sign in sign up
<<
Home , Danish Superliga, Eurosport

28 Media

EUROSPORT DISCOVERED

Four years on from the first whispers of Discovery’s NETHERLANDS MotoGP (2018) interest, Martin Ross analyses the overhaul at and (2018) French league cup (2018) Eurosport and speaks to chief executive Peter Tour of Switzerland (2018) Hutton about the future strategy

LOCAL RIGHTS PUSH

Discovery/Eurosport’s major rights acquisitions since deal for 51% Eurosport stake

UK Wimbledon (2020 – finals and highlights) LTA grass-court tournaments (2017) IAAF Diamond League (2019) Tour of Switzerland (2018) Roland Garros (2020) (2020) PORTUGAL Formula 1 (2018) French Cycling Championships (2020) Coupe de France (2018) Coppa Italia (2018) MotoGP (2017) Pro D2 rugby (2020)

(expiry date in brackets) * = digital only rights www.sportcal.com Q3 2016 Sportcal Insight 29

NORDICS Uefa Europa League (2018 – excluding Finland) (2021 – Denmark only) (2019 – Denmark only) Tippeligaen (2017 to 2021 – Serie A and LaLiga PAN-EUROPEAN RUSSIA only) (2018 – Denmark only) Olympics NHL (2019) Norway friendly games (2017) (2024 – excluding Coppa Italia (2018) (2017 – Norway only) Russia) English Football Norwegian handball League (2018) Uefa national team (Norway only) plus US Masters (2018) qualifiers (2017 – support events (2021) PGA Tour excluding Finland) (2021 – Norway only) ASIA-PACIFIC Wimbledon Uefa Champions US Masters (25 countries League and Europa (2018 – Norway only) plus deal for Turkey, League (2018 – Eurasia) Singapore only) Handball Men’s and Women’s World World events ASO races, including Championships (2026) Tour de France, Vuelta (2017 – only) (2021) FIS World Cups and World Championships FIS World Cups and (2021) World Championships (2021) MLS (2018 – excluding UK) Rugby league, including Super League, Challenge (22 countries) Cup and World Club Challenge (2019) Superbike World Championships (2019) Pro D2 rugby (2020) Ekstraklasa (2019) Uefa Europa League European Athletics IAAF World (2018) events (2019) Championships Formula E (2017) (2017 - Australia only) US Masters (2018) Pro D2 rugby (2020) Six Nations (2017) (2017-18 to Professional Squash 2020-21 – live rights package) Association events BELGIUM (2020)* MotoGP (2018) FA Cup (2018) MotoGP (2018) Formula E (2017) Badminton World IAAF Diamond League (2019) Federation events (2017)*

BALTICS Bundesliga (2021)

TURKEY Bundesliga (2017)

