- Discovery borrows $500 million to increase its cash position during Covid-19 crisis
- Estimated operating loss of $175-$200M from Olympics postponement
- Discovery withdraws its 2020 fiscal performance outlook
Discovery has borrowed $500 million under its credit facility to boost its cash position amid uncertainty caused by the coronavirus.
Discovery has also withdrawn its previous 2020 fiscal performance outlook statement after it was announced yesterday that the Tokyo Olympics will be postponed until 2021, with the firm citing the “unknown impact” the pandemic will have on its financials.
On Tuesday the parent company of Animal Planet, Food Network and TLC highlighted its improved TV ratings in global markets while its customers are self-isolating.
In a filing with the US Securities and Exchange Commission, Discovery said: “On March 12, 2020, the Company drew down $500 million under the credit facility to increase its cash position and maximise flexibility in light of the current uncertainty surrounding the impact of CovidD-19.”
It estimated that the Olympics-driven operating loss will cause a hit between $175 million and $200 million in the third quarter of the fiscal year.
Discovery added: “As a result of the unknown impact of Covid-19 on the Company’s financial results and the uncertainty related to its duration, as well as the impact of the postponement of the 2020 Olympic Games, the Company is withdrawing its fiscal 2020 outlook.
“The Company is not providing an updated fiscal 2020 outlook at this time.”
The Discovery-owned sports network Eurosport had planned coverage of the 2020 Olympic Games in 50 European markets but the cancellation – caused by the pandemic – has brought “unprecedented economic uncertainty.”
The company confirmed that it would not update its fiscal 2020 outlook at this current time, however, it will continue to pursue several cost-saving initiatives aimed to offset some of the revenue losses from the impact of Covid-19.
Earlier this week, Disney looked to raise $6 billion in new debt with the company saying the use of the proceeds will be for “general corporate purposes, including the repayment of indebtedness.”
Earlier this month, Discovery announced its OTT streaming service Dplay will become available to customers throughout the MENA region as the company unveiled a new partnership with Starzplay.