I just heard, about an hour ago, Discovery Communications announced that it would acquire a controlling stake in Eurosport International. They're increasing their stake from 20% to 51%.
Thought I'd share some of my preliminary views about this interesting development.
Competition, competition, competition.
We'll very likely be seeing more content on Discovery's network of channels aligned towards sports. Sure, this is obvious, but what's more interesting here is they're getting into a space ESPN has had a strong and comfortable presence for a while.
Discovery is said to already have a solid footing in Europe, and this deal bolsters them there further with the access to Eurosport's 133 million homes, across 54 countries in 20 languages.
Now, a little competition isn't going to hurt ESPN anytime soon, though this added competition is something I welcome.
Cross-channel content development
Those who know me well know I'm big on content and concept development. I like ESPN’s brand and their content very much. I believe they've been evolving their materials really well, especially in recent years, by developing more sports-themed entertainment for their programming lineup.
Nonetheless, I see this deal as Discovery's way to move into ESPN's sports-themed entertainment space with the least hiccups. The fact is, Eurosport has a wealth of resources, namely content relating to soccer, and two of my favorite sports, cycling and tennis. Access to this repository affords them the capability of trying out programming formats they've never explored before, with more ease.
Why the rush?
Expect Discovery to give the impression that they made this arrangement to also enable them to develop more localized programming, but according to news reports, they fast-tracked this deal. So I'm not inclined to think this is the real motivation.
What I see here, is actually a smart decision on their part to get into a new space and develop new profitable products quickly. While they’re busy with this, they are preparing themselves to get into the sports rights business, perhaps via new Discovery brands.
I dare say all this is part of Discovery’s grand plan to take a shot at eating into ESPN's highly lucrative turf of sporting events programming.
Anyone who says or thinks otherwise (or disagrees with me) probably works for Discovery.