ROMANIA Premier League (2019) 30 Media Eurosport

he investment in Eurosport adapting to the ‘Discovery culture,’ Two rights deals in particular grabbed in 2012 by Discovery the stateside involvement has been a the attention of the industry: the T Communications, the US mass happier and more productive one than €1.3-billion agreement for the Olympics media giant known best for its flagship that of (previous shareholder) ESPN rights in Europe (excluding Russia) from and documentary during the 1990s. Instead of sporadically 2018 to 2024; and a deal in June for programming, posed plenty of appearing on the radar of armchair a package of live Bundesliga rights in questions about the direction the sports sports fans during coverage of the likes Germany from 2017-18 onwards (worth broadcaster would take after over a of Roland Garros or the Tour de France, €85 million per season). However, it decade of full ownership by French Eurosport has been buoyed by the is another deal that Hutton highlights commercial broadcaster TF1. Would Discovery-backed rush of rights deals when asked about the landmark rights Discovery embark on a lavish spending both locally and across the continent. additions, namely an agreement to show spree as it launched into the world of Having dealt with Eurosport for years Wimbledon across large parts of Europe, live sports programming? And which from the other side of the negotiating having never shown the UK’s grand countries would Eurosport prioritise in table, Peter Hutton, the experienced slam event anywhere until 2015 (when the new era of pursuing prized properties media rights executive, joined as chief coverage was offered in Belgium). in local markets? executive in March 2015 to spearhead Wimbledon was duly added by Eurosport is a complex animal. the rights investment. The Englishman Eurosport in Russia and the Ukraine, Perceived differently by the public in tells Sportcal Insight: “When you step while exclusive rights have been poached different markets, depending on the back and see what has happened in in Albania, Bulgaria, Finland, Hungary, level of rights acquired, it was in need the last year and a half, it’s an amazing , Norway, Romania and Sweden of new investment and impetus to shed change. The old timers who’ve been until 2019, plus non-exclusive rights in an image associated with second-tier at Eurosport for 20-odd years see that the Netherlands and the former Yugoslav sports rights, low-scale production or change and feel that more than the ones territories. Rights in Turkey and the being the ‘other’ place to watch major that have arrived more recently. Eurasia region are expected to be added events. Having relied heavily for years “You look at where the brand was from 2017 to 2019 in a deal with the on its rights-buying privileges within the going and the history of Eurosport. It Saran Media agency. European Broadcasting Union (which was something that we all grew up with Hutton reveals: “The Wimbledon deal turned to Sky Television plc to launch and part of the sports landscape, but is a big one for us. Partly because of the Eurosport in 1989 to showcase rights it didn’t fit with the modern age. You way it’s been structured. It was almost that EBU members could not), Eurosport have more and more channels in more designed that you couldn’t buy those has independently landed a string of and more markets, meaning that you rights because it was sold market by premium and exclusive rights deals since become more and more irrelevant with market with different expiry dates and the Discovery came on board. non-exclusive content, reliant on EBU [All England] Club is quite conservative After Discovery’s period of deals and a lack of [on-air] personalities. and doesn’t make change often. It shows acclimatisation getting to grips with Even though it has a great history and that we have the humility to prove to a Eurosport’s vast live programming tradition, it was one that was clearly rights-holder that we can do a good job operation and Eurosport’s old heads in taking the brand downhill.” and then build on it bit by bit, creating

Discovery and Eurosport – the corporate timeline

November 2012 December 2012 TF1 and Discovery announce start TF1 approves conclusion of talks over sale of 20-per-cent stake to Discovery of talks over ‘alliance’ to: drive for €170m, terms that value Eurosport at €850m. Discovery has option to Eurosport’s growth; enhance both raise shareholding to 51% in two years’ time, giving TF1 put option over companies’ pay-TV offerings; and remainder (potentially increasing Discovery’s ownership to 100%). develop a ‘mutually beneficial content production relationship.’

January 2013 TF1 says it intends to keep 49% stake in Eurosport in the long run. www.sportcal.com Q3 2016 Sportcal Insight 31

January 2014 April 2014 Discovery announces deal for majority stake. Agreement values Eurosport Group at €902m (with €85m valuation of Eurosport approves Discovery’s France deducted). JB Perrette named president of Discovery acquisition of Eurosport. Networks International amid European push.

May 2014 Discovery vows to strengthen Eurosport’s rights portfolio as majority stake deal completed. TF1 intends to retain 80% interest in Eurosport France October 2013 at least until end of 2014. Reports emerge that Discovery wants to expedite Eurosport takeover. March 2015 Peter Hutton takes up chief executive role at Eurosport, replacing Jean-Thierry Augustin, who moves to a strategy and development position with Discovery.

March 2015 Discovery acquires 51% stake in October 2015 Eurosport France. TF1 and Discovery confirm completion of sale of 49% stake and Discovery’s full ownership.

July 2015 Discovery to take full ownership of Eurosport as TF1 exercises option to sell 49% stake for €491m and shortly after Discovery’s headline €1.3bn deal for Olympic broadcast rights in Europe.

