Bloomberg News

Discovery’s Zaslav Sees ‘Enormous’ Growth in Brazil, Russia

November 04, 2011

(Updates with closing share prices.)

Nov. 2 (Bloomberg) -- Discovery Communications Inc. is seeing “enormous” growth in emerging markets such as Russia, Brazil and Mexico, and is looking for overseas acquisitions, Chief Executive Officer David Zaslav said.

“We are in position with 11 channels in Brazil,” 11 in Mexico and eight in Russia, Zaslav said today in an interview with Bloomberg Television. Emerging markets “are just getting penetrated now for traditional TV.”

The owner of the Discovery, TLC and Animal Planet channels yesterday raised its forecast for the year and reported third- quarter sales that exceeded analysts’ estimates, driven by U.S. and international growth. Overseas markets offer the biggest opportunity for growth and the company is targeting acquisitions outside the U.S., said Zaslav, 51.

Zaslav wants international channels to eventually make up more than half of Discovery’s sales and profit. Last quarter, overseas operations supplied 33 percent of revenue and 31 percent of operating profit.

“We have enormous growth outside the U.S.,” Zaslav said. Emerging markets look “a lot like the U.S. did five or 10 years ago, with substantial subscriber growth.”

Expansion outside the U.S. has been smoother for Discovery because the company produces and owns most of its shows, Zaslav said. Programs such as “Deadliest Catch,” “Dirty Jobs” and TLC’s “Cake Boss” and “Sister Wives” appeal equally to U.S. and international audiences, he said.

“We have 25 years of library content and we own nearly 100 percent of it,” Zaslav said. “That’s unusual for a company like ours.”

Discovery, based in Silver Spring, Maryland, rose 4.1 percent to $44.02 at the close in New York. The Class A shares have gained 5.6 percent this year.

--Editors: Anthony Palazzo, Rob Golum

To contact the reporters on this story: Andy Fixmer in Los Angeles at afixmer@bloomberg.net; Edmund Lee in New York at elee310@bloomberg.net; Margaret Brennan in New York at mbrennan25@bloomberg.net

To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net; Anthony Palazzo at apalazzo@bloomberg.net


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