Discovery, Inc. is withdrawing its fiscal 2020 outlook following the postponement of the Olympic Games to 2021 and the “economic uncertainty” caused by the ongoing COVID-19 pandemic.
In a report filed to the U.S. Securities and Exchange Commission Tuesday (March 24), the company said it expects to incur an “Olympics-driven” loss in the range of US$175 million to $200 million.
Discovery expects the postponement of the summer games in Tokyo to shift those revenues and expenses to its fiscal 2021 outlook.
“Discovery fully supports the IOC and the Tokyo 2020 Organizing Committee’s plan to stage the Olympic Games in 2021 and to make every effort to ensure the well-being of spectators, athletes, staff and the international community. Our essential planning and deliverables are complete and will now shift into next year. We will continue to develop our products and offerings to best serve our customers and marketing partners in 2021,” the company said in a press release March 24.
On March 12, Discovery said it also drew down $500 million from its $2.5 billion credit facility to “increase its cash position and maximize flexibility.”
Despite those losses, Discovery said in its filing that television viewing audiences have increased “dramatically” as a result of the pandemic, and reported an increase in ratings and delivery as many people self-isolate in their homes.
“The company also continues to pursue a number of cost-saving initiatives that it hopes will offset a portion of the revenue losses due to the impact of COVID-19, including those from production shutdowns and delays,” Discovery stated.