In a busy day for Discovery, the company also announced its second-quarter results, marked by an 8% decline in net income.
Discovery said that improved operating results and lower restructuring charges were offset by currency-related transactional losses vs. gains in the prior year and increased losses from equity investees. The company also said its solar investments continue to have a negative impact on net income, though they are expected to have a positive impact on net income for the full year.
Discovery also saw its free cash flow fall 48% to $157 million during the second quarter amid cash flow from operations falling to $188 million and capital expenditures rising 11% to $31 million. Capital expenditures increased mostly due to higher technology and infrastructure spending.
Still, quarterly revenue rose 2% to $1.75 billion thanks to 2% growth at U.S. Networks and 3% growth at International Networks fighting off a 4% decline at Education and Other.
Discovery’s U.S. Networks growth was driven by 4% distribution growth and relatively flat advertising growth. Higher rates managed to somewhat offset subscriber declines and but higher ad pricing and continued monetization of Discovery’s GO platform was impacted by lower delivery and the Group Nine transaction.
The mixed results for Discovery come as the company’s blockbuster $14.6 billion deal for Scripps Networks Interactive is dominating the news cycle.
Together, Discovery and Scripps will control about 20% of ad-supported pay-TV audiences in the U.S. and will account for more than a 20% share of women watching primetime pay TV in the U.S.