Discovery Communications Agrees to Buy Scripps Networks

Discovery Communications has agreed to acquire Scripps Networks Interactive for $11.9 billion, combining two powerhouses of nonfiction television programming at a time of major upheaval in the cable-TV business. The tie-up is a bet that bigger is better as the television industry is upended by cord-cutting and the rise of “skinny” online TV bundles from the likes of Hulu, YouTube, Sling TV and others. The thinking is that a broader portfolio of channels that specialize in nonfiction and lifestyle programming like travel, food and nature could appeal to younger viewers and give the combined company a leg up in negotiations with advertisers and programming distributors.

The deal will create a must-buy network group for advertisers interested in targeting women and help the network command more premium ad rates. Of the top 20 US cable networks, the merged company will control four of the top five with the highest percentage of female viewers—TLC, HGTV, Investigation Discovery and Food Network. Discovery said it would be able to expand Scripps’s channels into more overseas markets, which could help generate significant additional revenue. The combined company is also touting its short-form video production, which will help it gain more viewers and ad dollars on social-media platforms. The deal could put pressure on other media companies, from AMC Networks to Viacom Inc., that must defend their turf on the cable dial.