Discovery CFO Talks Cost-Cutting From $14.6 Billion Scripps Merger
"There's a lot of synergy potential on the cost side," Gunnar Wiedenfels told an investor conference.
Discovery Communications CFO Gunnar Weidenfels on Friday touted the company's $14.6 billion deal to acquire Scripps Networks Interactive, a deal that aims to bring together the two cable networks firms known for nonscripted and lifestyle content by early 2018.
"It's been an intense start, with the transaction coming up," Weidenfels said, having been in the CFO post for only a few months. He reiterated that the Scripps deal will allow for $350 million in cost savings as they combine popular brands, including several networks popular with women, and provide international opportunities for Scripps' businesses and more upside in the area of digital and direct-to-consumer services.
"Obviously, we want to guide conservatively," he added. Weidenfels said international consulting firms have come forward to pitch Discovery on how to combine the two companies for cost and revenue synergies.
Overseas, Scripps is big in Poland, but is only now "ramping up its international operation," Weidenfels observed. "There's a bit of a redundance in the cost structure, … so it's going to be a cost and topline synergy," he predicted.
"We'll pick and choose on what works best," he added, saying Discovery and Scripps would consider possible cost-cutting and assets sales down the road. Appearing at the 2017 Media, Communications & Entertainment Conference in Los Angeles, Weidenfels spoke during a period of continuing cord-cutting, carriage fee showdowns with pay TV companies, and ratings challenges that have hit cable networks groups overall.
"The industry is changing and we have a strong position in our TV business. We've made some good first steps, and we have to accelerate the pace at which we position ourselves as a content company on a global basis," he told investors.
Scripps operates HGTV, Travel Channel and Food Network, among others, while Discovery's networks include Discovery Channel, Animal Planet, TLC and OWN. The merger is expected to close by early 2018.