Discovery Completes Eurosport Acquisition

Deal Was Announced in January
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Discovery Communicatons said Friday that it has completed its acquisition of a controlling interest in international sports programmer EuroSport.

The deal, which was announced in January, increases Discovery’s stake in the programmer from 20% to 51%. Discovery had originally purchased the 20% interest in 2012 from parent TF1and had planned to increase that stake to a controlling interest by 2015. This deal accelerated that timeline by one year.

With the addition of Eurosport’s six pay-TV brands, Eurosport, Eurosport HD, Eurosport 2, Eurosport 2 HD, Eurosport Asia-Pacific and Eurosportnews, Discovery Communications now operates more than 210 worldwide TV networks reaching 2.7 billion cumulative subscribers.

“Today is an exciting day for Discovery Communications and our leadership as the number one pay-TV programmer in the world. Eurosport is a perfect strategic fit for growing market share, strengthening relationships with advertisers and affiliates, and bringing ‘must have’ content to passionate viewers across the globe,” said Discovery Communications CEO David Zaslav in a statement. “By combining Eurosport’s popular sports programming with Discovery’s global brands and local expertise, we will continue to capitalize on the international growth of pay-TV and create long-term value for our shareholders.”

Discovery said it intends to make long-term strategic decisions and targeted investments to strengthen and expand Eurosport’s sports programming and services to help boost its audience and reach. As part of that effort, Discovery will be working with Eurosport management and employees on a long-term business plan that fully optimizes Eurosport’s channels as part of Discovery’s suite of global networks.

“Together, Discovery and Eurosport are undoubtedly stronger. Discovery has built the most successful international pay-TV business in all of media and we are excited to utilize that expertise to further strengthen Eurosport’s programming and platforms,” said Discovery Networks International president Jean-Briac Perrette in a statement . “We would like to thank TF1 for its leadership of Eurosport International and for giving us such a wonderful opportunity to expand our partnership.”

The closing price of the deal was based on an average enterprise value of $1.2 billion for the Eurosport Group, partly corresponding to the initial valuation and partly to a higher valuation linked to the control of the company. From this group valuation, the value of Eurosport France (about $115 million) has been deducted. TF1 expects to retain its 80% interest in Eurosport France until at least January 1, 2015. Also, today’s closing does not impact the other two elements of the original deal – the 20% interest Discovery acquired in TV Breizh, Histoire, Ushuaïa TV and Stylía channels, and a production alliance with TF1 Group. TF1 will retain the ability to exercise a put option over the remaining 49% in Eurosport International, which would potentially increase Discovery’s ownership to 100%.

“Eurosport is perfectly poised for its next phase of growth and I can think of no better partner than Discovery to make this vision a reality,” TF1 chairman and CEO Nonce Paolini said in a statement. “Discovery has a proven track record of a long-term investment strategy that creates value for advertisers, affiliates and audiences around the world.”

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