Sky TV sale possible?

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#2109564 17-Oct-2018 11:26

I wasn't the only one to leave NBR, btw. Duncan Bridgeman (now with me at the Herald), Hamish Coleman-Ross, Jenny Ruth and Karyn Scherer have all left in the past month or so.

@ChrisKeall | nzherald.co.nz/author/chris-keall/

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#2109568 17-Oct-2018 11:30

chriskeall:

I wasn't the only one to leave NBR, btw. Duncan Bridgeman (now with me at the Herald), Hamish Coleman-Ross, Jenny Ruth and Karyn Scherer have all left in the past month or so.

Is there a story in this, Chris?

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#2109569 17-Oct-2018 11:31

DS9: NBC Universal has just won the right to buy Sky UK, that being so, hopefully if they buy Sky NZ too, we'll have access to the technology that Sky UK is currently using and more importantly developing.

If you think a company that size is interested in the NZ market, for anything other than milking as much profit from it's existing infrastruture, and instead will invest to grow the market and supply new and better technology, I think you are mistaken.

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#2109576 17-Oct-2018 11:37

networkn:

DS9: NBC Universal has just won the right to buy Sky UK, that being so, hopefully if they buy Sky NZ too, we'll have access to the technology that Sky UK is currently using and more importantly developing.

If you think a company that size is interested in the NZ market, for anything other than milking as much profit from it's existing infrastruture, and instead will invest to grow the market and supply new and better technology, I think you are mistaken.

Would save millions by not buying the rugby rights, all those dividends flowing back to the US as Comcast sweats the assets into the ground.

BTW @DS9, why wouldnt you want Xfinity's X1 instead of SkyUK's technology?

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#2109593 17-Oct-2018 11:44

Yeah, though Sky would die much faster without Rugby.

Sky NZ are making movements into SVOD though not as quickly as people would like. I believe a buyout from an overseas company the size of NBC would stop that immediately, not speed it up.

If they abort their current plans, and even if they were VERY quick about it, moving to NBC's or Sky's SVOD offering, it would delay things by a couple of years minimum.

IE a really bad idea.

ockel

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#2109598 17-Oct-2018 11:47

chriskeall:

I wasn't the only one to leave NBR, btw. Duncan Bridgeman (now with me at the Herald), Hamish Coleman-Ross, Jenny Ruth and Karyn Scherer have all left in the past month or so.

Chris you've been a vocal critic of Sky over the years but pretty silent on the newspaper industry failing to embrace the disintermediation via the internet. Are you going to publish a blueprint for the newspaper industry? Paytv has a long way to go to catch up to the crumbling newspaper industry. The 5 steps that its got to take to stabilise profitability and, if possible, return to growth? As Duncan Grieve has found with the Spinoff and trying to bring it to television - people in glasshouses shouldnt throw stones.

Clearly if Stuff continues on its revenue path for this year it'll be almost EBITDA neutral and clearly cashflow negative. You're obviously a fan of paywall for print media and NZME has indicated its a late 2018 agenda item. Is this the industry saviour? GZ's discussion on NZH paywall makes for some pretty ugly reading. Is it diversification? Like StuffPix? Is it blurring the lines between print and television with [paid] news bulletins - and how do you combat the free sources of OneNewsNow and RNZ?

I cant wait to read your thoughts in the Herald. And yes, I'm still an NZH subscriber albeit the digital edition.

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ockel

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#2109603 17-Oct-2018 11:51

networkn:

Yeah, though Sky would die much faster without Rugby.

Sky NZ are making movements into SVOD though not as quickly as people would like. I believe a buyout from an overseas company the size of NBC would stop that immediately, not speed it up.

If they abort their current plans, and even if they were VERY quick about it, moving to NBC's or Sky's SVOD offering, it would delay things by a couple of years minimum.

IE a really bad idea.

But why would Comcast care about rate of the subscriber decline in NZ without the rugby? Something like only 30% of subscribers watch the rugby anyway based on audience numbers. Thats millions of cost savings on a company bought cheaply as you wind it down. Stop development and capital rollout, milk the cash dry, sweat the assets, sell the land and buildings.

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#2109608 17-Oct-2018 11:56

ockel:

networkn:

Yeah, though Sky would die much faster without Rugby.

Sky NZ are making movements into SVOD though not as quickly as people would like. I believe a buyout from an overseas company the size of NBC would stop that immediately, not speed it up.

