775 million in the corresponding year ago quarter. Advertising revenue in Q2-16 was flat y-o-y (declined by $1 million or 0.1 percent) at $813 million as compared to $814 million in Q2-15. ‘Other’ revenue in Q2-16 was $82 million as compared to $65 million in the corresponding year ago quarter.

    “Discovery posted a solid quarter of growth and financial results by investing in premium and diversified content that fuels the passion of superfans on pay-TV, free-to-air, direct-to-consumer and digital platforms. Our differentiated portfolio of nonfiction, sports and children’s content in more than 220 markets positions Discovery for continued growth and shareholder value creation in the months and years to come,” said Discovery president and CEO David Zaslav.

    Segment results

    Discovery reports numbers from three segments – US Networks, International Networks, and Education and ‘Other’

    US Networks

    US Networks revenue in Q2-16 increased 7.2 percent to $873 million as compared to $812 million in Q2-15. Adjusted OIBDA in the current quarter from this segment increased 9.7 percent to $544 million (62 percent margin) from $496 million (61 percent margin) in Q2-15.

    Distribution revenue from US Networks increased 8.1 percent in Q2-16 to $386 million from $357 million in Q2-15. US Networks Advertising revenue increased 5.4 percent in the current quarter to $471 million from $447 million in Q2-15. US Networks ‘Other’ revenue in Q2-16 increased 60 percent y-o-y to $16 million from $10 million.

    Discovery says that US Networks Distribution revenue growth was primarily driven by higher rates, partially offset by slight declines in subscribers. Advertising revenues increased primarily due to higher pricing and inventory management, partially offset by lower delivery.

    International Networks

    Revenue from International Networks segment in Q2-16 declined 1.4 percent to $790 million from $819 million in the corresponding year ago quarter. Adjusted OIBDA from the segment in the current quarter declined 6.4 percent to $249 million from $266 million in Q2-15.

    International Networks Distribution revenue increased 2.2 percent to $427 million in Q2-16 as compared to $418 million in Q2-15. International Networks Advertising revenue in Q2-16 declined 6.8 percent to $342 million from $367 million in Q2-15. International Networks ‘Other’ revenue in the current quarter increased 31.3 percent to $21 million from $16 million.

    Discovery says changes in foreign currency exchange rates reduced second quarter international revenues and Adjusted OIBDA growth by 4 percent and 10 percent, respectively. Excluding currency effects and the impact of SBS Radio, total revenues were up 8 percent. Distribution revenues, excluding the impact of currency effects, grew 10 percent mostly due to higher affiliate rates in Northern Europe and CEEMEA as well as increased affiliate rates and subscribers in Latin America. Advertising revenues, excluding the impact of SBS Radio and currency effects, were up 5 percent, primarily due to higher volume and ratings in Southern Europe as well as higher pricing, ratings and volume in CEEMEA, partially offset by a decline in Northern Europe due to the impact of Brexit and lower ratings.

    Education and other

    Education and other revenue in Q2-16 increased 15 percent to $46 million from $40 million in Q2-15. The segment reported slightly higher negative adjusted OIBDA (reported a higher operating loss) at $3 million in the current quarter as compared to negative adjusted OIBDA of $2million in Q2-15.

    Discovery says Education and Other revenues for the second quarter increased by $6 million primarily due to higher external production deliveries at the Studios production business. Adjusted OIBDA remained relatively consistent primarily due to higher external Studios production deliveries, offset by additional investments in Education Techbooks.

     

  • Q2-16: Distribution, other revenue push Discovery Communications revenue up 3.3 percent

    Q2-16: Distribution, other revenue push Discovery Communications revenue up 3.3 percent

    BENGALURU: An increase of $39 million (4.9 percent increase) in Distribution and an increase of $17 million (26.2 percent increase) of ‘Other’ revenue boosted Discovery Communications Inc., (Discovery) revenue by 3.3 percent for the quarter ended 30 June 2016 (Q2-16, current quarter) vis-à-vis the corresponding year ago quarter. Discovery reported total revenue of $1,708 million in Q2-16 as compared to $1,654 million in Q2-15.

