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882 posts

Ultimate Geek


  # 2335238 10-Oct-2019 21:24
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A side note: it will now be real interesting when they play at Sky Stadium...

149 posts

Master Geek


  # 2335241 10-Oct-2019 21:47
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outdoorsnz:

 

empacher48:

 

tdgeek:

 

empacher48:

 

This is great. I know a mad cricket fan who can’t use Spark sport because their home internet isn’t up to scratch, however the only way they get TV is via satellite. They don’t have Netflix, Lightbox or any streaming service, but rely on sky to be able to watch anything decent on TV. There is no cellphone reception at this place and they managed to ADSL at 256kb/s about 3 years ago.

 

I guess if Sky does collapse, there is going to be a proportion of NZers who are going to be left behind when it comes to entertainment.

 

 

True, same as if Sky had all sport, not everyone can afford it, 900,000 dont have it

 

 

But for those that don’t have it, it is their choice not to have it. They have the choice whether or not to pay for it.

 

These people I’m talking about have no choice anymore. They can’t whistle up the hundreds of thousands of dollars to run a fibre line to their place, nor will they ever have rural broadband anywhere close to where they need it.

 

So what will their options be when Sky goes?

 

 

That is an unfortunate side effect of moving forward with new tech. Wonder if they will do a sky commercial channel deal?

 

 

How ironic! 20 odd years ago, moving forward with new tech finally brought affordable good quality TV to rural communities. Now, the same thing means taking it away from us!


 
 
 
 


507 posts

Ultimate Geek


  # 2335242 10-Oct-2019 21:51
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The rugby i found an interesting test for Spark, outside of those capable of fiber speeds, it was never really going to happen.  Now, with the cricket, and being summer and with people away, in beach houses/caravans or motor homes, where those services are limited or not available.  I wonder what the uptake will be....

 

For myself and family, where it once was available, we will simply not be buying into it.  even on a 4G connection, with the population swell, we are reduced to 3G or even GPRS and that's not sustainable.

 

likewise to those at residential addresses outside of the fiber scope for 5/10+ years, and being mostly older will just not bother with it.

 

Agree, they have a right and business opportunity, competition is healthy.  But if your offering is limited, maybe a commercial agreement could be reached between the two parties?


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Uber Geek

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  # 2335249 10-Oct-2019 22:30
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hsvhel:

 

The rugby i found an interesting test for Spark, outside of those capable of fiber speeds, it was never really going to happen.  Now, with the cricket, and being summer and with people away, in beach houses/caravans or motor homes, where those services are limited or not available.  I wonder what the uptake will be....

 

For myself and family, where it once was available, we will simply not be buying into it.  even on a 4G connection, with the population swell, we are reduced to 3G or even GPRS and that's not sustainable.

 

likewise to those at residential addresses outside of the fiber scope for 5/10+ years, and being mostly older will just not bother with it.

 

Agree, they have a right and business opportunity, competition is healthy.  But if your offering is limited, maybe a commercial agreement could be reached between the two parties?

 

 

More people missed out with Sky. Now less people miss out. Maybe Spark can work something out. Sky never did, now its Sparks fault?  


9 posts

Wannabe Geek


  # 2335269 11-Oct-2019 00:28
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SheriffNZ:

 

bagheera:

 

sen8or:

 

Is satellite broadband still a thing? I remember in the early days of broadband, our work had some sort of radio thing set up to receive our internet. Speed was pretty good at the time, it may or may not be better now?

 

My boss has 4g broadband through Spark as fibre hasn't yet been installed to his area. Downside is no unlimited internet with 4g, but that is not so much a limitation of the technology, more a limitation by the provider. Has this replaced satelite option?

 

 

 

 

 

 

yep, there is and for $200 for unlimited data, that really moots the raaaaa I can not get unlimited internet out in the whoop whoops https://getgravity.nz/rural-broadband-plans/

 

 

 

 

Perhaps the option for Spark is to provide unlimited downloads for spark sport data for those on it's metered plans. 

 

 

 

 

There is a plan here with what Spark is doing. One of the best use cases of none-standalone 5G is mobile broadband, not just an incremental increase in speed but the ability to provide unlimited data. They have said from the get go that this is what they are aiming to do with their initial 5g deployments. Once this is up and running unlimited mobile broadband will be a reality. Also they can zero rate any data used for sporting event IF they chose to do so.  If one of the major downsides to SparkSport expansion is lack of availability to rural NZ, this deployment might be their answer. It will take a bit of time to get it all up and running however but it seems like a plan is put in place. 

 

Also take note that the SparkSport Platform itself is 4K ready. If they wanted to, they could launch the RWC in 4k but you can see why with the media coverage and user issues on the whole why this might not be a good idea, also they have to  optimize apps to work on its current configuration first considering the sheer number of devices they support is quite extensive.  there is a lot going on in the background to adjust adaptive bit-rate algorithms and overall app improvements to all devices supported as we go forward with RWC. Also note, the current broadcast is 1080p 50fps (some refer to 60fps I presume because 50/60fps is considered high frame rate).

 

Streaming is internet based. Data based, having a company with a broadband/mobile network is the ideal scenario in the same way a works Mercedes works better with them instead of a Williams.

 

This however is going to take time but better late than never.