November 2015 Eurosport unveils dramatically revamped new logo and brand identity, channels now known as and . 32 Media Eurosport

local stories so the rights-holder doesn’t have to leave Eurosport losing money and Bundesliga is worry if it will be locally relevant. absolutely no exception to this commitment.” “Wimbledon is a real sign that people are sitting Hutton echoes Zaslav’s thoughts on the pace up and taking notice of what we’re doing, and of future rights spending, remarking: “I think we’re being flexible enough and sensible enough it has slowed down a bit. We needed to shock not to say we’re taking all of Europe or nothing.” people [at first] and we needed then to build the business sensibly. The focus has got to be on the SLOWING DOWN? quality and how we can get involved with those Speaking at Discovery’s slick and well-drilled top 10 rights in any markets that drive the value international press briefing at Roland Garros this of affiliates, advertisers and now direct-to-home year, David Zaslav, the company’s president and consumers. Our focus is on building exclusivity chief executive, said that investment in Eurosport around those big events and creating a distinct has risen from $150 million to “more than $300 identity for ourselves.” He expects fewer small million per year, and climbing.” He has also deals passing across his desk, with more focus vowed that $5 billion would be spent on sports instead on “the big deals, what they are worth rights over the next decade. Such figures are and is it sensible us going for them?” cited by those touting Eurosport as the industry’s “A lot of what we are about is now premium latest ‘big spender,’ but scratching beneath the and high end,” notes Hutton, “but there is also surface, you see that the pace of the initial rights a legacy there from Eurosport in that it perhaps spree has slowed. shows stuff that other people wouldn’t show in Zaslav told analysts and investors in May that certain markets.” Eurosport has “acquired the sports IP we think we Tennis’ recent US Open was an apt example need” and financial margins will now grow with of the approach now taken by Eurosport. Wall- more rights only being added “opportunistically.” to-wall coverage was carried across linear TV and The top brass at Discovery, a public company, the Eurosport Player over-the-top service, with remain under close scrutiny when it comes to exclusivity enjoyed in the UK as rights were not rights spending in Europe, none more than when sold on to pay-TV’s Sky. This was a similar tactic Zaslav and Andy Warren, the outgoing chief to that adopted with the Australian Open in the financial officer, were pressed over the spending UK, where Eurosport holds all rights and has on the Bundesliga rights. traditionally sold on the non-exclusive rights to Those posing the questions, still acutely aware the semi-finals and finals to the BBC, but this time of Zaslav’s description of Eurosport as “the home retained all the rights as part of its exclusivity push. of everything but soccer,” wondered if the rights “Part of the real battle is how do you associate spend would justify the impact on the business. Eurosport with live exclusive coverage of major But Warren remained bullish, proclaiming: events,” says Hutton. “That’s difficult and it takes “Eurosport does not and will never have negative time, particularly because of the nature of the Eurosport’s margins. No sports rights deal that we pursue will deals we have with the EBU and Infront [Sports Peter Hutton www.sportcal.com Q3 2016 Sportcal Insight 33

