A cancellation of the Olympics due to coronavirus fears won’t hurt Discovery, the media company behind Food Network, TLC and OWN, it said on Thursday after posting better-than-expected earnings.
In a fourth-quarter earnings call, Discovery Chief Executive Officer David Zaslav sought to reassure investors about coming headwinds such as the shift to streaming and the potential cancellation of the Olympics this summer.
Discovery, which has the rights to the Summer Olympics in Tokyo in some international markets, will be “monitoring” the situation “closely,” the exec said, offering that contingency plans are already in place.
“It [a cancellation of the Olympics] won’t have an adverse impact on financials,” he said without elaborating further.
Quarterly income for the three months that ended in December rose to $476 million, or 67 cents, a diluted share, versus $269 million, or 38 cents, a year earlier. Adjusted EPS totaled 67 cents, beating analysts’ estimates by a penny. Revenue rose 2 percent, to $2.87 billion, meeting expectations.
Zaslav boasted that Discovery has $3.1 billion in its coffers — a sum that he said could be used “like bullets” or act as a protective “mote” in this volatile era in which legacy media companies are facing ratings declines as viewers cut their cable cords.
Discovery has been able to rein in costs by focusing on unscripted shows.
Reality TV, like its hit franchise “90 Day Fiance,” shields Discovery from costly bidding wars for scripted shows and the talent required to make them, he said.
Despite the optimism, shares of Discovery fell 6.8 percent, to $24.67, as broader fears of the coronavirus outbreak pushed the broader market sent stocks spiraling for a fourth consecutive day.
Zaslav also said Discovery is looking to create a streaming service for all its channels in response to the cord-cutting trend, while also retaining the strength of its pay TV business.
“We like our hand in this rapidly evolving ecosystem,” he said. “Audiences love our content. They now just want to see it on all platforms.
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