Discovery takes control of Eurosport

January 21, 2014 17.25 Europe/London By Robert Briel

eurosport playerDiscovery Communications and TF1 Group have agreed on a deal to increase Discovery’s interest from 20 to 51%.

Discovery is taking a controlling interest in Eurosport International through an extension of their larger strategic partnership first announced in December 2012. The new deal accelerates the original agreement by nearly one year.

“Eurosport is one of the strongest, most dynamic sports platforms in the world. Over the past year, as we have been working directly with our partners from TF1, it became clear that combining the power of Eurosport’s brands and audience reach with Discovery’s network portfolio, boots on the ground, and country-specific expertise creates an unrivaled and powerful offering for viewers, advertisers and affiliates,” said David Zaslav, president and CEO of Discovery Communications.

“Today’s announcement underscores Discovery’s strategy to support already strong organic growth with targeted acquisitions and partnerships. This deal will enable our industry-leading International team and its new leader, JB Perrette, to create new value for our business partners by developing and sharing programming across channel brands, and building a stronger and more diversified network portfolio. We are privileged to continue our successful relationship with TF1 Group and look forward to growing Eurosport for many years to come.”

“With its successful track record of investing in quality content and building global brands, Discovery Communications is perfectly positioned to further expand and increase the value of Eurosport,” said Nonce Paolini, chairman and CEO of TF1.

“Eurosport’s vast sports platform coupled with Discovery’s extensive network portfolio will entertain and engage audiences and generate additional revenue streams for our business associates and distribution partners globally.”

Today’s agreement was based on an average enterprise valuation for the Eurosport Group of €902 million (approximately $1.2 billion), 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 (€85 million, approximately $115 million) has been deducted.

TF1 expects to retain its 80% interest in Eurosport France until at least January 1, 2015. Also, today’s announcement 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%, which would potentially increase Discovery’s ownership to 100%.

The flagship Eurosport network reaches 133 million homes across 54 countries in 20 languages. Eurosport’s brands and platforms also include: Eurosport 2 reaching 69 million households across 51 countries; Eurosport HD, the high definition simulcast of Eurosport, available in 32 million homes in 48 countries; Eurosport Asia-Pacific reaching 16 countries; and Eurosportnews, a 24-hour news channel and online hub, providing a sports news feed available in 48 countries.

The closing of the deal is subject to customary closing conditions, including regulatory approvals, and is expected to occur in the coming months.