The trend of consolidation in the telecom and media industry continues as Discovery is making a deal to buy Scripps (Food Network and HGTV home improvement) for $11.9b (value of $90 per share), beating out rival Viacom who also wanted Scripps.
To own Scripps would mean Discovery will control 20% of the ad-supported pay-TV audience in the US and would take Scripps' content to 220 countries and territories. Discovery will also gain leverage in negotiating with advertisers and distributors.
There is analysis, however, that both are making the deal from positions of weakness after showing lower-than-predicted revenues.
Discovery has made attempts to buy Scripps occasionally over the past 9 years, but they couldn't agree on a price.
The industry is tending toward making big cuts in costs and increasing scale in the face of the current media consumption environment.