SMALLER INTERNATIONAL FEDERATONS Eurosport’s traditional pan-European model embraced by numerous federations desperate for exposure has not disappeared with the strategy shift, but it is no longer the focus and some smaller sports have lost out as a result. Solutions have been found for the likes of the Professional Squash Association and the Badminton World Federation in deals for digital coverage only on Eurosport Player, but others are counting the & Media] as a lot of them are long-term non- cost of Discovery and Eurosport’s drive for exclusive deals. premium rights. “You don’t change your content association Hutton admits: “It’s a small and relationship- that quickly, so chances like the US Open to take based industry and it’s very difficult to disappoint that exclusive in a major market is brilliant for us. people, particularly when they’re old friends and It allows you to surprise people and then invest in people who have done nothing wrong. We’ve production and on-air talent like John McEnroe. changed what we want to do and federations can It’s a sign that we want to be associated with rightly turn round and say ‘we’ve done everything the best in the business as opposed to being you’ve always asked us to do’ but they don’t the lowest common denominator ‘other’ sports necessarily fit where we want to be anymore. channel that people have on their systems.” You don’t want to let people down and those Zaslav repeatedly insists that the plethora of sort of decisions are tough but we’re going to rights acquired have been done so by paying, become about a smaller number of sports, yet in most cases, only a “low single-digit increase” higher quality.” in rights fees. Discovery’s motivation to pepper So does that make Eurosport Player the Eurosport’s schedules with new additions is destination for smaller sports, with only quite simple: boost distribution and advertising highlights shown on the linear TV channel where revenues, and swell subscriptions to Eurosport previously they would have been treated to Player. A stronger Eurosport portfolio affords extensive live television coverage across Europe? Discovery more negotiating power and raises Not necessarily. the value of Discovery’s channel bouquet when “There’s a role for doing longer-form content striking new distribution contracts across Europe. on OTT and shorter-form on TV, but I’m not a Hutton describes Discovery as “naturally massive fan of showing [only] highlights,” Hutton wary of getting involved in the sports business” stresses. “We like the deal we did with squash and says that conversations around building and that gives us a good exclusive story in Europe a “sensible business plan behind any major and squash is a great product and a forward- acquisition” have been “pretty healthy so far.” thinking federation, but that doesn’t mean we He takes a more circumspect approach to the want the Player to be the home of lots of niche sizeable jump in Eurosport’s budget, saying: sports. I’m much more comfortable with events “I don’t necessarily want to go out and buy like Wimbledon or MotoGP, where you’ve got a everything. I want to buy things that fit with volume of live feeds that are available exclusively sensible plans that won’t shoot you from behind on the OTT product as well.” the next day.” Heavy emphasis has been placed on the Attitudes towards Eurosport on the other side development of Eurosport Player (and Discovery’s of the negotiating table have altered, with rights- own OTT service ), with Zaslav setting a holders looking for a rich reward now that the target of 1 million subscribers by 2017 and an purse strings have been loosened. Federations additional $100 million in revenue. and leagues have been left disappointed, Events previously aired by Eurosport could, though, if they were expecting excessive ironically, now end up on a channel that the spending from Eurosport, according to Hutton. Discovery-owned broadcaster is committed He admits that it’s “always difficult dealing with to rolling out across Europe as part of its most John McEnroe at people whose expectations have changed and lucrative rights acquisition to date: the IOC’s the US Open therefore they’ve promised their constituents Olympic Channel. Having launched at the end big [rights fee] increases.” He offers the example of the 2016 Olympics, the Olympic Channel is of the Bundesliga, where Eurosport renewed in showing over 35 live sports events before the Estonia, Latvia and Lithuania (until 2021), but end of the year in partnership with international didn’t retain rights in other European markets sports federations. However, the Olympic Channel after failing to match the jump in fee targeted. remains a solely OTT product for now and not a He stresses: “Even though we’ve got a great linear television proposition as distribution deals relationship with them, it was important for us seem no closer to being announced; and so to say ‘no, this is what we think the commercial those unlucky federations seem set to continue to value is,’ and if that means losing the rights in bemoan the loss of Eurosport’s household reach. Scandinavia then we’re prepared to walk away.” 34 Media Eurosport