If they abort their current plans, and even if they were VERY quick about it, moving to NBC's or Sky's SVOD offering, it would delay things by a couple of years minimum.

IE a really bad idea.

But why would Comcast care about rate of the subscriber decline in NZ without the rugby? Something like only 30% of subscribers watch the rugby anyway based on audience numbers. Thats millions of cost savings on a company bought cheaply as you wind it down. Stop development and capital rollout, milk the cash dry, sweat the assets, sell the land and buildings.

That 30% would disappear overnight IMO. I've got a contract but I would fight VERY hard to get out of my contract if they dropped Rugby. I think they would care a lot about 30%. Maybe not so much 10%.

Plus those rights are already paid for, they could opt not to renew going forward, but I don't think they would do that.

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#2109609 17-Oct-2018 11:56

Entire Subscriber Revenue for Sky would be a rounding error for NBC.

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#2109613 17-Oct-2018 12:02

networkn:

Entire Subscriber Revenue for Sky would be a rounding error for NBC.

My gut feeling is that is this were to happen SkyTV would ape Dick Smiths progress post buyout. The demise of Sky TV would accelerate.

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#2109632 17-Oct-2018 12:27

chriskeall:

NBC Universal is already active in NZ via its Bravo partnership with Sky TV and various content deals. We are tiny in the great Comcast scheme of things, of course, but loom larger on the radar of NBC Universal Australia-NZ, run by Chris Taylor (ex Prime TV boss)

Bravo yikes, now that does not fill me with confidence.

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#2109635 17-Oct-2018 12:29

NBC Universal is already active in NZ via its Bravo partnership with Sky TV and various content deals. We are tiny in the great Comcast scheme of things, of course, but loom larger on the radar of NBC Universal Australia-NZ, run by Chris Taylor (ex Prime TV boss)

@ChrisKeall | nzherald.co.nz/author/chris-keall/

ockel

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#2109659 17-Oct-2018 12:45

networkn:

ockel:

networkn:

Yeah, though Sky would die much faster without Rugby.

Sky NZ are making movements into SVOD though not as quickly as people would like. I believe a buyout from an overseas company the size of NBC would stop that immediately, not speed it up.

If they abort their current plans, and even if they were VERY quick about it, moving to NBC's or Sky's SVOD offering, it would delay things by a couple of years minimum.

IE a really bad idea.

But why would Comcast care about rate of the subscriber decline in NZ without the rugby? Something like only 30% of subscribers watch the rugby anyway based on audience numbers. Thats millions of cost savings on a company bought cheaply as you wind it down. Stop development and capital rollout, milk the cash dry, sweat the assets, sell the land and buildings.

That 30% would disappear overnight IMO. I've got a contract but I would fight VERY hard to get out of my contract if they dropped Rugby. I think they would care a lot about 30%. Maybe not so much 10%.

Plus those rights are already paid for, they could opt not to renew going forward, but I don't think they would do that.

It wont walk away from existing commitments but why renew? No love lost by the public if Sky lose the rugby - as long as they get it elsewhere. Comcast saves a rumoured $50-60m per annum (pre renewal) and has a smaller subscriber base 2/3 the size of existing - assuming you're right (IMHO I think you overestimate the importance of rugby).

Say Comcast bid 30% over VWAP, thats say $1.1bn. Two years of free cashflow of $150m before SANZAR expires. How many years of freecashflow of a no rugby Sky before Comcast are creaming it? It'd be geared to have no NZ tax to pay, have minimal capital expenditure requirements.

We'd lose a NZ company paying NZ tax and interest with all the cash flowing to the US. But who'd care? I'd doubt there'd be any tears.

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#2109665 17-Oct-2018 12:54

Problem is, there isn't really a suitable alternative provider for Rugby. Sky provide all the infrastructure, truck rolls for everything Secondary Schools First XV to test Rugby in NZ.

Even if Comcast sold the gear and stuff to Spark, it's not like they are a media company the same way. The quality and quantity of coverage in NZ would drop, along with the funding they get from Sky.

Never say never, but I just don't see it being particularly attractive in the short to medium term for Comcast, and I have almost zero doubt it would be bad for NZ/Sky Customers.

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#2110472 18-Oct-2018 13:11

it be better if foxtel in australia buy sky.

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