Discovery Pays Off $34 Million in OWN Debt in 2013
Executives say its joint effort with Oprah Winfrey is growing ad revenue and that debt payments should escalate this year.
Discovery Communications paid down $34 million in debt related to Oprah Winfrey's OWN, including $23 million in the fourth quarter, and has just under $500 million more to pay, Discovery CFO Andrew Warren told Wall Street on Thursday.
Warren also said Discovery intends to increase "significantly" the amount of debt it pays off this year.
Discovery doesn't break out financials for OWN, but during a conference call with analysts to discuss overall earnings, executives were bullish about ad sales for OWN in the current quarter despite stiff competition from the Sochi Winter Olympics.
The company said that for all of 2013, income from "equity investees" totaled $18 million, and it is understood that money from that category comes primarily from OWN.
OWN debuted in January 2011 and had a rocky beginning that included multiple programming and management overhauls in its first year. In 2013, it was available in more than 83 million U.S. households.
On the whole, Discovery said Thursday that earnings in the fourth quarter were $289 million, up from $224 million a year earlier, on revenue that rose 28 percent to $1.54 billion.
Despite reporting earnings that beat the expectations of analysts, shares of Discovery were sinking more than 4 percent in midday trading on Thursday.
Besides OWN, which is jointly owned by Harpo Productions, Discovery's brands include Animal Planet, TLC, the Military Channel, its flagship Discovery Channel and The Hub, a joint venture with Hasbro.