A new media landscape led by digital services and streaming beckons.
Walt Disney and Rupert Murdoch’s Fox and have been effectively outfoxed by Comcast in the final bid for the Sky satellite TV and broadband empire in Europe.
Comcast emerged victorious after offering around £30bn (€33bn) for Sky in a final auction.
‘Sky is a wonderful company with a great platform, tremendous brand and accomplished management team’
– BRIAN ROBERTS
The US cable giant bid £17.28 a share for control of Sky, outpacing the Fox-Disney offer of £15.67 a share.
The result is a blow to Murdoch’s global media empire. Fox already held 39pc of Sky and Murdoch wanted to regain full ownership. Murdoch founded Sky in 1989 and ushered in the pay-TV era in the UK.
It is also a setback for Walt Disney, which agreed a separate deal to buy Fox’s film and TV assets for $71bn.
But what will this mean for the rest of the media world now that a new owner of Sky has emerged?
A signal of the future of broadcasting
Crucially for Comcast, which also owns Universal Pictures, it will make the Philadelphia-headquartered company the world’s largest pay-TV operator, with 52m paying subscribers.
Strategically, the future of media will be about streaming, and both Fox and Comcast know this.
“This is a great day for Comcast,” said Brian Roberts, Comcast’s chief executive, in a statement. “Sky is a wonderful company with a great platform, tremendous brand and accomplished management team. This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.”
The US TV giant views ownership of Sky as a way to buttress its defences against declines in subscribers for traditional cable TV services in its core market, as viewers switch to on-demand services such as Netflix and Amazon Prime Video.
Essentially, the addition of 23m subscribers in Ireland, Germany, Italy, Austria and the UK will give Comcast a powerful launch pad for new digital services to take on the streaming giants. As well as the large footprint, the acquisition of Sky will give Comcast access to a lucrative cashflow of recurring revenue.
In Ireland, Sky employs around 1,000 people and is understood to serve 640,000 households with TV and broadband services.
It is understood that, following the deal, the existing Sky management led by Jeremy Darroch will remain with Comcast.
“This is the beginning of the next exciting chapter for Sky,” Darroch said. “As part of a broader Comcast, we believe we will be able to continue to grow and strengthen our position as Europe’s leading direct-to-consumer media company.”