It's a major milestone for one of the top nonfiction media companies, an occasion that Discovery CEO David Zaslav described as starting a new chapter. Discovery founder John Hendricks "built this business over the last 25 years," Mr. Zaslav said, "and as the Chapter Two, it's our job to keep growing it."
Exploring new media
It's important to note, however, that that growth will not include an initial public offering, as owning media shares can be as risky as operating an investment bank in today's shaky economic climate. Mr. Zaslav told Ad Age the public status was primarily intended to create more transparency between investors and to "focus on internal growth and create a currency for future acquisitions. Over the next couple years, we'll take a look at what's out there, and continue to be pushing hard in the new media space." This week, John Malone's Discovery Holding Co. and Advance/Newhouse Communication, completed a deal to combine their interests and both are now major shareholders in the new public company.
Last fall, Mr. Zaslav spearheaded Discovery's $250 million acquisition of HowStuffWorks.com, a science-based, Wikipedia-esque website, and is currently focused on finding similar opportunities in the digital space. "More and more people are going to new platforms, and as the No. 1 nonfiction media company, it's our job to find them wherever they are."
The public trade also comes amid recurring rumors that Discovery is up for sale, with Mr. Zaslav's former employer, NBC Universal, bandied about as an interested buyer. At a Portfolio magazine panel Sept 16, NBCU CEO Jeff Zucker said the company is currently evaluating all of its options, but gave little credence to reports such as its rumored interest in Scripps Interactive, being spun off from parent company General Electric or being acquired by Time Warner. Media investor Steve Rattner, managing principal of the Quadrangle Group, added that Mr. Zucker's two most recent acquisitions, The Weather Channel and Oxygen Media, have been the most significant in the last 18 months because the current marketplace can't support anything much larger.
"There's not been a deal over $5 billion in years because banks are on the sidelines. The big banks are going into their cocoons, huddled before the storm," Mr. Rattner said.