The merger of Discovery and Scripps continues the consolidation of the entertainment business and bodes well for the growth of global consumer products and lifestyle licensing.
GLOBAL–Discovery Communications has reached an agreement to acquire Scripps Networks Interactive for a transaction valued at $14.6 billion.
In what has become a challenging environment in how viewers consume content, consolidation of these networks makes a great deal of sense as the deal will give the combined company control of about 20 percent of all advertising-supported, paid TV in the U.S., as well as the ability to launch more of the successful Scripps brands into international markets.
The transaction, which is expected to close by early 2018, will also see the combined company produce approximately 8,000 hours of original programming annually.
From a branding perspective, the real win for Discovery Communications in the acquisition is its ability to bring much of Scripps content into international markets. According to Discovery, they “see strong opportunities” to expand both Food Network and HGTV viewership globally.
Through the acquisition, Discovery will also operate five of the top women’s networks: Discovery Channel, Investigation Discovery, TLC, Food Network and HGTV. All of these channels have one thing in common: super fans who are emotionally connected with the brands and individual shows, which makes sales of branded consumer products a key factor in the marketing strategy of these networks.
Discovery also plans to increase its short-form social media video offerings, as the cable TV industry struggles with cord-cutting viewers who are gradually migrating to alternative sources, such as online outlets like Netflix, Hulu and Amazon Prime.
In 2015, Discovery was the world’s No. 53 largest licensor, according to License Global’s annual Top 150 Global Licensors report, with $1 billion in retail sales. Some of Discovery’s licensing success has come from brands like Animal Planet, Discovery Expedition and Discovery Kids.
According to License Global’s 2017 Top 150 Global Licensors report, Scripps’ HGTV is the world’s No. 69 licensor with $510 million in retail sales of licensed merchandise. Food Network is No. 109 with $200 million in retail sales.
While not yet announced, we can expect to see consumer products for both companies consolidated under the leadership of Leigh Anne Brodsky, executive vice president, Discovery Global Enterprises, Brodsky is an accomplished licensing industry veteran and LIMA Hall of Fame member who joined Discovery in May 2016 from Peanuts Worldwide and Iconix Entertainment, a joint venture with the family of Charles Schulz, where she served as managing director. In this role, she oversaw the company’s global business, establishing the largest retail presence for Peanuts in the brand’s 65-year history. Additionally, she helped expand Iconix’s global portfolio, leading the acquisition and rebranding effort of Strawberry Shortcake to maximize its media and merchandising potential.
Prior to Peanuts Worldwide and Iconix, she served as president of Nickelodeon Consumer Products, overseeing parent company Viacom’s global licensing and merchandising business, which included major brands like “SpongeBob SquarePants,” “Dora the Explorer,” “Blue’s Clues,” Comedy Central’s “South Park” and MTV’s “Jersey Shore.” She also identified and was instrumental in the company’s acquisition of “Teenage Mutant Ninja Turtles.” Under her leadership, Nickelodeon became a multi-billion dollar retail licensing entity.