US media and entertainment company Discovery Communications has announced cost saving measures as chief executive David Zaslav said he expects its Olympic Games broadcast rights deal to make “real money” for the firm.
Discovery has said it will make a round of voluntary buyouts that may lead to layoffs as it seeks to cut costs by the end of September. It has declined to specify how many jobs will be affected but added that it expects to pay between $40m (€34.75m) and $60m in severance and related expenses. The company employs more than 7,000 people worldwide.
“If it is not going to nourish audiences or help us grow long term, we are attacking it,” Zaslav (pictured) said, according to the Washington Post newspaper. “The ultimate goal is to maximise growth.”
Zaslav added that Discovery could save as much as $120m per year as a result of the cuts. “The cost savings will allow us to continue growing our business while investing in… key areas,” including sports coverage and international growth, he wrote in an earlier memo to employees on Wednesday.
Finnish public-service broadcaster YLE last month became the latest company to strike a deal to sublicense rights to the 2018 and 2020 Olympic Games from Discovery. The deal makes Pyeongchang’s 2018 winter Olympics and the 2020 summer Games in Tokyo available to Finnish viewers on both Discovery’s TV5 channel and sports broadcaster Eurosport, along with YLE.
The news came after Discovery’s agreement with the International Olympic Committee in June 2015, through which it secured exclusive multimedia rights across 50 countries and territories in Europe for the 2018-2024 Olympic Games cycle. The YLE deal followed similar deals Discovery has struck with public-service broadcasters the BBC and NOS in the UK and the Netherlands, respectively.
“The Olympics will not only be profitable but based on the deals that we’ve done already, we expect the Olympics will make real money for us on each of the Games,” Zaslav said yesterday (Thursday).