Discovery chief David Zaslav transforms television company

If you like stories about lions, polar bears and especially sharks stalking their prey in the wild, you can always watch that on the Discovery Channel. But if you prefer a tale about a tenacious corporate animal poised to challenge the kings of television, take a look at the channel's parent company, Discovery Communications, and its kinetic CEO, David Zaslav.

Zaslav, former chief of NBC Universal's cable services, assumed his place in the big media Serengeti in 2007 when he took charge of Discovery DISCA, which has 13 channels in the U.S. including Animal Planet and TLC.

Since then, he has grabbed attention with initiatives designed to transform what was becoming an also-ran television service into a vigorous worldwide rival to giants including Disney, NBC Universal, News Corp., Time Warner and Viacom.

"He's rejuvenated Discovery and taken it to a different level, which is really pretty tricky," says former NBC Universal CEO Bob Wright, who was Zaslav's boss for about 20 years and now is a senior adviser at Lee Equity Partners. "They've re-created the novelty of what Discovery was in the mid-1990s."

About 885,000 viewers were tuned in to Discovery's channels at any point through the day in the second quarter, up 10.4% vs. the same period last year with shows such as Discovery's Deadliest Catch and MythBusters, Animal Planet's Whale Wars and TLC's hit Jon & Kate Plus 8.

Zaslav, 49, says the best is yet to come. The Brooklyn-born former lawyer plans to launch a women's channel with Oprah Winfrey in early 2010, and a kids' channel with Hasbro later next year. He's also talking with director Steven Spielberg about producing high-profile shows about science.

"The first thing (Spielberg) told me was that his kids' TVs are set to our channels," Zaslav says. "Our channels are interesting and safe. Then he went on to talk about how he spent the whole weekend watching (old episodes of) Deadliest Catch to get ready for (this season's) premiere episode. When you think about Discovery, it opens any door."

Yet survivors in the Darwinian world of cable programming need compelling shows and marketing, not just star power. For example, Winfrey's widely publicized role as a co-founder of women's channel Oxygen in 2000 wasn't enough to keep it from being an also-ran service before NBC Universal bought it in 2007.

Zaslav's plans also may seem too extravagant if ad sales, which account for 45% of his company's revenue, don't pick up in a big way. Discovery is "not immune from the broader ad market, and every network owner has to fight for ratings every day," says Gabelli & Co. analyst Christopher Marangi.

Still, Wall Street is optimistic. Discovery's shares have rocketed 55% to $21.68 so far this year, a period when the benchmark Standard & Poor's 500 has appreciated 10.5%. That's due in part to its status as one of just two pure-play cable programming stocks (the other is Scripps Networks): They look good in a recession because about half of their revenue is guaranteed; it comes from payments by cable and satellite operators.

Investors also like the fact that Discovery owns almost all of the predominantly non-fiction programming it airs. These shows appeal to audiences around the world — including growing markets such as India and China. About a third of Discovery's revenue comes from outside the USA.

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