Scripps, Discovery agree to join forces
$ 11.9B cable- TV deal could significantly boost channel access
Discovery Communications reached a deal to acquire Scripps Networks for about $ 11.9 billion in a major consolidation of cable TV networks amid a profound shift in how viewers consume entertainment.
The deal will give the combined company control of about one- fifth of all advertisingsupported paid TV in the U. S. And the merger also positions the combined company’s channels for improved inclusion on traditional pay- TV networks, as well as burgeoning online TV offerings such as DirecTV Now and Sling TV.
Discovery’s networks include the Discovery Channel, TLC, Animal Planet and the Oprah Winfrey Network. Scripps’ lineup includes HGTV, The Food Network and Travel Channel.
Cable magnate John Malone, a major Discovery shareholder, and Scripps family stockholders backed the deal.
The tie- up follows a bidding war between Discovery and Viacom, owner of BET, Comedy Central, Nickelodeon and Paramount Pictures.
Viacom reportedly dropped its bid for Scripps in early July after the price escalated.
Discovery and Scripps tout that, combined, they operate five of the top women’s networks in Discovery Channel, Investigation Discovery, TLC, Food Network and HGTV. Discovery “sees strong opportunities” to expand Food Network and HGTV viewership globally.
The company said it also hopes to bolster its short- form social media video offerings, as the cable- TV industry grapples with cord- cutting viewers who are gradually migrating to alternative sources, such as Netflix and online outlets.
This marriage should result in U. S. consumers getting more ways to see Discovery and Scripps programming, even though much of the deal is focused on international growth.
With its larger portfolio of channels, Discovery can better bargain for its position on cable TV networks and Net- delivered TV packages such as DirecTV Now, Hulu, Sling TV, PlayStation Vue and YouTube TV.
Currently, Discovery only has channels on Sony’s PlayStation Vue and DirecTV Now, while Scripps has a presence on those as well as Sling TV and Hulu. Their portfolio of channels could also be packaged as an entertainmentonly “skinny” bundle, sold directly to broadband homes and wireless customers.
“This transaction supports and accelerates Discovery’s pivot from a linear TV- only company to a leading content provider,” Discovery CEO David Zaslav said in a conference call discussing the deal.
Shares of Discovery fell 8% to close at $ 24.60 on Monday, while Scripps rose 0.6% to $ 87.41.