Bloomberg News

Discovery Acquires U.K. Television Production Company Betty

November 07, 2011

Nov. 7 (Bloomberg) -- Discovery Communications Inc., the owner of the Discovery and TLC pay-television channels, acquired Betty, a London-based production company, as part of a drive to expand outside the U.S.

Betty will develop and produce shows for Discovery channels and supply formats from its library of programs, the companies said in a statement. Financial terms weren’t disclosed.

Discovery, based in Silver Spring, Maryland, is seeing “enormous” growth overseas and is seeking international acquisitions, Chief Executive Officer David Zaslav, 51, said in an interview last week. Led by former BBC executive Liz Warner, Betty will operate independently and keep its full-time staff of 20, the companies said.

The purchase marks Discovery’s first acquisition of a content company, according to Tammy Shea, a company spokeswoman.

TLC has already been working with Betty, commissioning a U.S. version of the BBC series “Freaky Eaters,” a show about people with unusual eating habits.

Discovery will look to create more U.S. versions of Betty’s library of shows, as well as distribute them in emerging markets, according to the statement.

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

The owner of the Discovery, TLC and Animal Planet channels last week raised its forecast for the year and reported third- quarter sales that exceeded analysts’ estimates, driven by U.S. and international growth.

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.”

Discovery Class A fell 0.9 percent to $44.02 at the close in New York on Nov. 4 and has gained 5.6 percent this year.

--Editors: Rob Golum, Anthony Palazzo

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

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


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