Discovery, Inc. reported strong revenue gains in Q1, but the company slipped to a small loss, of $8 million, in large part due to costs associated with its Scripps Networks Interactive acquisition.
“The first quarter of 2018 was a historic and pivotal period for Discovery,” said David Zaslav, the president and CEO for Discovery. “We closed on our transaction to acquire Scripps Networks Interactive, becoming the global leader in real-life entertainment and home to an enhanced portfolio of quality and trusted enthusiast brands. As our industry continues to evolve, we are uniquely positioned to maximize the value of our traditional pay-TV business while driving new opportunities and growth from our digital and direct to consumer businesses around the world.”
Revenues were up 43 percent to $2.31 billion, including $1.1 billion from international networks and $1.2 billion from the U.S. The U.S. revenues were up 42 percent, boosted by the Scripps, OWN and The Enthusiast Network transactions, with a 55-percent gain in ad revenues to $627 million and a 26-percent increase in distribution revenues to $514 million. At the international networks, revenues were up 47 percent, with distribution revenues gaining 20 percent to $537 million and ad revenues up 37 percent to $385 million. Even excluding the Scripps transaction and currency effects, international revenues were up 28 percent. Discovery said its international businesses saw gains due to digital revenues and higher contractual rates in Europe following further investment in sports content, content licensing agreements in Asia and increases in rates in Latin America, partially offset by decreases in subscribers in Latin America and decreases in contractual rates in Asia. Ad revenues internationally were boosted by Olympics coverage in Europe. The company also posted gains in other revenues thanks to the sublicensing of Olympics sports rights to networks throughout Europe.