Discovery Execs Talk Upfronts, OWN, Ad Impact of Canceled Everest Jump

6:37 AM PST 05/06/2014 by Georg Szalai
Stephen Lovekin/Getty Images
Discovery Communications CEO David Zaslav

CEO David Zaslav also discusses the company's approach to acquisitions and how its flagship network was affected by the Winter Olympics.

Ratings at the Discovery Channel were hit quite hard by the Winter Olympics on NBCUniversal networks, Discovery Communications CEO David Zaslav said Tuesday.

During an earnings conference call, CFO Andy Warren said that this summer's soccer World Cup would only have "a small impact" overall on Discovery with some markets expected to feel it more than others.

The cable networks company's executive team on Tuesday also discussed the performance of Oprah Winfrey joint venture channel OWN, its approach to deals and the advertising impact of the canceled Mount Everest event entitled Everest Jump Live.

Warren predicted mid-single-digit percentage growth in ad revenue for the current quarter, adding that the Everest event, which Discovery was scheduled to air, would have accelerated that.

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Zaslav said his team is hoping for a "solid" upfront ad market, citing higher scatter ad market rates, "sustained" ratings momentum and what he said was the best ad sales team in the business. Overall, Zaslav expects to do "very well" in the upfront, he said.

Zaslav and Warren also touted the performance of OWN, citing a first-quarter ratings gain of 59 percent in its key female demo of women 25-54. Warren lauded a $30 million cash flow swing over the year-ago period, saying OWN's financials are "ahead of expectations." Zaslav also touted Discovery's successful deployment of the network's content to such foreign countries as Australia and South Africa.

Discussing Discovery's approach to acquisitions following the firm's recent decision to drop out of the auction for Britain's Channel 5 and its reported interest in U.K. production firm All3Media, Zaslav said he wouldn't talk about recent deals that have been covered in the media. But he said that Discovery's first priority in terms of investment is creating long-term value by producing content as the expansion of the global pay TV sector provides ample organic growth opportunities. "We can put money back on the screen" and create "valuable IP," he said.

But Zaslav added that the company would remain "opportunistic regarding acquisitions," especially internationally where deals would have to add must-have content or boost the firm's penetration in key growth markets. "We are very fiscally disciplined," Zaslav emphasized though, saying he doesn't feel the need to do any deal, but would remain opportunistic.

Email: Georg.Szalai@THR.com
Twitter: @georgszalai

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