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Capital Business
Posted at 11:29 AM ET, 12/14/2012

Discovery continues international expansion with pair of agreements

Discovery Communications has inked a pair of agreements that will strengthen the cable television company’s foothold in Europe as it forges ahead with plans to bolster its international business.

The company agreed to pay $1.7 billion to purchase the SBS Nordic operations of ProSiebenSat.1 Group in a deal that gives Discovery control of a dozen television networks across Norway, Sweden, Denmark and Finland.

The transaction is subject to regulatory review and executives expect it will close early next year.

The company also signed an agreement with television operator TF1 that will give the Discovery a 20 percent stake in Eurosport, a channel that broadcasts less-popular sports, such as skating and tennis, for $221.6 million. The company can opt to increase its ownership to 51 percent in two years.

The Silver Spring-based company’s portfolio of television channels already includes Discovery, TLC, Animal Planet and the Oprah Winfrey Network, which broadcast such popular programs as Shark Week, Say Yes to the Dress and Here Comes Honey Boo Boo.

Discovery has sought to expand internationally as its saturation of the United States market has caused growth to slow here. The company’s strategy includes exporting its U.S. programs overseas and purchasing broadcasters in emerging markets.

“We’re the largest cable TV player outside the U.S. and our content works very well [overseas],” said David Zaslav, Discovery’s chief executive.

“If you wake up in Russia and you’re looking at the Science Channel, it doesn’t look like an American channel. It’s their channel,” he added.

Zaslav said that there are still subscribers to be won in many international markets, unlike the United States where many households already have their cable providers.

There’s also less competition for viewers and advertising dollars abroad, he said, because many countries count only a few dozen channels compared to several hundred in the United States.

Discovery, the company’s flagship channel, is broadcast in 210 countries around the globe.

Follow Steven Overly on Twitter: @StevenOverly

By  |  11:29 AM ET, 12/14/2012

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