Discovery Communications’ $14.6 billion deal to acquire Scripps Networks Interactive might not be its last, David Zaslav, president and CEO, Discovery Comm., said in a call after the agreement was announced yesterday. “We’re not out of bullets,” noted Zaslav. “Over the next two years we still have enough room to do some selective purchases that are smaller.”
Meanwhile, with the Scripps suite of lifestyle nets, Discovery has “quite a compelling offering that we can take to any distributor,” pointed out Zaslav. “Or we can come together with a few others and do it ourselves.” Any way you slice it, it’s a recipe for success, said Zaslav in making the initial announcement: “Scripps is one of the best run media companies in the world with terrific assets. 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.”
Kenneth Lowe, chairman, president & CEO of Scripps, who is expected to join Discovery’s board of directors at the close of the transaction, noted the benefits of Discovery’s global distribution infrastructure: “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.” Combined, the company will have nearly 20% share of ad-supported pay-TV audiences in the U.S., and account for over 20% of women watching primetime pay-TV. Cost synergies of the acquisition, expected to close by early 2018, are estimated to hit $350 million.
Addressing the expected employee jitters, Lowe sent an email to all employees yesterday, assuring, “The management team of Discovery Communications has a commitment to preserving the traditions and values that make Scripps Networks Interactive the company that it is today. They recognize that Scripps Networks’ management and employees represent a vital asset to the company, and they see these people as being a key element in maximizing the long-term prospects of the combined company.” That said, change “can be unsettling to many people,” acknowledged Lowe, so starting yesterday in Knoxville and today in New York, he and members of Scripps’ senior management team are making the rounds of employees to respond to questions and concerns.
