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Discovery buys Scripps to float its shrinking ad business

Discovery Communications buying Scripps Networks Interactive for $14.6 billion has been hailed by many as a match made in heaven – is this a case of tying two bricks together to see if they float? Or are there genuine synergies within the newly formed group? It could be that in two years’ time the combined entity is looking for rescue. The combined entity’s networks will hold around 20% of the ad-supported pay TV audience in the US, a sizeable business today, but one that is shrinking and shifting to different formats and screens. A quick look at the profit rates for the two companies over the past few years paints a picture of a difficult period ahead for the merged…

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