Discovery execs must have paid close attention the day Darwin’s theory about the survival of the fittest was taught in class. In autumn 2002, around the same time kids went back to school, Discovery Communications introduced a clause to its contracts that significantly altered the environment for any producer or distributor doing business with the Bethesda, U.S.-based cable network. The provision prohibits programs that receive coproduction funds of 15% or more from Discovery from being sold to National Geographic channels. This applies to any region for five years from the start of the Discovery license period, regardless of the territories covered by that license.
A Discovery spokesperson says the new contract is meant to fortify the company in a fragmented and competitive media landscape. ‘It does not make wise business sense to subsidize the program development of our competitors,’ he says. As to why the clause singles out Nat Geo: ‘We tried to narrowly focus this in scope, reach and duration, to make it the least onerous as possible on our production partners.’
Jean Horton Garner, senior VP of producer/distributor Thomas Horton Associates in Ojai, U.S., is involved with several projects bound by the new contract. She says the focus on National Geographic doesn’t lessen the blow delivered by the clause. ‘By eliminating the major cable and satellite buyer of docs outside the U.S., our chances are restricted more than 50% in recouping our money. Also, they’re crazy if they think a documentary has a shelf life of longer than five to seven years.’ She adds, ‘You’re talking about a minority equity holder determining where the majority equity holder can sell a program.’
Ian Jones, chairman of the British Television Distributors’ Association and general manager of Granada International, learned of Discovery’s new contract through the press and agrees that the potential impact on both producers and distributors is significant. ‘It will threaten distributors’ ability to provide an advance, which will increase a producer’s risk and ability to cover production costs,’ he contends. The result, says Jones, is less programming or programming of lower quality, as resources are cut to meet budgets. ‘The U.K. industry understands the competitive issues involved,’ he continues. ‘But to unilaterally impose a restrictive clause is not exactly the most constructive way of addressing them.’ Jones also questions the legality of the restrictions under European law.