Discovery mulls own sales house as Sky talks drag on

Discovery: retaining Sky and moving to Channel 4 are options under consideration
Discovery: retaining Sky and moving to Channel 4 are options under consideration

Discovery's review of its estimated £150m-a-year ad sales deal has gone down to the wire, as it considers whether to stick with Sky, move to Channel 4 or set up its own sales house.

Negotiations have gone on longer than expected after Campaign reported in June that talks were under way.

The US broadcaster behind Animal Planet and TLC is believed to have been haggling with Sky over a number of issues that go beyond advertising. 

A key issue is thought to be Discovery’s carriage deal – the amount of money that Sky pays to carry Discovery’s channels and their prominence on the electronic programme guide. A potential deal with Sky could involve the UK and other European markets.

However, Discovery has also continued talking to Channel 4 and sources claim it is seriously considering bringing ad sales in-house – a radical move when ITV, Channel 4 and Sky dominate the British TV ad market. Conversations with ITV did not progress.

Discovery handles its own ad sales in Italy and has a stake in BrandDeli, a TV sales house in the Netherlands, which is a joint venture with Viacom and Fox.

However, it is unlikely that Discovery could replicate BrandDeli in the UK because Fox is a 39% shareholder in Sky and Viacom has a deal with Sky.

When Discovery last negotiated with Sky in 2009, the pair became embroiled in legal action.

It is thought that the current contract with Sky runs out at the end of the year, but Discovery is under pressure to agree a new deal before the annual TV trading season begins in October.

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