Discovery moving ops HQ to Scripps in Knoxville

Jim Gaines
Knoxville

Instead of closing the Knoxville campus of Scripps Networks Interactive, Discovery Communications will move its national operations headquarters to Knoxville, the company announced Tuesday.

At the end of August, Scripps and Maryland-based Discovery announced that Discovery would buy Scripps in a cash-and-stock deal worth $14.6 billion. The deal includes Discovery’s assumption of Scripps’ $2.7 billion debt, and is expected to close in early 2018.

Scripps’ roughly 1,000 Knoxville employees have been uncertain how the sale would affect their jobs. While the fate of individual jobs remains unknown, Discovery plans to keep Scripps operations here and expand.

Scripps CEO Ken Lowe informed employees Tuesday afternoon by letter.

“In making these decisions, David (Zaslav, Discovery president and CEO) and his team have comprehensively evaluated the capabilities and advantages of all of their locations, and decided that our Knoxville campus has the amenities and benefits ideal for a base for their U.S. business,” Lowe wrote. “Factors that have been influential in this decision include an attractive cost of living, enviable facilities, strong operational capabilities, and of course the amazing Scripps Networks employees. It’s David’s belief that this move will help ensure Discovery can run its business most efficiently in the future, once the two companies are combined.”

Discovery’s move to Knoxville will likely be sweetened with state incentives, according to Jennifer McEachern, communications director for the Tennessee Department of Economic & Community Development.

”ECD has offered an incentives package, but the details of the package will not be made public until the project has been contracted,” she said in an email.

Discovery announced the Scripps news in conjunction with several other moves. Maryland-based Discovery will close its Silver Spring head office and move its global headquarters to a new building in New York City by late 2019. That will affect about 1,300 workers. The company does plan to maintain a network hub and some government relations functions in Maryland.

Discovery’s media distribution facility in Sterling, Virginia, will become a global technology center, but the company also plans to have a technology footprint in Knoxville and several international locations.

“Featuring a compelling environment and infrastructure, Knoxville is a self-contained campus with many amenities and benefits for a National Operations Headquarters, including a low cost of living, and built-in facilities and operational capabilities,” a Discovery news release said. “It will continue to house the major Scripps brands and creative digital teams along with corporate functions.”

Discovery Communications buying Scripps Networks Interactive

Discovery collaborated with state and local officials in Tennessee and Maryland in making its decisions, the company said.

Mayor Madeline Rogero and the Knoxville Chamber have been talking to Discovery executives since the Scripps sale was announced, said Bill Lyons, chief policy officer and deputy to Rogero.

“It took something that could have been perceived as lemons, with losing a major player, and turned it into lemonade with them making themselves a major presence in Knoxville,” Lyons said.

Lyons expects the move to “involve some further investment” to the campus. He called it an “excellent move” that will further cement the city’s roll as a hub for video production and distribution.

“We should also be thankful to Governor (Bill) Haslam, Mayor Rogero and (Knox County) Mayor (Tim) Burchett and their respective teams who have all been actively engaged with David and Discovery since the day the deal was announced, as well as to all of our elected officials who have worked so hard to welcome the company to East Tennessee,” Lowe wrote.

Burchett also commented via Communications Director Michael Grider.

“Scripps has long been a major economic driver and source of great jobs in our region, and the fact that Discovery Communications plans to locate its national operations headquarters here is more proof that East Tennessee is a wonderful place to live and locate a business,” Burchett said.

Scripps produces its content for about half the price of Discovery, according to a Kiplinger report. Discovery announced it hopes to save $350 million over two years by merging and streamlining operations.

“Discovery will evaluate duplication of other facilities and functions in other cities around the world following the closing of the Scripps acquisition to determine the most efficient and effective plan for housing its combined company employee base,” the Discovery news release said. “Decisions on individual job status and relocation also will be made after the close of the Scripps acquisition.”

Lowe acknowledged the continuing uncertainty in his letter to Scripps employees.

“Until the deal is completed, no decisions can be made about individual roles and locations, including any job eliminations and moves at either company,” he wrote. “There is clearly uncertainty for all of Discovery’s employees, just as there is and has been for many of you. However, like me, David (Zaslav) is committed to communicating openly and transparently with his employees, and today’s announcement is part of that commitment.”

Lowe is expected to step down as Scripps CEO, since the merger deal includes a seat created for him on Discovery’s board of directors.