Comcast will write down the value of Sky and seek a buyer for the German business in a US$1bn deal

  • Comcast bought Sky in 2019 for $39 billion.
  • Peacock now has over 15 million paid subscribers in the US
  • DAZN is also hiring engineers elsewhere, despite doing ‘double digit’ reruns.

US media giant Comcast is considering selling Sky’s pay-TV business in Germany, believing the underperforming unit is dragging down growth in the UK, Bloomberg reports.

The German division, which includes operations in Austria and Switzerland, is worth an estimated $1 billion, he said, reflecting the scale of Sky’s European operations.

Sky’s revenue fell 14.7 percent to $4.3 billion in Q3, with lower revenue in Italy and Germany offset by higher revenue in the UK, the company’s biggest market. Across the group, Sky subscriber numbers rose slightly from Q2, up 1.4 per cent to 22,986.

Comcast bought Sky for $39 billion in 2018 following a protracted bidding war, but now values ​​the business at $8.6 billion, reflecting inflation and other volatile macroeconomic conditions that hurt short-term earnings potential.

However, the company said that excluding the impact of currency changes, revenue was in line with last year and boosted by the addition of 320,000 new subscribers, bringing the total number to 23 million. Comcast will be pleased that the number of paid subscribers to NBC’s Peacock streaming service has now surpassed 15 million for the first time.

Brian Roberts, CEO of Comcast, said: “At Sky, our team continues to manage prudently in the UK and Europe in a difficult and rapidly changing macroeconomic and geopolitical environment.” “Together, our company is a leader in very large and profitable markets. Despite the challenges ahead, we are in an enviable strategic and financial position, and our future is bright.”

One reason for Sky’s performance in Germany and Italy is the presence of DAZN. In Germany, DAZN has gained a prominent position in the Bundesliga rights picture, while in Italy, Sky has been taken over by its former rival as Serie A’s leading broadcaster – the two domestic football leagues are the most important assets in each market.

However, DAZN has had its share of problems recently and is now focused on becoming an all-in-one sports platform that offers not only live streaming, but also e-commerce, digital content and betting under the leadership of CEO Shay Segev.

Deadline reports that more staff will be cut at the company’s London headquarters as it looks to decentralize to a ‘hub’ model. The ‘double digit’ cuts mainly affect the company’s engineering and data analytics teams, while the company is hiring new staff in India, Poland and the Netherlands.

DAZN is reportedly looking to double its engineering team in the next 12 months, expanding its global footprint. John Glasur, the company’s executive vice chairman, is also moving into an executive role.

Comcast has been contacted for comment.

SportsPro says…

Sky revolutionized the pay-TV market in Europe when it launched its satellite service in the United Kingdom, using the embryonic Premier League as a route to adoption in the early 1990s. The model has been replicated by many others around the world, with the former BSkyB acquiring full control of Sky Italia and Sky Deutschland in the mid-2010s.

This European footprint has offered many economies in terms of technology, content and central resources, but continental businesses have always trailed the UK, whose sports media market is second only to the US.

Crucially, Sky has significant mobile and broadband operations in the UK that allow it to sell bundles that include a number of communications services. This increases revenue and reduces congestion.

Germany, which has traditionally been a weak pay-TV market until recently, is a different case altogether. Former state monopoly Deutsche Telekom is a major player in mobile and fixed communications, while Vodafone has been building its presence through acquisitions and full fiber joint ventures. Perhaps Sky Germany is far more valuable as part of a larger communications business than as a pure-play TV provider.

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