Sky’s final showdown
The battle for Sky will come to an end this weekend. Fox, which is controlled by the Murdochs and Comcast will have their final push to try and snatch the stock. Fox’s latest bid is 1,400p and Comcast’s is 1,475p. Since Fox’s offer is lower they will be given the first chance to put forward a new bid, and if Comcast’s counteroffer exceeds it, then there will be a straightforward auction. Given that Comcast’s bid already values Sky in the region of £26/7 billion, we could see a record being set for an auction in the UK.
Sky is in demand for several reasons, their broadband and phone businesses are performing well but it is their 23 million subscribers for pay TV that is of real interest for the bidders. Sky have invested heavily in their own content and it is ‘paying off’. These days, content is king and that is why the battle for Sky has been fierce. Fox are in the process of selling the bulk of their entertainment assets to Disney, and they are keen to acquire Sky. Disney plans to pull its content from Netflix and launch its own streaming service, and they would be only too happy to have Sky’s output too. Comcast have their own pay-for-view TV stations and Universal Pictures, and they are also looking to beef up their catalogue of content.
The rise of Netflix and Amazon Prime has forced others in the entertainment industry to up their game. Both companies have poured billions of dollars into content and other players are scrambling to catch-up. No single platform has dominance, and ultimately quality will top quantity, so as along as companies keep offering popular TV shows and films, they will remain relevant. Comcast’s latest bid is a 37 per cent premium on Fox’s initial offer that was made nearly two years ago, and the final sale price is likely to be higher again. These figures may seem excessive, but customers are fickle and if you don’t produce the goods you will get left behind.
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