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European Commission clears Discovery-Eurosport deal

discoverycommunications1The European Commission has cleared Discovery Communications’ acquisition of sports broadcaster Eurosport in a deal that, Discovery management tells DTVE’s sister title TBI, means revenues from the US-listed company’s international division will now eclipse those from its domestic market.

Clearing the deal for Discovery to take control of Eurosport, the Commission said there were no competition concerns. “The parties only have moderate market shares on the markets for the acquisition of TV rights, wholesale TV channels and TV advertising, where their activities overlap,” the European body noted.

For Discovery the deal is of particular significance as it positions it into a new category of programming. Once consolidated, the financial contribution from Eurosport will also tip the balance of revenues in favour of international for the first time in the 25-year history of the global part of the business.

Discovery is also looking at possible ways of securing premium sports rights, as first reported by TBI last week.

The channel operator initially acquired a 20% stake in Eurosport from France’s TF1 in a deal announced in December 2012. In January it announced it would bring forward a plan to take majority control of the sports business and it now owns 51%.

The deal values Eurosport at about US$1.2 billion (€863 million). TF1 has a put option that would lead to Discovery acquiring the remainder of its stake in the business.

The Discovery Networks International business has been growing faster than that of the US, buoyed by the acquisition of the SBS channels and now Eurosport.

Discovery Communications last results, for the nine months to end-September 2013, showed the US networks had generated revenues of US$2.2 billion, an 8% year-on-year increase. The international networks generated revenues of US$1.7 billion, a 46% year-on-year increase.

Profit was US$1.3 billion at the US channels, a 6% increase, and US$681 million at the international nets, a 31% uptick.