Comcast expands sports empire to Europe by outbidding Fox for Sky
By Simon Ward
Comcast, the US media giant, looks to have won the battle for European pay-television titan Sky, after outbidding rival 21st Century Fox, which already has a significant stake in the UK-based company, with an offer of £30 billion ($39.4 billion).
Comcast, which owns US media group NBCUniversal, offered £17.28 per share, to see off Rupert Murdoch’s Fox, which submitted a bid worth £15.67, in a three-round auction that concluded on Saturday.
Sky has urged its shareholders to accept Comcast’s “materially superior” offer “immediately.”
At stake is Sky’s 23-million subscriber base, across TV, telecoms and broadband services, in the UK, Ireland, Germany, Austria and Italy, and premium sports rights the company holds in those countries.
Sky’s board and shareholders have until 11 October to accept the Comcast or Fox offer.
The unusual auction process was ordered by the UK’s Takeover Panel, with the backing of the bidding parties, to resolve a protracted power struggle for Sky.
Comcast had previously offered the highest bid, one of £14.75 per share, which valued Sky at almost £26 billion, while Fox had put up £14 per share for the 61-per-cent holding it did not own, valuing the company at £24.5 billion.
Brian Roberts, the chairman and chief executive of Comcast, said on Saturday that the acquisition would allow his company “to quickly, efficiently and meaningfully increase our customer base and expand internationally.”
In a statement after the auction, Fox said it was “considering its options” for the 39-per-cent stake it currently has in Sky.
It added: “We are proud to have played such a significant role in building the incredible value reflected today in Comcast’s offer.”
Comcast and Fox have been striving to extend their media footprint internationally, in part to ward off perceived challenges to their business from digital content specialists such as Amazon and Netflix.
However, the weekend’s developments appear to bring an end to the 87-year-old Murdoch’s long endeavour to take full control of Sky.
In 2010, his News Corporation sought to take over the company then known as BSkyB, in a move that, at the time, would have valued the broadcaster at about £12 billion, but the board then asked it to increase its offer.
News Corp was prepared to spin off the Sky News channel into a separate company as a concession, only for the negotiations to be put on hold in 2011 following the parent company's involvement in a phone-hacking scandal, which led to the sudden closure of the News of the World, then the UK’s biggest-selling Sunday newspaper.
Following a restructuring of his media empire Murdoch revived his interest in Sky in December 2016 with an offer, from Fox, that valued the pay-TV broadcaster at £18.5 billion.
However, it subsequently faced competition from Comcast, which has a background in cable services and was eager to expand its international presence.
The situation was complicated by a separate bidding war for the majority of the media and entertainment assets of Fox, including the Sky stake, between another media giant in Walt Disney, which offered $71 billion, and Comcast, which put up $65 billion.
However, in July of this year, Comcast withdrew its bid in order to focus on acquiring Sky.
|Comcast-owned sports rights in event of Sky takeover|
|Broadcaster||Country||Selected sports rights|
|NBC||USA||Olympic Games (to 2032); NFL (to 2023); NHL (to 2022); PGA Tour (to 2021); US Open golf (to 2026); British Open golf (to 2028); Ryder Cup (to 2030); Nascar (to 2024); IndyCar (to 2021); Premier League (to 2022); French Open tennis (to 2024); Tour de France (to 2023)|
|Sky||UK & Ireland||Premier League (to 2022); English Football League and League Cup (to 2024); Uefa Nations League (to 2022); Formula 1 (to 2024); English cricket (to 2024); European Tour and Ryder Cup (to 2018); US Open golf (to 2019); US Masters golf (to 2020); British Open golf (to 2021) PGA Tour (to 2021); Super League rugby league (to 2021); Matchroom Boxing events (to 2021)|
|Sky Deutschland||Germany||Bundesliga and 2. Bundesliga (to 2021); DFB Pokal (to 2021); Uefa Champions League (to 2021); ATP World Tour (to 2019); EHF Champions League handball (to 2020)|
|Sky Österreich||Austria||Austrian Bundesliga (to 2022); Uefa Champions League (to 2021)|
|Sky Italia||Italy||Serie A (to 2021); Uefa Champions League (to 2021); Uefa European Championships (to 2020); Bundesliga (to 2019); Formula 1 (to 2020); MotoGP (to 2021); Wimbledon tennis (to 2022); FIBA basketball events (to 2021); NBA (to 2019)|
Sky was launched, as part of Murdoch’s News International, in the UK in 1989, and, following a merger with rival British Satellite Broadcasting, built up its business on the back of the acquisition of rights to English soccer’s new Premier League, which launched in 1992.
Sport has remained a crucial staple of its output, as shown by its retention in February of a majority of the live rights to the Premier League (128 games per season) for the next three years, in a deal worth £3.6 billion.
It also has big money agreements to show sports such as Formula 1, cricket, golf, rugby league and boxing in the UK, and has prioritised soccer, in particular, in taking full control of Sky Deutschland in Germany and Sky Italia in Italy, retaining rights to the top leagues in both countries.
Sky posted revenues of £13.5 billion in the 12 months to the end June, an increase of 5 per cent on the previous year.
Comcast concluded a deal to acquire a 51-per-cent stake in NBCUniversal at the start of 2011, and bought the remaining 49 per cent from the former parent company General Electric in 2013.
NBC remains one of the leading sports broadcasters in USA, with rights to top leagues, series and events including the NFL, NHL, golf's PGA Tour, motor racing's Nascar and IndyCar, England's Premier League and the Olympic Games, the latter in a long-term deal running to 2032.