VF and Sky?

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networkn

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#196550 3-Jun-2016 20:14

There are rumors a merger may be in the works, and if I am reading correctly, it's Sky who would be buying Vodafone.

I wonder how something like this would be possible? How would Sky have the capital for this? Who would be the CEO (I can't stomach the thought of John Fellet being in charge of Sky, let alone a much more important company like VF with his complete lack of vision and lack of leadership in change).

I could SORT of understand the other way, but even then, VF haven't really shown they can manage acquisitions incredibly well, with lots of systems from the 2 companies they have acquired recently still to be properly merged to make a workable and improved single billing and management platform.

It seems like a horror story no matter which way I look at it. It could easily put both companies back 3 years, and neither can really afford to be sitting still for that period of time.

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#1565385 3-Jun-2016 20:38

it makes sense for Sky it gives them a way to change their service delivery.

hio77

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#1565387 3-Jun-2016 20:42

MikeB4:

it makes sense for Sky it gives them a way to change their service delivery.

service delivery would be the only way i could see it making sense for sky too.

wait for them to announce "ultraHD™" only over fibre.

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Geektastic

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#1565430 3-Jun-2016 22:53

I'm imagining VF would be a pretty expensive purchase. It has a revenue of $100 billion or so!

MikeB4

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#1565466 4-Jun-2016 07:24

Geektastic:
I'm imagining VF would be a pretty expensive purchase. It has a revenue of $100 billion or so!

VF New Zealand only is up for grabs, it's revenue is not quite that grand.

networkn

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#1565505 4-Jun-2016 09:25

MikeB4:

it makes sense for Sky it gives them a way to change their service delivery.

The upside is pretty clear, I get that, but the downside is that Sky is Tiny compared to the Scope and Size of VF. To my mind, the likely outcomes would be;

1) They would acquire Sky and focus their attention soley on getting Sky delivered Electronically, neglecting the other parts of the business which are profitable (for VF) and causing them to leak customers like a Sieve.

2) They would become overwhelmed with the size of what they bought, the scope of what still is required urgently at VF such as integrations etc, and the project would implode leaving neither party with what is needed or wanted.

This is not a dig at VF, it's staff or it's business model. I guess to some degree I see a serious lack of leadership at Sky and feel it would be an unmitigated disaster for a company who has shown a distinct lack of Vision, etc to try and take on a project as big and with as much

potential, as VF.

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#1565559 4-Jun-2016 09:50

MikeB4:
Geektastic:
I'm imagining VF would be a pretty expensive purchase. It has a revenue of $100 billion or so!

VF New Zealand only is up for grabs, it's revenue is not quite that grand.

Ah. That information was not in the OP.

tdgeek

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#1565580 4-Jun-2016 10:58

MikeB4:

it makes sense for Sky it gives them a way to change their service delivery.

How?

Sharesies

Trade NZ and US shares and funds with Sharesies (affiliate link).

tdgeek

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#1565581 4-Jun-2016 11:09

I don't really get what will advantage both. Or one for that matter. How will VF benefit from yet another company acquired with its own systems as they are still running multiple systems from previous acquisitions. How with this benefit Sky, as ether way they still need to change their hardware and infrastructure model from buildings around the country, 830000+ dishes, 830,000 STB's to what could be half that or zero that if they went full SVOD delivery. Sky has the funds to manage the change.

Service delivery I assume means over broadband? Sky doesnt need VF to make that happen, in fact VF doesnt own a large network, Chorus and LFC's own the vast bulk of the nationwide network.

VF needs to smarten up their efficiencies with one system, Sky needs to work on how, when and what it will do to migrate to a lower cost delivery system and thus its lower pricing. I cant see how these two things that both companies need to do will benefit from a buyout either way or a merger.

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#1565608 4-Jun-2016 11:47

tdgeek:

I don't really get what will advantage both. Or one for that matter.

I can't help but feel that the earlier thread "What does a CEO do?" has some relevance here. Would be interesting to look at both threads in a couple of years time if this was to go ahead.

sbiddle

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#1565612 4-Jun-2016 11:59

Sky need Vodafone more than Vodafone need Sky.

There is nothing stopping Vodafone from simply going out and buying probably 75% of the content on Sky with the exception of sport. Instead of doing this though they buddy up since Rusty and John are good mates.

tdgeek

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#1565632 4-Jun-2016 12:50

Like any such proposition:

1. Its a fair buy, we can see growth that increases the return on todays investment

2. We can merge systems and staff and layoff staff and get efficiencies, again improving return on todays investment

1. is a risk given the proliferation of SVOD.

2. VF has shown little of that to date.

IMHO Sky can fund its own change. Take a regular company, eventually having to upgrade large machinery and prcesses as technology and pricing forces that. Capex comes into play, there are also one off extraordinary costs over that change, then its done.Sky has the opposite issue. If that went full or near full SVOD, there is no need for dishes, STB, the buildings that they currently have, so they can literally dump and write that off, and sell some assets.They will have setup costs, but they already have SVOD in place with Neon and Fanpass, so its more of an upgrade and rehash. They will have satellite costs that in 2019 may be MUCH less, so they can hold onto satellite to a degree, between now and then its just tough, as they pay 20 year old prices so they just have to wear that for now. I don't see how they need VF for this, as IMHO its more or less all in place, the major issue is satellite pricing at the moment. Later they can buy back shares as the assets they need to run a SVOD business are much less than SVOD business. In fact dump the busing they have anyway, you dint need them to drop off and pickup STB's if they still use STB in the future. Maybe VF needs Sky more as they can leverage pricing to attract BB customers. Although they do that already, so I still don't get why its a worthwhile move

tdgeek

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#1565634 4-Jun-2016 12:53

DaveB:

tdgeek:

I don't really get what will advantage both. Or one for that matter.

I can't help but feel that the earlier thread "What does a CEO do?" has some relevance here. Would be interesting to look at both threads in a couple of years time if this was to go ahead.

Yep.If it went ahead and if it was me, I'd sell any assets that aren't needed, there will, be ONE CRM system in place, anything that is surplus will be gone, staff included.

You pay a fair price for a business that earns X profit, then you improve it by reducing duplicated costs.

richms

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#1565638 4-Jun-2016 13:01

tdgeek:
You pay a fair price for a business that earns X profit, then you improve it by reducing duplicated costs.

Unless you are Vodafone when you just run it as yet another system and put the bills on new paper that says Vodafone on it.

Richard rich.ms

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#1565643 4-Jun-2016 13:12

richms:
tdgeek:

You pay a fair price for a business that earns X profit, then you improve it by reducing duplicated costs.

Unless you are Vodafone when you just run it as yet another system and put the bills on new paper that says Vodafone on it.

Yep, bizarre. They are in a very competitive market, and they don't seem to focus on efficiency. Maybe they arent allowed? I assume they don't operate 100% independently from the international VF empire?

Zippity

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#1565661 4-Jun-2016 13:58

Who cares?

Just as long as I continue to get Sky Sports live (esp F1) and my home phone and cell phone keep on working, I'll be a happy chappy :)

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