September 2017


Discovery, one of billionaire John Malone's key holdings, will acquire Scripps Networks Interactive for about $90 a share (a 34% premium) & assume longterm debt of $2.7 billion, bringing the total price of the equity value plus liabilities to $14.6 billion. The deal combines 2 companies that specialise in 'infotainment' programming, focused on real-life adventures, travel, wildlife and home.

The combined company will have almost 20% of the ad-supported Pay-TV viewership in the US. Scripps could also help Discovery boost its international sales, which accounts for 50% of its annual revenue.

Discovery's offer had forced Viacom to abandon its own efforts to acquire Scripps.

Though smaller, Scripps has an especially valuable asset in HGTV (Home & Garden TV), which was the fourth-most watched US network in prime time this year. Parties to the Scripps Family Agreement control 92 per cent of the voting stock.

Since launching HGTV (Home & Garden TV) in 1994, Scripps Networks Interactive diversified into lifestyle media, developing relevant content for television, Internet, satellite radio, books, magazines, and on emerging media platforms. In addition to HGTV, its lifestyle media brands include Food Network, DIY Network, Cooking Channel, Travel Channel, Great American Country and ulive.


After being left out of some new online TV packages in the US, Discovery has been looking to create a low-cost web-only TV service with its cable channels and those of others for consumers who don't want to pay for sports. Neither Discovery nor Scripps broadcasts live sports in the US.

"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 including short-form, direct-to-consumer and streaming platforms," Scripps Chief Executive Officer Kenneth W. Lowe said in the statement.


Pay-TV distributors like Charter Communications Inc. and AT&T Inc. have grown through acquisitions in recent years, giving them added leverage in fee negotiations with channel owners like Viacom, Discovery and Scripps.

That's led broadcasters to also consolidate. Time Warner Inc., owner of TNT and HBO, agreed last year to be bought by AT&T for $85.4 billion.

To widen their viewer base and business, broadcasters are also beginning to offer their own online services to compete with YouTube and Netflix.

CBS Corp. offers its flagship network and Showtime as standalone services online. Walt Disney Co., which owns ESPN, is developing an online service to reach sports fans who aren't using traditional cable. n