In an age of streaming services where the battle for original content and top talent has become incredibly costly for Netflix, Inc. (NASDAQ: NFLX) and AT&T Inc. (NYSE: T)-owned HBO, live sports as its own "original content" has become an attractive alternative for networks.
Discovery Communications Inc. (NASDAQ: DISCA) has demonstrated a commitment to diversifying its coverage to include live sports, doubling down on soccer though its deal with Eurosport and winning major cycling and tennis rights.
Perhaps the network's most interesting recent move is its exclusive deal with Tiger Woods, made as part of its bid to build the "Netflix of Golf" with its new streaming service, GolfTV.
CEO: Golf Fans Are Big Spenders
Speaking at CAA’s World Congress of Sports event in Dana Point, California this week, Discovery CEO David Zaslav stressed how important valuable intellectual property is for the network — and how sports are an attractive component.
“It’s really about this journey to IP, and the surest IP in the world is sports,” the CEO said.
While many may think the value of sports has peaked, it's in fact rising due to Netflix and HBO "cherry-picking all the best talent," he said.
"Our strategy is we don’t want to be a generalist, we don’t want to play that game; let’s go to these individual categories that people love, like golf or food."
No demographic likes to dive deeper or spends more than golf fans, Zaslav said.
"We want to build a whole golf ecosystem where you can buy the clubs. If you like what Rory is wearing you can buy it. You can take lessons from your favorite instructor or you can book a golf vacation on our service.”
The CEO said that while traditional TV viewership is flat or declining, Discovery is the largest international media company growing in the low-single digits.
The company is generating $2.5 billion in cash and "is striving to get to $3 billion," he said.
'A Big Global Scale Business For Us'
Speaking about Discovery's deal with Woods, Zaslav said that while he's the most-known athlete on earth, the golfer is the least-known personality.
"What does Tiger's voice actually sound like? What does he really care about? For me, it's about this incredible global curiosity about this incredible human story and athlete. For Tiger, it's about 'I’m going to have a direct relationship with everybody that loves golf.'"
The fact that golf is played virtually 52 weeks a year and is an incredibly global sport with beaucoup IP and transaction opportunities makes the sport appealing to the network.
Discovery is taking its plan with golf even further, announcing it will host its own primetime golf events, similar to "The Match," with Tiger Woods participating in a first event that's set to take place in Tokyo.
Zaslav said there will be additional made-for-TV golf events put on by Discovery, and Woods will be involved in the development of the tournaments along with participating in them.
“We think that, of everything we are doing, golf has the best chance to be a big global scale business for us.”
Discovery Networks shares were up 2.08 percent at $29.48 at the close Friday.
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