MUMBAI: Discovery Communications is all set to become the biggest pay-TV operator outside US following its acquisition of German media company ProSiebenSat.1 Group?s SBS Nordic operations and strategic partnership with French media company TF1/Eurosport.

Discovery has signed a definitive agreement with ProSiebenSat.1 Group to purchase the company?s SBS Nordic operations for a total enterprise value of approximately $1.7 billion (?1.325 billion).

The acquisition of SBS Nordic includes 12 television networks in Norway, Sweden, Denmark and Finland, among other assets, and further solidifies Discovery?s long-term growth in the strong Nordic TV markets.
 
The deal also expands Discovery?s brand portfolio by adding general entertainment, scripted and sports programming to the company?s suite of services for the first time. The transaction is subject to regulatory review and is expected to close in early 2013.

"SBS Nordic has a fully distributed portfolio of dual revenue stream networks with a terrific management team that will expand Discovery?s footprint across the Nordic region, which includes some of the most well-penetrated and stable TV markets in the world,? said Discovery Communications president and CEO David Zaslav.

Additionally, Discovery also announced that its Board of Directors has approved a $1 billion increase to its existing stock repurchase program.

Sports broadcasting play

TF1 and Discovery Communications have said that they have taken the next step in their negotiations aimed at forging a strategic alliance which will see Discovery taking a 20 per cent minority interest in the Eurosport group, the parent company of Eurosport International and Eurosport France.

The acquisition of the 20 per cent interest would involve cash consideration of approximately ?170 million ($221.6 million).

A relationship between Eurosport and Discovery Communications would unlock synergies and complementary capabilities, particularly at the European level, in content (sports programming, entertainment, documentaries) and in development opportunities (geographical expansion, new product launches, digital rollout), the company said in statement.

Discovery also would have the possibility of raising its interest to 51 per cent in two years? time. If Discovery exercised its option, TF1 would have the ability to exercise a put option over the remaining 49 per cent, which potentially would give Discovery full ownership.

Discovery would become a shareholder in the TV Breizh, Histoire, Ushua?a TV and Styl?a channels, with a 20 per cent interest in each for a cash consideration of approximately ?14 million ($18.2 million) with the ability to increase to 49 per cent in two years.

The alliance also would aim to enhance the output of documentary, magazine and current affairs channels in order to offer French distributors a flagship range of theme channels built around the content and brand portfolios of the two groups.

In the production field, the proposed alliance would pave the way for the production of magazine and documentary programs of international standing via TF1 Production.

An agreement is expected to be signed in the coming weeks, once the relevant employee representative bodies have been consulted.

?Individually, and taken together, the acquisition of SBS Nordic, our pending strategic partnership with TF1 through the acquisition of a minority stake in Eurosport, and the increase in our share repurchase program are all complementary to our long-term growth strategy of delivering sustained operating results, creating strong organic growth through investment in content, brands and talent, and returning capital to shareholders," Zaslav said.

MUMBAI: Australian pubcaster Special Broadcasting Service Corporation got a new lease of life with a grant of A$158.1 million in the Federal budget investment.

The pubcaster said the funding, which is a 27 per cent increase on SBS?s base Government funding over the next four years, will ensure the sustainability of SBS as a major contributor in the Australian media and enable it to deliver a new national free-to-air indigenous television channel.

The funding will equip the organisation to continue to play its vital role in reflecting Australia?s diverse multiculturalism, and contributing to a more cohesive society, SBS said.

SBS Chair Joseph Skrzynski said: ?SBS welcomes the significant boost to its core funding by the Federal Government. It is recognition that the work of SBS is a vital component of national strategies to ensure the continued success of Australia as a migrant society, maintaining social cohesion in these more difficult economic times. It equips us with the means to address some of the challenges we?ve faced in a changing media landscape and will ensure our ongoing relevance in an ever more multicultural Australia.?

SBS managing director Michael Ebeid said: ?In this Budget we?ve secured the funding SBS needs to be sustainable and to position for the future. The funding increase will offset the slower growth in commercial revenues experienced by SBS, in line with trends across the media industry. It?s the most significant funding boost SBS has ever received, and will support our work in developing news and content that breaks down language barriers and inspires and connects communities.Importantly, it will allow for the creation of a national free-to-air service to broadcast dedicated news and other programs about and produced by Aboriginal and Torres Strait Islander Australians."

From July 1 this year, NITV will be maintained on existing platforms and a new national Indigenous free-to-air service will be launched in late 2012. When the new channel is launched, it will be broadcast on a national free-to-air digital spectrum.