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January 23, 2014

Discovery's Eurosport Plans - Localized Advertising and Acquiring Sports Rights

In a move that further strengthens Discovery Communications’ international presence, the company announced this week it has acquired a 51% controlling interest of Eurosport International. The deal increases the company’s ownership of the European sports network from 20%, which Discovery agreed to in a December 2012 deal with France-based TF1 Group.

Taking a controlling share of Eurosport has occurred a year ahead of schedule, for several reasons. According to Head of Business Development and General Counsel, Bruce Campbell, the programmer has been eyeing international acquisitions for the past three or four years, particularly those that have a dual revenue stream in multiple markets. In this sense, Eurosport fit the bill. Distribution also played a factor. “In Europe alone they’re in 54 countries and they have distribution throughout Asia as well,” he said.
 
Accelerating the agreement made sense once Discovery realized that its own localized approach to advertising in Europe—a chief motivator for investing in Eurosport to begin with—could in fact benefit the sports platform to a greater degree. “Historically, Eurosport’s advertising business has been more pan-regional,” Campbell said. “We have the ability to bring localized advertising to Eurosport in a way that [TF1 has] never been able to do before.”
 
Additionally, Campbell thinks Discovery can supplement TF1’s sports rights acquisition strategy—which tends to lock in core rights, such as the French Open and the Tour de France, for a long period of time—by leveraging relationships with its European distributors. “In some cases that may be us with Eurosport going out and acquiring more rights on our own, or alternatively… there will be opportunities for us to work with distributors to acquire rights together,” Campbell said. As far as the nature of those particular sports rights, Campbell believes Eurosport occupies a niche in Europe with its pan-regional, “middle tier” sporting events. It doesn’t plan to enter into bidding wars such as those between Sky Sports and BT Sport for the Champions League soccer tournament, which bore in a 900-million-pound price tag.
 
On the programming front, Discovery doesn’t have intentions to alter Eurosport’s current direction. That aspect of the business will continue to be managed independently. “We’re very aware of the fact that we don’t bring years of sports expertise to the business, so having a good core team there that understands European sports rights will continue to be important,” Campbell said. Meanwhile, the affiliate sales side of things will be done “on a combined basis with Discovery channels in the market.”







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