Discovery takes Eurosport control

Discovery Communications is to take a controlling interest in Eurosport International, increasing its stake from 20% to 51% through a deal with France’s TF1 Group.

The US-based factual giant paid €170m (US$222m) for a 20% stake in Eurosport and several other TF1 stations including TV Breizh, Histoire, Ushuaïa TV and Stylia in December 2012.

The deal included and option for Discovery to raise its stake in Eurosport to a controlling 51% at the end of 2014, at which point TF1 could choose to transfer its remaining 49% interest to the US firm.

But reports emerged in November that Discovery was looking to complete an early buy-out of the sportscaster and that has now been confirmed with an announcement this afternoon.

The pact sees Discovery taking its 51% stake a year early. It values the Eurosport group of €902m – combining the initial valuation with a higher figure based on control of the company – and means that Discovery will pay in the region of €253m for the extra 31% stake.

TF1 will retain its 80% interest in Eurosport France until at least January 2015 and the €85m valuation of that business has been deducted from the total.

The deal does not affect the the 20% interest Discovery acquired in TV Breizh, Histoire, Ushuaïa TV and Stylía channels, and a production alliance with TF1 Group.

TF1 retains its right to trigger a sale of the remaining 49% of Eurosport to Discovery.

David Zaslav, the latter’s president and CEO, said the buy-out would lead to more shared programming across the company’s international channel brands. Discovery launched Eurosport programming blocks on its male-skewing US cablenet Velocity back in September.

“Eurosport is one of the strongest, most dynamic sports platforms in the world,” he said. “Today’s announcement underscores Discovery’s strategy to support already strong organic growth with targeted acquisitions and partnerships.”

The deal comes after Discovery last week promoted digital exec JB Perrette to replace Mark Hollinger as the boss of its international business and after reported talks over a potential takeover of Scripps Networks Interactive were said to have broken down.