Discovery Eyes Bigger European Sports Slice

Discovery Communications could be eyeing the creation of European regional sports networks built on the Pan-European sports networks it already controls through its recently acquired Eurosport channels.

Silver Spring, Md.-based Discovery bought a controlling (51%) interest in Eurosport in May. The service has several pay TV brands — Eurosport, Eurosport HD, Eurosport 2, Eurosport 2 HD, Eurosport Asia-Pacific and Eurosportnews — that generally have focused on lower-cost rights like German Bundesliga soccer outside of Germany, skiing and cycling. The channels recently scored ratings gains with French Open tennis matches, averaging about 1.36 million viewers, and broke the 50-million viewer mark in France with cycling’s Tour de France.

“We think we can build Eurosport by being strategic and working with our partners,” Discovery CEO David Zaslav said at the Communacopia conference last week. Eurosport “has one feed that is sold on a Pan-European basis; we can put it into all 70 countries without adding one sales person. We also have a strong local presence. In some cases we think we can build a very strong local sports channel.”

Zaslav coyly replied “maybe” when asked whether those channels would be based on a U.S. regional sports network model.

The time might be ripe for European regional sports, Lee Berke, CEO of sports consultancy LHB Sports, Entertainment & Media, said.

While most prestige rights are locked into long-term contracts with big European distributors — such as BSkyB’s and BT’s $4.9-billion, three-year lock on England’s Barclays Premier League soccer — Berke sees room for channels built around a particular sport or team. “That’s where I think you can get some traction,” he said.

The biggest questions are which rights, which sports and how much money would Discovery be willing to spend. But the programmer has been willing to open its checkbook. This year, it teamed with Liberty Global to buy production company All3Media for about $1 billion and is expected to team up with Liberty Media to bid on a 49% stake in Formula One Racing, worth about $4 billion.

Berke also said Eurosport could build channels around supplemental and shoulder programming from teams, as well as regional skiing, Scandinavian hockey and European basketball.

Other U.S. networks’ efforts to secure major rights in Europe have not had much long-term success. ESPN, for example, had Barclays Premier League rights for a time, but then sold its U.K. and Ireland channels to BT last year. ESPN still has a strong digital European presence through its website and others, but has shifted international focus mainly towards Latin America.

That could mean the market has room for a well-run competitor, and Eurosport has the experience to possibly pull it off, Berke said. “They have navigated their way through distribution country by country,” he said. “ My guess is they’re saying some of the same things we’re saying here in the U.S. — more interest in developing a range of programming on a range of screens and a range of distribution outlets.”