Discovery to acquire majority stake in Eurosport

Pascale Paoli-Lebailly | 22-01-2014

Discovery Communications is to acquire a controlling interest of 51% in TF1-controlled sports platform Eurosport International through an extension of the strategic partnership both groups first announced in December 2012.

Discovery thus increases its stake from 20% as the deal accelerates the original agreement by nearly a year.

This agreement was based on an average enterprise valuation for the Eurosport Group of 902 million (around $1.2 billion), partly corresponding to the initial valuation and partly to a higher valuation linked to the control of the company.

TF1 will retain the ability to exercise a put option over the remaining 49%, which would potentially increase Discovery's ownership to 100%.

The value of Eurosport France (85 million or $115 million) has been deducted from this valuation, as TF1 expects to retain its 80% interest in the company until at least 1 January 2015.

Today's announcement does not impact the other two elements of the original deal which are the 20% interest Discovery acquired in themed channels TV Breizh, Histoire, Ushuaia TV and Stylia, and the production alliance with TF1 Group.

According to Discovery, the deal, which is set to increase the value of Eurosport, will enable its international team and new boss, JB Perrette, to create new value for business partners by developing and sharing programming across channel brands.

The combined reach of Discovery Communications, Eurosport and the 2013 acquisition of SBS Nordics, will be 2.7 billion cumulative subscribers across nearly 200 networks spanning more than 220 countries and territories worldwide, Discovery has stated.

"Today's announcement underscores Discovery's strategy to support already strong organic growth with targeted acquisitions and partnerships," David Zaslav, president and CEO of Discovery Communications said. "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 unrivalled and powerful offering for viewers, advertisers and affiliates."

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 and Eurosport HD, which is available in 32 million homes in 48 countries.

In addition, the portfolio comprises Eurosport Asia-Pacific and Eurosportnews, a 24-hour news channel and online hub available in 48 countries.