Tax leaders’ agenda

When Discovery Communications identified an opportunity to reimagine its tax function, Todd Davis, EVP and Senior Tax Counsel, looked to Ernst & Young LLP and other member firms (“EY”) as a co-creator. Discovery’s acquisition of Scripps, which would make it the largest non-scripted, factual media company in the world, was the spark and catalyst. Rather than undergoing a traditional, post-merger combination of tax functions, with the dislocation and potential relocation that such a change requires, Discovery saw an opportunity. Here was a chance to create a dynamic, agile tax function fit for now, next and beyond. EY’s capabilities, including its state-of-the-art Global Tax Platform (GTP) that helps businesses future-proof their operations, was critical.

The timing was important. The wider role of tax functions is evolving. Regulators are ever asking for more by expanding the scope of compliance requirements and shifting policy and regulation. At the same time technology is changing the rules of the game, digitizing processes and enabling companies to transform their processes, analysis and reporting.

Davis recognized the need for change and the opportunity, but he had worked hard to turn Discovery’s tax function into a high-performing, well-oiled machine and was skeptical about changes that might be disruptive or derail progress. “We’d seen a trend for companies to enter co-sourcing agreements, plugging in to the global resources of larger firms,” says Todd Davis, Executive Vice President – Senior Tax Counsel, Discovery, Inc. “I was a little skeptical. I wanted to make sure this worked for us. We needed a different mindset.” The EY Tax and Finance Operate (TFO) solution is a technology-driven co-sourcing arrangement that helps multinational organizations improve operational effectiveness and efficiencies through innovating the tax operating model and strategic visioning. 

1. Access to experience: Augmenting Discovery’s in-house capability with EY subject-matter professionals as and when required. For example, strengthening key areas such as tax accounting by bringing a new, experienced member to the team to work alongside the core parts of that function that remained at Discovery.
2. Automation and digitization of the tax function: Leveraging EY scale to make the kind of technology investments that were impractical at Discovery, including migration of the whole team onto the EY state-of-the-art Global Tax Platform via Microsoft Azure, a scalable, enterprise cloud platform.
3. Ongoing training and support: Taking the strengths of the Discovery team and supplementing through leading-class training in the latest processes, approaches and requirements. Raising skillsets and experience across the team, but also making individuals feel that Discovery is investing in them.

From strength to strength

Discovery’s tax team continues to evolve in collaboration with EY. This has been recognized internally by Discovery’s executive leadership and independently identified as a strength of the business.

Why EY

"We’ve created a team with a single mindset. As good as our in-house team was, we’re now seeing, with EY, that we’re able to go deeper and further with our analysis than we ever thought possible," Davis says.

The EY team's relationships, approach to talent, history and proven record with Discovery, and our TFO experience, were the key attributes for this win. And our strong relationship with the EVP and Senior Tax Counsel was critical.

Our message to the client was clear. The TFO deal assisted in the standardization of processes, better training for the tax team, and the ability to bring new technology to the tax function, as well as recommendations for efficiencies.