Discovery Threatens to Pull Channels From Sky in Carriage Dispute

Courtesy of Sky

Discovery says the pay TV giant is using its "dominant market position" and paying it less than 10 years ago, while Sky says the networks company's price expectations are "completely unrealistic."

Discovery Communications has threatened to pull its networks from pay TV giant Sky in the U.K. and Germany amid a U.S.-style carriage dispute rarely seen in Europe.  

"If an agreement is not reached, Discovery's much-loved channels and programs, which make up 50 percent of all viewing to the factual category on Sky, could disappear from Sky and [its streaming video service] Now TV households after January 31," Discovery said late Wednesday in a statement.

Sky, in which 21st Century Fox owns a 39 percent stake that the entertainment company is looking to take to full control in a recently agreed deal, said: "Despite our best efforts to reach a sensible agreement, we, like many other platforms and broadcasters across Europe, have found the price expectations for the Discovery portfolio to be completely unrealistic. Discovery’s portfolio of channels includes many which are linear-only where viewing is falling."

Discovery, led by CEO David Zaslav, has 12 channels carried by Sky, including Discovery Channel, TLC, Eurosport, ID and Animal Planet, among others. Since acquiring European sports channel Eurosport, the firm has stepped up its efforts to get paid the types of carriage fees in Europe that it feels it deserves.

"We believe Sky is using what we consider to be its dominant market position to further its own commercial interest over those of viewers and independent broadcasters," Discovery said. "Discovery is now paid less by Sky than it was 10 years ago, while Sky households are paying so much more than they did in 2007. This is despite Discovery having increased its share of viewing on the Sky platform by more than 20 percent. Discovery has also increased investment in original content by more than 30 percent since 2010, adding new channels to its portfolio, including Eurosport, TLC and [ID]." 

Susanna Dinnage, managing director, Discovery Networks U.K. and Ireland, said: "We are proud to be an independent network of channels that works hard to bring real-world first class channels and programs to viewers in the U.K. for nearly 30 years, offering quality and variety to pay television. Our portfolio of channels caters to a wide range of personal tastes and interests from adventure, natural history, science and sports to extraordinary people, families, weddings, and true crime. From Racing Extinction, Gold Rush, Say Yes to the Dress UK to Cake Boss and Warrior Apes, which is launching later this year, we create shows that make people's worlds bigger."

A Sky representative added: "Sky has a strong track record of understanding the value of the content we acquire on behalf of our customers, and as a result we’ve taken the decision not to renew this contract on the terms offered. We have been overpaying Discovery for years and are not going to anymore. We will now move to redeploy the same amount of money into content we know our customers value. Sky will continue to offer a huge range of content, from award winning documentaries to thrilling entertainment, with thousands of hours available to watch whenever and wherever our customers choose."

Discovery first launched in the U.K. in 1989. The company on Wednesday evening launched on-air information messages on its channels to alert and mobilize viewers.

It said about other U.K. pay TV companies: "There are no changes to BT and Virgin Media customers with whom Discovery has separate long-term agreements in place."