EUROPEAN ACCOMPLISHMENTS AND ASIAN AMBITIONS Discovery has made strides in various European OLYMPIC RIGHTS markets since investing in Eurosport, most notably Scandinavia, on the back of the $1.7-billion SALES IN EUROPE acquisition of the Nordic SBS television and radio Having been accused in some previous non-exclusive coverage assets of ProSiebenSat.1 in 2012. A local Eurosport quarters of ‘overspending’ on of the Olympics on Eurosport channel has been introduced in Norway, where Olympics rights in Europe, (through the EBU until 2012). But domestic rights to the top-tier soccer league Discovery now maintains that it he notes: “This time will clearly be have been secured (as is the case with the Danish will be handsomely rewarded different from that in many ways. Our Superliga). Uefa Europa League and national team for its €1.3-billion investment ambition is much more aggressive qualifying matches, plus popular sports locally such through improved distribution than it was in the past.” as handball, have also been tied up amid the push and advertising deals, additional Discovery could opt to showcase to locally strengthen the Eurosport channels. Eurosport Player subscribers and, all of the Olympics rights itself In the UK, rights (albeit non-exclusive) to crucially, a healthy return from in a handful of markets, with Wimbledon were picked up for the first time, sub-licensing deals with other Norway and Sweden two possible while German additions – outside of the headline broadcasters. Discovery’s Zaslav candidates given its ownership Bundesliga rights swoop – have included the FA proclaimed in August that the of free-to-air channels in the two Cup, MotoGP and Diamond League. The Premier Olympics will “not only make money countries. Hutton explains: “We League has been retained in Romania, while a but it will be quite profitable for us.” look at every market separately rare local rights deal was announced in Portugal To date, rights have been sold and it’s not just about the financial as Formula 1 was added to the programming on to 11 broadcasters, but with return for the games. It’s also about schedules until 2017. Key rights were added in Eurosport retaining pay-TV rights doing it justice, giving the IOC an Poland through the addition of two Ekstraklasa to showcase the Olympics in each experience that makes them want matches per week and long-term pan-European market. Deals have been struck in to renew with us and transforming agreements completed since Discovery acquired Austria (ORF), Croatia (HRT), the the image of the Discovery brand. Eurosport include the Australian Open (to 2021), Czech Republic (Ceska Televize), How do you make the whole World Snooker events (to 2026), FIS World Cups Finland (YLE), Hungary (MTVA), Discovery bouquet more relevant and World Championships (to 2021) and the Ireland (RTE), the Netherlands (NOS), with more cutting-edge content? Superbike World Championships (to 2019). Slovakia (RTVS), Slovenia (RTV The Olympics is an opportunity to Despite the flurry of rights deals spanning various Slovenija), Switzerland (SRG SSR) and do that across multiple channels, markets, Hutton has been left disappointed with the UK (BBC). not just the sports channels.” progress in Asia, a region close to his heart after his With all 11 deals done with public Significant rights fees increases time there at IMG, Ten Sports and International broadcasters (and EBU members), have been generated in Discovery’s Channels. Discussing markets earmarked for is that then Eurosport and the IOC’s Olympic deals to date, including future growth, he reveals: “We still need to make preferred route? “We’ve talked a £115 million from the BBC for the some decisions about where we want to go with lot to commercial broadcasters and 2022 and 2024 games, and Hutton our Asian business. Setanta has been a good we’ve certainly not closed the door asserts that, “net we’re ahead.” He acquisition for us and is a nice little niche and we’ve and it could well be that in some of continues: “But we don’t want to be built the Rugby Pass proposition on the back of the markets we’ve not announced overconfident and say ‘this is going that which has a good long-term future. I’d certainly that we do go with commercial to end up massively profitable.’ like to do more with the channels in Asia. We’ve broadcasters,” Hutton responds, The reality is we’ve still got a lot of fought so many battles and maybe we haven’t adding, “but there’s also a tradition markets to go and it’s the clear truth concentrated enough on our Asian business.” to respect, and a way of treating that the markets you do first are Hutton continues: “I’d also look at potentially the Olympics. So far, when we’ve going to be the easiest markets. launching sports channels in other markets as well. looked at each market, we’ve been “It’s an eight-year deal and One of the great things about Discovery is it’s a balancing out all sorts of things, the market will change massively worldwide group and we regularly go to worldwide including tradition, the wishes of between now and the end of meetings, and people from all the markets that the local NOC and the IOC and our rights [deal]. There are lots Eurosport isn’t in are saying ‘what can we do in ad sales.” of elements there where you sport?’ There is plenty of room for growth outside Negotiations have been simply don’t know, such as the of our home territories.” particularly tough in Germany, where development of 4K, how OTT will be There are clearly plenty of more sizable public-service broadcasters ARD across Europe by that point… also transactions to be signed off by Discovery as and ZDF have set their bid to reflect the location of 2024 is going to be a Eurosport further swells its rights portfolio and looks the proposition of simultaneous big factor. to shed lingering stereotypes about secondary coverage on Eurosport (which is “We’ve built everything on the rights or low-scale production. But the spend is not available free-to-air in Germany). basis that the Olympics could be likely to be irrational under Hutton’s watch, and, by Spain and Turkey are also tough anywhere in 2024, but clearly if it’s in his own admission, the bulk of the rights buying has markets in the sub-licensing Paris, Rome or Hungary [as opposed already been done. operation. So has the non-exclusivity to fourth and final bidder Los He likens the transformation to “turning round of coverage deterred some bidders? Angeles] then it’s in the right time a very big old ship.” How far that ship ventures Not so, says Hutton, who points to zone and it helps us.” further outside the European seas remains to be seen.