Discovery May Charge TV Viewers to Watch Some Olympics Sports

(Bloomberg) -- Discovery Communications Inc. is considering charging Olympics fans in Europe to watch niche sports like bobsledding and speed skating, part of an effort to squeeze more profit out of the games and test its growing direct-to-consumer business.

“If you want all the judo, you get it, but you pay for it,” Chief Executive Officer David Zaslav said at the Goldman Sachs Communacopia conference Thursday in New York. “That’s what we’re looking at.”

With ratings down at some networks, the owner of Animal Planet and TLC has been expanding across Latin America and Europe, where pay-TV subscribers are still growing in numbers. In 2015, the media company took full control of Eurosport, a pan-European sports media group, and paid $1.4 billion for exclusive European broadcast rights to air the Olympics from 2018 to 2024 on platforms from TVs to tablets. With that deal, Discovery became the first media company to hold all the European rights for the games.

“The Olympics will be profitable for us,” Zaslav said, and also present opportunities to grow Discovery’s direct-to-consumer offerings.

The Silver Spring, Maryland-based company, which generates almost half its revenue from its international networks, will either sell the Olympics broadcast to stations in each market or keep it for itself in European markets where it will air the games on its Eurosport channel, according to Zaslav. Those broadcast fees should cover Discovery’s cost of the Olympics, he said.

Direct to Consumer

Discovery isn’t the only media company experimenting with charging to deliver niche sports directly to consumers over the Internet. Walt Disney Co. recently acquired a one-third stake in BAMTech, a technology and streaming business formed by Major League Baseball. The deal is seen helping Disney offer more of ESPN’s content online, particularly for niche sports like track and boxing, which typically don’t draw a big viewing audience on the cable-TV network.

“This will give us the ability, with BAMTech, to create complementary product to ESPN and to mine the goldmine of those rights that ESPN has more effectively,” Disney CEO Robert Iger said at the conference this week.