The Comcast – Sky deal has held us all in rapt attention and awe with its huge bids, counter-bids and a blowout offer. Comcast, a parent company to CNBC, E! and several other big names in broadcasting, recently won the bid for the majority control of Sky, one of Britain’s biggest broadcaster.
After years of speculation regarding Sky’s takeover, Comcast’s, the American giant, winning bid of £17.28- a share bid easily beat Disney’s £15.67- a share bid. Many business analysts and other finance professionals have questioned Comcast’s decision to pay a hefty amount for Sky, while others have commended Comcast to uplift the company by adding 27 million new customers across Europe.
Sky’s rights to broadcast many of the highest profile sports events across Europe is a major advantage. For example, Comcast will be able to expand the Premier League into the USA, while maintaining solid viewership back in Europe. Although the TV rights for the Premier League will be put to a bid again, the lack of UK broadcasting and telecommunications market that matches the size of Comcast will limit competition for the Premier League. Millions of hours of streaming content can also be exchanged between the two regions, US and Europe. According to Mr. Roberts, the Chairman and CEO of Comcast, Sky’s technology is what triggered him to bid so strongly. The quality of technology and joint minds from the US and Europe will help Comcast be a world leader in cable TV technology. From a marketing point of view, this is a great decision but other concerns still remain.
While the football and cricket broadcasting rights will benefit Comcast in the US, there is still a potential risk as other online streaming services such as Netflix and Amazon Prime are making bigger strides in their technology and quality of content. Bigger production houses and actors are willing to get their shows and movies on these platforms instead of cable TV. Netflix and Amazon have bigger budgets and exponentially increasing customer bases which are restructuring the industry of broadcasting and cable TV. Comcast’s shares fell by 8% as investors worried Mr. Roberts overpaid but only time will tell if he has overpaid for Sky.
Comcast still has a lot of work to do to prove the 125% premium over Sky’s valuation price of £30 billion but the signs are positive.