Discovery Communications asked that Sky paid close to £1 billion pounds for their channels, Sky have revealed tonight.
In a statement on their website, Sky defended the move to reject Discovery’s request, which hit the public spotlight on Wednesday evening. As it stands right now, Discovery’s channels, including Eurosport and Quest TV will be pulled by Discovery from Sky’s platforms in the UK and Germany on February 1st. The move means that Sky’s viewers in the UK will be without live coverage of series such as the World Touring Car Championship and the British Superbikes championship.
The dispute between Discovery and Sky has played out over social media since Wednesday. Discovery have launched a major social media campaign through the #KeepDiscovery hash tag. Stars from the world of snooker, cycling and motor bikes have been using the hash tag to drive media attention to the issue.
Following a social media onslaught, Sky have retaliated this evening (Friday 27th February). Sky say that they have “offered hundreds of millions of pounds to Discovery, a $12bn American business, but that wasn’t enough. [Discovery] asked the Sky Group to pay close to £1bn for their portfolio of channels, many of which are in decline.” Sky says that they have never left the negotiating table, also noting that negotiations have been ongoing for over a year until this point. No scale of time is mentioned in Sky’s statement.
Sky’s statement continued: “Sky doesn’t boot channels off our platform. If Discovery don’t want their channels to disappear, as their public campaign suggests, they could have made arrangement to stay on Sky, including free to air with advertising funding or with their own subscription, but they’ve chosen not to do so.”
Both Sky and Discovery are known for paying significant sums of money for sporting contracts: Sky for the Premier League and Discovery for the Olympics moving forward. The portrayal so far makes out that Discovery is the underdog. Sky is part of the Murdoch empire, whilst Discovery is part of John Malone’s empire. Both pay big bucks.
Discovery Communications recorded a turnover of $6.394 billion (£5 billion) for the 12 months to the end of December 2015, which compares with Sky’s £9.9 billion revenue for the 12 months to the end of June 2016. Therefore, Discovery gets half the revenue around half the turnover of Sky. I would question whether every penny that Sky gives to Discovery would go back into programming (my suspicion is that it would not).
I do hope Discovery’s channels stay on Sky. As a motor racing fan, I want to continue to enjoying the likes of touring cars, superbikes and of course the 24 Hours of Le Mans. It is easy to throw Sky under the bus for this, but as with every story, I get the impression that there are two sides to the story. If Discovery’s channels leave Sky, I certainly do not see people’s TV bills decreasing. On the other hand, if the channels stay on Sky there is a good chance of prices increasing further, which is not good news for the consumer.
The fact that we have reached this stage suggests that no one party is at fault and that, instead, both sides have equal blame to take…
Update on January 27th at 21:40 – Discovery have denied Sky’s £1 billion pound statement, claiming that the broadcaster is relying on ‘alternative facts’.