Sports Coverage in Europe vs the US
I listened to the 2015 Q2 Earnings call for Discovery Communications and it was really interesting.
ESPN (DIS) is the king of sports in the US. It sounds like things are completely different outside the US.
Seeking Alpha transcribed the call here: http://seekingalpha.com/article/3402...pt?part=single
Cliffs:
Discovery says they don't need to be the leader in soccer.
In July the company announced multiplatform rights to the Olympic Games in Europe for the next decade.
In July the company announced the deal to acquire 100% control of Eurosport.
They recently announced an exclusive deal in Europe, with the IOC all of the TV and multiplatform media rights to the four Olympic Games from 2018 to 2024.
Eurosport already dedicates over 40% of its programming schedule to Olympic Sports.
Eurosport player and Dplay over-the-top video (OTT) streaming service have over 300k subscribers.
Cycles for affiliate deals outside the US are shorter (about 3 years vs 5 to 7 in the US).
There were some great quotes from David Zaslav - President and CEO.
David Zaslav:
And as we mentioned earlier, we are pushing hard in over the top. I think we're the only company in Europe that's going directly to consumer with sports and we have over 300,000 subscribers now that are paying us between $6 and $8 a subscriber in order to get the Eurosport programming.
On the Europe side, we've actually done the opposite of what you’ve said. The only big ticket item that we've gotten is the Olympics. We paid a little less than $1.5 billion for four Olympic Games where we have very little cost until 2018. And we begin to get the Olympic library and the rings to use on Eurosport and use on Eurosport.com, which is the leader online beginning right after Rio.
The rest of the sports rights that we've gotten and we've done over 50 deals, most of the money goes to soccer. Soccer is like the NFL, times two in Europe. And distributors are fighting over who gets to get the soccer. We've opted out of that game. And we think we can get everything else and we can do it on a very reasonable basis and we can monetize it on our European platform and we can monetize it direct to consumer and online.
We carry the clips of soccer on Eurosport.com, which is the equivalent of ESPN.com here in the U.S. it’s the leading online site but we don't need to own soccer.
And when you think of Eurosport as being in a 130 million homes and then another two or three sports channels and you think of where ESPN was years ago, we haven't begun to monetize the subscriber economics. We haven’t begun to aggressively -- we only started selling locally four months ago.
We haven’t begun to monetize the advertising piece. And we have the IP and the Olympics, if we could do a little of what Iger has been able to do over the last 15 years, in gaining significant subscribers, building on the dominant platform that he has, and using it to build the rest of his company, we could have a hell of a business. And he did it with, in a marketplace that has 330 million homes with the leader in sports and have the Olympics in a next decade in a market that has 700 million homes but we’re not going to do the NFL, we’re not going to do soccer.
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