Discovery sets “strong financial outlook” at Investor Day

Discovery Communications' first Investor Day in New York saw the company discussing plans for its Olympics coverage, the growth of Eurosport and the Eurosport Player, and a subscriber base nearing three billion worldwide.
September 30, 2015

Discovery Communications is expected to reach three billion worldwide subscribers by year’s end and has set a “strong financial outlook” for the next three years, the company revealed at its first Investor Day event in New York City on Tuesday (September 29).

Discussing Discovery’s growth potential, CEO David Zaslav (pictured) outlined five “key differentiators,” including the company’s portfolio of assets; ownership and control of a “growing and diverse” portfolio of content and IP; a leading international distribution platform; a cost-flexible, stable U.S. business with continued “free cash flow growth”; and a strong financial outlook for the next three years, including a projected increase of nine to 10% in constant currency revenues in 2015.

“Third quarter results are on track, highlighted by strong U.S. advertising growth,” said Andrew Warren, Discovery’s chief financial officer, in a statement. “We are pleased that we are delivering on our 2015 commitments and are confident that we are well positioned to continue to grow adjusted EPS in the long-term. In addition, our model generates significant free cash flow, and we expect to have approximately US$10 billion in available capital over the next five years.”

The company’s global digital portfolio, meanwhile, has been highlighted by direct-to-consumer products in Europe such as the OTT service, Eurosport Player, as well as DPlay, featuring entertainment content and live events. Bruce Campbell, chief development, distribution and legal officer, also announced the upcoming launch of an authenticated TV Everywhere offering titled ‘Discovery Kids Play’ for Discovery Kids in Latin America.

Meanwhile, Eurosport CEO Peter Hutton described the company’s strategy to grow the Eurosport brand; expand its audience and reach; and leverage sports to drive revenue across the portfolio.

Commenting on Discovery and Eurosport’s European multi-platform broadcast and distribution deal for the Olympic Games between 2018 and 2024, Hutton explained that Eurosport’s programming schedule is nearly 50% Olympic sports, “creating the opportunity to tell stories about the characters and events all year long.” In addition, sublicensing fees for the Olympic Games are to cover 70% of the economics. Hutton also noted talks have already begun with traditional and new distribution partners, such as mobile and digital.

Elsewhere, JB Perrette - president of Discovery Networks International (DNI) – described how DNI’s “unique global and local infrastructure with a low-cost model” leverages global content to support the division’s growth, including continued increases in pay-TV global subscribers and ramped up earnings for multichannel advertising.

Discovery Channel president Rich Ross discussed Discovery Channel’s growing audience and “creative momentum,” including the forthcoming global premiere of the documentary Racing Extinction as well as tent-pole events, scripted series and blue-chip documentaries. Meanwhile, Henry Schleiff - group president for Investigation Discovery, American Heroes Channel and Destination America - noted the international appeal of the crime and mystery genre has helped ID, which was available in just 44 markets at launch, but is expected to reach 220 markets in the next five years.

Finally, over at Velocity, Bob Scanlon - GM of Velocity and Automotive Content – shared the net’s dominance in the car genre. Called Turbo internationally, Velocity has grown to become Discovery’s next global flagship brand and is projected to grow to 220 million subscribers in 163 countries by the end of the decade.

About The Author