Discovery Communications Inc. is in talks to buy Scripps Networks Interactive Inc., a deal that would put cable networks Animal Planet and HGTV under one roof, the Wall Street Journal reported, citing unidentified sources.
Discovery, valued at $15-billion at Tuesday's close, shot up 9.4 per cent in late trading. Scripps, with a market cap of $8.7-billion, surged 10 per cent.
Cable networks have been losing subscribers as viewers pay more attention to their smartphone apps, YouTube videos and streaming services such as Netflix. Joining forces would help Discovery and Scripps strengthen their hand in negotiations with distributors like Comcast Corp. and AT&T Inc., which are trying to shed little-watched networks from their basic packages.
"There's more pressure on cable players around the world, satellite and mobile players, to merge or figure out how to offer all those together," Discovery Chief Executive Officer David Zaslav told reporters last week at Sun Valley, Idaho, conference hosted by Allen & Co. "Two to three years from now you'll buy that all from one person. We have great, exclusive content to provide, so they're going to need us."