Discovery Communications, one of four Fortune 500 companies located in Maryland, plans to move its global headquarters and 1,300 jobs from Silver Spring to New York, the company said Tuesday.
The media company, which operates cable channels such as Discovery Channel, TLC, Animal Planet and OWN: Oprah Winfrey Network and is known for survival shows such as “Shark Week,” plans to relocate by the second half of next year.
“The media industry is rapidly evolving, increasingly global, more consumer-focused and more multi-platform, and Discovery must evolve with it,” David Zaslav, Discovery’s president and CEO, said in an announcement to employees. “The decision to move our global headquarters from its founding home is one we do not make lightly. We remain unwavering in our support of the Maryland and Greater Washington, D.C., area.”
Discovery ranked No. 412 on the Fortune 500 list in 2017. With its departure, Maryland will be left with only three companies on the prestigious list: No. 56 Lockheed Martin, No. 103 Marriott International and No. 472 Host Hotels & Resorts, all of which are based in Bethesda. A Baltimore company last made the list in 2012, but that company, Constellation Energy Group, merged that year with Chicago-based Exelon Corp.
At a news conference Tuesday, Gov. Larry Hogan played down the loss of the Discovery headquarters, saying the company was keeping several hundred jobs in Montgomery County. He said there was nothing Maryland could do to prevent the departure of the headquarters.
“No, we’re not responsible,” he said. “We’ve made it a much more business-friendly place to be.”
In Maryland, where Discovery networks TLC, ID and Velocity have a large presence, the company plans to keep a “network hub” with some network and support jobs and a government relations department. The company did not elaborate on the number of workers or the location of the hub.
Hogan said Discovery’s departure had nothing to do with taxes or incentives, but was being driven by the consolidation of the media industry.
“In the great scheme of things, it’s not going to be the biggest thing in the world,” Hogan said.
But Hogan’s critics were not forgiving. House Majority Leader C. William Frick, a Democrat who is running for Montgomery County executive, said the departure shows that some of Maryland’s efforts to be competitive are not succeeding. He said Hogan had made attracting corporate headquarters a priority.
“It’s a huge loss for Silver Spring. It’s a huge loss for Montgomery County. It’s a huge loss for Maryland,” Frick said.
Sen. Richard S. Madaleno Jr., a Montgomery County Democrat who is running for governor, said he’s disappointed by the departure.
“It just goes to show you the Hogan record is smoke and mirrors,” Madaleno said. “Here we have an iconic brand located in Maryland, and they’re leaving on his watch.”
The number of Fortune 500 companies headquartered in Maryland became a high-profile issue in the 2014 gubernatorial campaign. Hogan, then running for governor as a Republican, routinely excoriated former Gov. Martin O’Malley, saying he drove large public companies out of the state.
"Ten of the state's 13 Fortune 500 companies have already left our state to escape the O'Malley-Brown Administration's 40 straight tax hikes, job-killing regulations and a general anti-employer attitude," Hogan stated in reply to a question during the campaign.
Maryland had five Fortune 500 companies when O’Malley took office and four when he left. None have relocated to Maryland during Hogan’s term.
A spokeswoman for the Maryland Department of Commerce said Tuesday that Hogan had multiple conversations with Zaslav, the Discovery CEO, and that state economic development officials worked closely with Discovery representatives.
“While disappointing, the news that the state was able to secure a commitment to create a network hub and retain hundreds of employees in Maryland is welcome,” said Allison Skipper Mayer, the spokeswoman. “Ultimately, this further highlights the need to advance Governor Hogan's agenda to make Maryland more competitive.”
She said the state has created more than 132,000 new jobs over the past three years.
Discovery also said it will open a national operations headquarter at Scripps Networks Interactive campus in Knoxville, Tenn., where Scripps employs more than 1,000 people, after it closes on its acquisition of Scripps Network. Discovery announced last summer its planned $11.9 billion cash and stock acquisition of Scripps, which offers lifestyle channels such as HGTV, Food Network, Travel Channel and Cooking Channel.
As part of the relocation, Discovery plans to transform its media distribution facility in Sterling, Va., which originates more than 80 global feeds, into a global technology center.
The company said it is in the planning stages of finding space and a location in New York, where it said it would be close to business, investment and production partners. Plans call for bringing together all current Discovery employees, as well as Scripps employees who now work at different facilities in New York. But decisions on individual job status and moves will not be made until after the Scripps acquisition is finalized.
Discovery was launched in Landover in 1985 and moved its headquarters to Bethesda in 1991, then to its current building in 2003. Discovery said it expects to sell its One Discovery Place headquarters building in Silver Spring.
The move will be an economic loss for Silver Spring, Montgomery County and the state, said Daraius Irani, chief economist at RESI at Towson University.
“It was a big presence,” he said. “It made Silver Spring and Montgomery County feel they were the center of entertainment, and now that’s moving to New York. … Beyond the numbers, it does have an impact on the county’s psyche. It is losing a major employer.”
Such a loss can make it even more difficult to attract another Fortune 500 firm, he said.
“And now you have a big building you need to have filled,” he said.
New York Gov. Andrew Cuomo credited the state’s workforce and “unparalleled commitment to economic development” with attracting Discovery, which he said would help “drive jobs and growth in New York.”