    Discovery reported Distribution revenue of $813 million in the current quarter as compared to $775 million in the corresponding year ago quarter. Advertising revenue in Q2-16 was flat y-o-y (declined by $1 million or 0.1 percent) at $813 million as compared to $814 million in Q2-15. ‘Other’ revenue in Q2-16 was $82 million as compared to $65 million in the corresponding year ago quarter.

    “Discovery posted a solid quarter of growth and financial results by investing in premium and diversified content that fuels the passion of superfans on pay-TV, free-to-air, direct-to-consumer and digital platforms. Our differentiated portfolio of nonfiction, sports and children’s content in more than 220 markets positions Discovery for continued growth and shareholder value creation in the months and years to come,” said Discovery president and CEO David Zaslav.

    Segment results

    Discovery reports numbers from three segments – US Networks, International Networks, and Education and ‘Other’

    US Networks

    US Networks revenue in Q2-16 increased 7.2 percent to $873 million as compared to $812 million in Q2-15. Adjusted OIBDA in the current quarter from this segment increased 9.7 percent to $544 million (62 percent margin) from $496 million (61 percent margin) in Q2-15.

    Distribution revenue from US Networks increased 8.1 percent in Q2-16 to $386 million from $357 million in Q2-15. US Networks Advertising revenue increased 5.4 percent in the current quarter to $471 million from $447 million in Q2-15. US Networks ‘Other’ revenue in Q2-16 increased 60 percent y-o-y to $16 million from $10 million.

    Discovery says that US Networks Distribution revenue growth was primarily driven by higher rates, partially offset by slight declines in subscribers. Advertising revenues increased primarily due to higher pricing and inventory management, partially offset by lower delivery.

    International Networks

    Revenue from International Networks segment in Q2-16 declined 1.4 percent to $790 million from $819 million in the corresponding year ago quarter. Adjusted OIBDA from the segment in the current quarter declined 6.4 percent to $249 million from $266 million in Q2-15.

    International Networks Distribution revenue increased 2.2 percent to $427 million in Q2-16 as compared to $418 million in Q2-15. International Networks Advertising revenue in Q2-16 declined 6.8 percent to $342 million from $367 million in Q2-15. International Networks ‘Other’ revenue in the current quarter increased 31.3 percent to $21 million from $16 million.

    Discovery says changes in foreign currency exchange rates reduced second quarter international revenues and Adjusted OIBDA growth by 4 percent and 10 percent, respectively. Excluding currency effects and the impact of SBS Radio, total revenues were up 8 percent. Distribution revenues, excluding the impact of currency effects, grew 10 percent mostly due to higher affiliate rates in Northern Europe and CEEMEA as well as increased affiliate rates and subscribers in Latin America. Advertising revenues, excluding the impact of SBS Radio and currency effects, were up 5 percent, primarily due to higher volume and ratings in Southern Europe as well as higher pricing, ratings and volume in CEEMEA, partially offset by a decline in Northern Europe due to the impact of Brexit and lower ratings.

    Education and other

    Education and other revenue in Q2-16 increased 15 percent to $46 million from $40 million in Q2-15. The segment reported slightly higher negative adjusted OIBDA (reported a higher operating loss) at $3 million in the current quarter as compared to negative adjusted OIBDA of $2million in Q2-15.

    Discovery says Education and Other revenues for the second quarter increased by $6 million primarily due to higher external production deliveries at the Studios production business. Adjusted OIBDA remained relatively consistent primarily due to higher external Studios production deliveries, offset by additional investments in Education Techbooks.

     

  • FY-2015: Forex retards Discovery Communications revenue, lowers adjusted OIBDA

    FY-2015: Forex retards Discovery Communications revenue, lowers adjusted OIBDA

    BENGALURU: Discovery Communications Inc. (Discovery) US Networks segment reported 6.1 per cent growth in revenue for the year ended 31 December, 2015 (FY-2015, current year) at $3,131 million as compared to $2,950 million in the previous year. These gains were offset by a 2.1 per cent decline in revenues in FY-2015 by its International Networks segment to $3,092 million as compared to $3,157 million in the previous year, primarily due to currency effects. Discovery reported revenue of $6,394 million in the current year as compared to $6,265 million in the previous year. 

