In a stunning development, Discovery Communications has landed Europe’s Olympic media rights through ‘24 for $1.48B. U.S.-based Discovery now controls all European media rights -- broadcast, pay-TV, digital and mobile -- to four Olympic Games in 50 European countries and territories, excluding the Russian Federation. The deal takes effect with the 2018 PyeongChang Games. Discovery and the IOC agreed on the deal about a week ago. It was announced formally on Monday and covers '18 in South Korea and the 2020 Games in Tokyo. Sites for the 2022 and 2024 Games have not been announced. The deal means that European broadcasters -- ARD and ZDF in Germany, for example -- will have to sublicense Olympic packages from Discovery if they want over-the-air access to the Games. Plus, it marks a major step forward for Discovery’s Eurosport channel and online presences, which will be main outlets for Olympic programming. The IOC previously has sold rights to local European broadcasters or it has sold rights to other pan-European companies such as SportFive or the European Broadcasting Union, which turned around and sold them to local broadcasters. This deal is different in that Discovery expects to keep most of the rights, though it does plan to sublicense them in some markets.
FEELS LIKE THE PERFECT FIT: Discovery President & CEO David Zaslav said, “We have 26 years of doing business here in Europe. We were investing all across Europe when most media companies were retreating. We feel like it is a perfect fit. If you put the Olympics together with Eurosport and our 10 channels in every country and our broadcast networks, we could bring meaningful value to the events, and we could promote them across all of our platforms.” The deal does not cover France and Britain in ‘18 and ‘20; previously, France Télévisions and the BBC picked up those rights. But Discovery will hold all rights in those markets in ‘22 and ‘24.
PARTNER IN OLYMPIC CHANNEL: Another significant part of the deal will see the IOC partner on an Olympic TV channel with Discovery and Eurosport that will be distributed across Europe. “Above all, this agreement ensures that sports fans in Europe will be able to enjoy excellent coverage of the Olympic Games and Olympic sports, both during and outside Games time, on their platform of choice,” said IOC President Thomas Bach in a prepared statement. It was when Bach publicized his desire to launch an Olympic channel last summer that Zaslav looked into acquiring the rights and kicked off an eight-month negotiating process. “When I read his comments (about an Olympic channel), I just thought, ‘This should be us,’” Zaslav said, pointing to Eurosport, which reaches 130 million homes with a heavy mix of Olympic sports content -- more than 40%.
FRIENDS IN HIGH PLACES: Upon reading Bach’s comments, Zaslav called his friend Dick Ebersol, the former NBC Sports head who is closely associated with producing the Olympics in the U.S. Ebersol agreed to be an unpaid adviser to help Zaslav get to know the execs who run the IOC. In late summer, the two met in Zaslav’s N.Y. office, along with Discovery Networks Int’l President JB Perrette, to develop a plan. “They asked me to introduce them into the IOC world,” Ebersol said. “We came to Switzerland in October of last year, and I introduced them to Christophe De Kepper, who is the director general of the IOC. We sat down for about two-and-a-half hours, which gave David and JB the great opportunity -- which they took more than full advantage of -- of really showing De Kepper what they were all about.” The IOC eventually hired IMG as a consultant and accepted bids for the European media rights on June 15. It is not known which other media companies participated. For Zaslav, the long-term Olympic deal ensures that his European networks will have programming that generates huge ratings at least every other year (John Ourand, SportsBusiness Journal). In London, Josh Burrows wrote in a complexity of the deal, however, the BBC will also broadcast the 2018 and 2020 Games in the U.K. -- "even though the European rights are now held by Discovery -- because those contracts had already been signed." That means that U.K. TV viewers "will notice a change in broadcaster only from the 2022 Winter Olympics onwards, with Discovery contracted to provide 200 hours of free-to-air Olympics coverage and 100 hours of free-to-air Winter Olympics coverage from each Games." For the BBC, the loss of the Olympics "comes only months after it was announced that Sky Sports had outbid the corporation for The Open Championship, ending a 60-year association with the golf tournament." The only marquee events for which the BBC retains sole or shared rights "are the World Cup and European Championship finals, the FA Cup final, Wimbledon, the Rugby World Cup final (but no other matches), the Six Nations, the Commonwealth Games and the World Athletics Championships" (LONDON TIMES, 6/29).
EYES ON EUROPE: Also in London, Henry Mance wrote Discovery "has been looking to Europe for growth" as advertising revenues in the U.S. decline. It paid $1.7B for broadcaster SBS Nordic in '12, and increased its stake in Eurosport to 51% last year, at an enterprise value of €902M. The company "also unsuccessfully sought to buy" the U.K.’s Channel 5 and for a stake in F1 (FINANCIAL TIMES, 6/29). In London, Owen Gibson wrote Discovery "seriously considered bidding" for the live Premier League rights that ended up costing Sky and BT Sport £5.1B ($8B) between them and has been linked with several other major sports rights. IOC TV & Marketing Services Managing Dir Timo Lumme said that the deal with Discovery gave it a "partnership made in heaven" as it developed plans for a new channel that would promote Olympic sport between Games (GUARDIAN, 6/29).
