Comcast chief pledges to preserve Sky’s independence
FT.com, September 23, 2018
Sky will operate independently after Comcast completes its £30bn takeover of the British media company, the US cable group’s chief executive has said after winning a drawn-out battle against rivals Walt Disney and 21st Century Fox.
Comcast won an auction for Rupert Murdoch’s pay television group this weekend with an offer of £17.28 a share, trumping Disney-Fox’s bid of £15.67 a share and concluding one of the UK’s longest takeover sagas.
The deal ends Mr Murdoch’s involvement with Sky almost 30 years after he created the satellite television group that came to be the main rival of the UK’s dominant terrestrial TV players. Brian Roberts, chief executive of Comcast, which also owns NBCUniversal, told the FT that the company encouraged its top executives to act entrepreneurially. Jeremy Darroch, Sky’s chief executive, is expected to stay on following the acquisition.
“The consistent theme at Comcast has been letting leaders of our businesses make their own decisions, being decentralised and keeping an entrepreneurial spirit,” Mr Roberts said. “We’ve said this to Jeremy and the rest of the Sky team … They will be able to act as an independent company but with the resources of a $150bn company behind them.” Comcast’s offer has been recommended by the independent Sky committee created to assess bids for the company. It has set its acceptance threshold at 50 per cent plus one share, which means it will complete its deal even if it fails to acquire a 39 per cent stake currently held by Fox that is being sold to Disney.
Disney has not commented on its plans for the stake. This summer Disney bought Fox’s entertainment businesses, including its Hollywood movie studio, cable channels and Star of India, for $71.3bn excluding debt. The assets included Fox’s 39 per cent stake in Sky — which means Disney will be able to recoup about £11.8bn if it sells its Sky shares to Comcast.
Comcast’s purchase of Sky is priced significantly higher than some analysts had expected but Alice Enders of Enders Analysis said Sky’s move into broadband and its recent successful bid for a new Premier League rights contract had bolstered the company’s appeal.
“It is a unique company,” she said. “It brought premium entertainment to the British public and really made the competition raise its game.”
With 23m subscribers across Europe, Sky will give Comcast a launch pad for new digital services in an era increasingly shaped by streaming providers such as Netflix and Amazon.
The battle for Sky started in December 2016 when Mr Murdoch’s Fox group made a £10.75-ashare offer.
With the tabloid newspaper phone-hacking scandal still fresh in people’s minds, the UK government was under pressure to ensure that a sale of Sky did not hand Mr Murdoch more influence of the UK’s media market.
A lengthy regulatory review then followed until Mr Murdoch stunned his rivals last November when he revealed plans to sell his entertainment assets to Disney. That deal included Fox’s Sky stake, putting Disney in the driving seat to acquire the rest of the company.
But Comcast crashed the party: it made a rival bid for the Fox assets, which it later dropped — but not before Disney had to increase its own offer. Comcast then made a separate bid for Sky.