- Staff Notice
Discovery Communications is acquiring Scripps Networks Interactive for $11.9 billion in a deal expected to boost the company's negotiating leverage as pay TV operators lose subscribers and it seeks new audiences.
US billionaire and arch rival to Rupert Murdoch, John Malone, has added another notch to his belt as he continues his drive to create a gigantic worldwide entertainment and communications company to take on Disney, Time Warner and Murdoch's 21st Century Fox in the face of the increasing threat posed by streamers such as Netflix and Amazon. Malone controls Discovery.
Both Discovery and Scripps make a huge sway of the satellite and cable tv channels we see on our screens and Scripps owns half of UKTV, the multi-channel joint venture with the BBC.
Discovery tried to buy a 50% stake in UKTV from Virgin Media in 2011 when VM put it up for sale, but VM sold the stake to Scripps instead. Virgin Media is owned by Liberty Global which is also controlled by John Malone. It's like knitting, this.
John Malone has been spending recent times merging three American cable companies together to create Charter, the second largest cable company in America after Comcast. Before that, his various companies bought a stake in Lionsgate, the American film company responsible for films such as the Hunger Games films and tv shows like Mad Men. Eurosport and QVC are ultimately controlled by Malone too, as was premium US cable channel Starz. Lionsgate bought Starz last year.
Rumours are still abound that Liberty Global will merge with Vodafone to create a communications giant. If that happens, I expect John Malone will then knit all his various interests together to create a global entertainment and communications behemoth which he could then sell onto someone like Apple, Amazon, Google or another like Disney, or keep for himself.
Malone is in his 80s and he has previously indicated that he would like to do one last round of consolidating, then sell. He's sticking to his word!
UKTV operates the following channels in Britain:
Watch
Dave
G.O.L.D
Drama
Alibi
Eden
Good Food
Really
Yesterday
and their time shift and HD variants.
These are the channels that Discovery run here:
Discovery Ch
Animal Planet
Quest
Quest Red
DMAX
Investigation Discovery
Discovery History
Discovery Science
Discovery Turbo
Discovery Shed
Home & Health
and their time shift and HD variants.
In Britain, Scripps operates these channels:
Food Network
Travel Channel
In America, Scripps also operates these channels:
HGTV - Home and Garden TV.
DIY channel
Cooking Channel
Great American Country
Fine Living
TVN
Asian Food Channel
As you can see there is a lot of cross over and with the ever increasing popularity of on on-demand services like Netflix and internet video services like Youtube, I would not expect all of these channels to survive post merger, which will be completed next year.
American cable companies are already starting to offer what they call "skinny" bundles of channels, that is smaller packages of channels, sometimes only containing 10-20 channels each. I would expect to see this here at some point and this merger may accelerate that process.
Media Trivia:
12 years ago Malone almost bought Murdoch's company right out from under him, but following tough negotiations, Murdoch sold his satellite tv business, DirecTV, to Malone in exchange for Murdoch retaining control of his main News Corp Company. This ended Murdoch's long held dream of creating a global satellite tv company. He already controlled Sky and Asia's Star TV.
Lesson to be learned: stay out of the way of these media mogul grandads or you'll get flattened.
In the early 90s in America, just before the creation of DirectTV, an attempt was made by Murdoch and others to create a digital tv company, it was called Sky Cable. Join the dots...
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This merger is happening because Malone wants to create a large enough company which can compete with the likes of Disney, Time Warner and especially streaming services like Netflix and Amazon. Will he succeed?