    Adjusted Operating Income Before Depreciation and Amortisation (OIBDA) declined 3.7 per cent in FY-2015 to $2,398 million as compared to $2,491 million in the previous year. Net income available to Discovery in FY-2015 declined 9.2 per cent to $1,034 million ($1.58 per diluted share) compared to $1,139 million ($1.66 per diluted share) for FY-2014, primarily due to currency exchange rates, higher losses associated with the sale of businesses and lower equity earnings, partially offset by a decrease in taxes, restructuring costs and equity-based compensation.

    Discovery president and CEO David Zaslav said, “In 2015, Discovery Communications continued to build momentum with our unmatched worldwide brands and leading multiplatform distribution network. We surpassed three billion cumulative viewers, launched more new networks and increased audience and market share, all of which helped to drive steady global growth and strong financial results. Propelled by our category leadership, broad rights ownership and content and brand expansion across platforms, Discovery is well positioned to thrive in the rapidly evolving media landscape and to drive continued shareholder value in the years ahead.”

    For the quarter ended 31 December, 2015 (Q4-2015, current quarter), the company reported 1.8 per cent decline in revenue to $1,646 million as compared to $1,676 in the corresponding prior year quarter also primarily due to currency effects says Discovery. While US Networks reported 5.6 per cent increased revenues for Q4-2015 at $787 million from $745 million, International Networks revenue declined 7.7 per cent to $816 million from $884 million in Q4-2014. Adjusted OIBDA declined 10 per cent to $574 million in Q4-2015 from $638 million in Q4-2014. US Networks adjusted OIBDA in the current quarter increased 1.2 per cent to $410 million from $405 million. International Networks adjusted OIBDA declined 20.2 per cent to $262 million from $329 million in the corresponding prior year quarter.

    In Q4-2015, net income available to Discovery stockholders decreased to $219 million ($0.34 per diluted share) compared to $250 million ($0.38 per diluted share) for Q4-2014, primarily due to foreign currency exchange rates, losses associated with the sale of businesses and higher net income attributable to non-controlling interests, partially offset by a decrease in restructuring costs and higher earnings related to equity-method instruments says the company.

    Advertising and Distribution numbers

    Distribution revenues in FY-2015 increased eight per cent to $3,068 million from $2,842 in the previous year. Advertising revenues in FY-2015 declined 2.8 per cent to $3,004 million from $3,089 million in FY-2014. Discovery says that Distribution revenues, excluding the impact of Eurosport and currency effects, grew primarily due to increased rates and subscribers in Latin America as well as increased subscribers in CEEMEA. Advertising revenues, excluding the impact of Eurosport, SBS Radio and currency effects, were up primarily due to higher pricing and ratings in Southern Europe, higher pricing, volume and ratings in Latin America, and higher pricing in Northern Europe. 

    Excluding the impact of Eurosport, SBS Radio and foreign currency exchange rates, Adjusted OIBDA was up reflecting the revenue growth partially offset by an 11 per cent increase in operating expenses. The higher operating expenses were primarily due to increased content expenses and personnel costs.

    Distribution revenues in Q4-2015 increased 1.8 per cent to $759 million from $745 million in Q4-2014. Advertising revenues in the current quarter declined 3.2 per cent to $804 million from $831 million in the corresponding quarter of 2014.

    Discovery says that Distribution revenues, excluding the impact of Eurosport and currency effects, grew mainly from increased rates and subscribers in Latin America. Advertising revenues, excluding the impact of Eurosport, SBS Radio and currency effects, were up, primarily due to higher pricing and ratings in Southern Europe, higher pricing and volume in Latin America, and higher pricing and volume in Asia.

    Excluding the impact of Eurosport, SBS Radio and currency, Adjusted OIBDA was up one per cent, reflecting the revenue growth partially offset by an 18 per cent increase in operating expenses. The higher operating expenses were primarily due to increased content expenses and personnel costs.