Discovery Takes Controlling Stake in Eurosport

Discovery Communications on Tuesday said it had taken a controlling 51 percent stake in Eurosport International, a pan-European sports media group, in a deal that values the company at $1.2 billion.

Eurosport, which is vying to become the Europe version of American sports behemoth ESPN, operates one to four channels in 54 countries. Its flagship Eurosport network reaches 133 million homes, and the company is growing as it acquires additional rights to air soccer, cricket and motorsport events.

“The platform itself, together with the brand, which is very strong, makes it a very very unique asset,” Discovery’s chief executive, David Zaslav, said in an interview.

Discovery already owned 20 percent of Eurosport, with TF1, the French media group, owning the other 80 percent until Tuesday. Discovery had the right to acquire control of the asset next year, but approached TF1 and asked to do the deal earlier. TF1 can ask Discovery to buy its remaining 49 percent stake next year, or hold on to it.

Mr. Zaslav said Discovery would marry its local operations with Eurosport’s continental scale, allowing the group to benefit from sales teams that know individual markets. “In every one of this countries we have local sales, local people doing distribution,” he said.

For Discovery, already the largest provider of cable content in Europe, Eurosport offers it the potential to take a dominant position in the lucrative business of broadcasting sporting events.

In the United States, that market is dominated by the four broadcast networks â€" ABC, CBS, Fox and NBC â€" and ESPN, which is owned by ABC’s parent, Disney.

But in Europe, the market remains more fragmented. Regional operators compete with Eurosport for rights, and Sky Sports, partly owned by News Corporation, is another dominant force in European sports media.

Discovery is hoping that with its backing, Eurosport can grow to resemble ESPN in both influence and profitability.

“ESPN is a fantastic asset in the U.S.,” Mr. Zaslav said. “We’ve seen the value of owning sports rights domestically and around the world.”

Rothschild advised Discovery and DLA Piper provided legal advice. Darrois Villey Maillot Brochier provided legal advice to TF1.