 

Sky's old CEO and his old ways really put the new CEO in a very difficult position. There business model wasn't viable long term. It will be interesting to see if they can recover from this, but they have the right man for the job as he helped a company in the UK turn around who were also in a similar position. Just wonder if its too little too late


Overarching undertones
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Uber Geek

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  # 2335278 11-Oct-2019 04:32
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tdgeek:

 

surfisup1000:

 

tdgeek:

 

Market cap? Whats that got to do with it? As long as they are making money they are, well, making money. Going into a real loss (not paper loss) is another issue. I believe subscription losses have reduced. If Sky continues to lose subscribers then that tails off, they may settle with, pick a number, 640,000. subscribers and that stays flat. And if they are still in the black, thats their baseline plateau.

 

 

Think of market capitalisation like net worth.... the more money and assets and diversification one has to their name, generally the greater resilience one has to financial risk and economic shocks.  

 

You make the assumption that sky subscriber numbers will stabilise where return on investment still makes sky a good investment. Ask Blockbuster Video when their membership will stabilise....the subscriber floor is close to 0. 

 

If sky spends 180 million (half it's capitalisation) on sports, but subscribers keep falling, then sky goes bust because they cannot repay debt and shareholder value goes directly to 0. 

 

If spark spends 180 million (1/45th it's capitalisation)  on sports, and it fails, then net profit is down for a year and things are back to normal the next. Spark provides a diverse range of products so a single loss making venture becomes an accounting entry as opposed to business collapse. 

 

 

1. Market cap is the valuation of the shares. Its not Sky's money, it's the shareholders money.

 

2. The stabilisation was my theory, I didn't say it has or will, just to show that IF the subscribers stabilised while they are in the black, they are not teetering.

 

Sky wont go bust as they cannot repay debt, they go bust as they run at a loss. A loss is fine, not every year though. Shareholder value, is the shareholders problem. Sky do not have to pay that back. Sky is not obligated to pay it back. I dont follow this line of thought. Skys value is low, the profit is there but dropping. Prospects are low. Sparks share price is high, and if SS failed thats a lot more than a rounding error. Sparks revenue is huge, the bottom line is a much smaller number, a SS loss would matter. 

 

 

 

 

I don’t think it’s true that “Sky wont go bust as they cannot repay debt, they go bust as they run at a loss. A loss is fine, not every year though.”

 

If you cannot repay debt, you’re on a slippery slope to going bust.

 

Sky’s primary funding arrangement is a revolving credit bank facility of $200 million from a syndicate of banks  - BNZ, Commonwealth Bank of Australia and Westpac. It’s interesting that ANZ dropped out between 2018 and 2019.

 

The syndicated loan agreement will contain a number of financial covenants which require Sky to exceed agreed minimum financial ratios such as gearing (debt/equity) and interest cover (trading profit/total interest cost).

 

It’s true the share price and market cap have nothing to do with these calculations  - but if they make a trading loss, even in one year,  and breach any covenants (or even have a trend heading towards a breach of covenants) the banks will become very interested. It could get to the point where Sky could only continue trading “with the cooperation of its bankers”.

 

So it’s also not really true that “A loss is fine, not every year though.”

 

Apart from that, as mentioned above, the directors may need to watch their backs regarding trading while insolvent. And the auditors will be watching whether Sky can continue to receive an unqualified audit report each year if the viability of the business is in doubt. Without a clean audit report, the banks will not support them.

 

It’s my guess that the banks and the auditors are already watching this very closely.


1380 posts

Uber Geek


  # 2335280 11-Oct-2019 06:05
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sen8or:

 

Is satellite broadband still a thing? I remember in the early days of broadband, our work had some sort of radio thing set up to receive our internet. Speed was pretty good at the time, it may or may not be better now?

 

My boss has 4g broadband through Spark as fibre hasn't yet been installed to his area. Downside is no unlimited internet with 4g, but that is not so much a limitation of the technology, more a limitation by the provider. Has this replaced satelite option?

 

 

 

 

There is a new option going up soon called Kacific with beams specially targetting the NZ market

 

 


 
 
 
 


1380 posts

Uber Geek


  # 2335281 11-Oct-2019 06:10
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tdgeek:

 

Given the TVNZ is a partner, and they do TV, it must have been suggested for TVNZ to setup a PayTV service. Applicable to those who are not in a VDSL/FIbre area. A need for validation means its too late to be next week, but is there a way to deliver an encrypted service to a TV? Without too much hassle, so that TVNZ can pass it through a box to the TV?

 

 

Worldnet on channel 250 on Freeview UHF ? an iptv delivery. Not sure if its still active ?

 

 


1380 posts

Uber Geek


  # 2335282 11-Oct-2019 06:16
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Time is ripe now for the Foxtel / SKY NZ buyout takeover.

 

 

 

 


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Uber Geek

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  # 2335333 11-Oct-2019 07:22
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eracode:

 

 

 

I don’t think it’s true that “Sky wont go bust as they cannot repay debt, they go bust as they run at a loss. A loss is fine, not every year though.”

 

If you cannot repay debt, you’re on a slippery slope to going bust.

 

Sky’s primary funding arrangement is a revolving credit bank facility of $200 million from a syndicate of banks  - BNZ, Commonwealth Bank of Australia and Westpac. It’s interesting that ANZ dropped out between 2018 and 2019.

 

The syndicated loan agreement will contain a number of financial covenants which require Sky to exceed agreed minimum financial ratios such as gearing (debt/equity) and interest cover (trading profit/total interest cost).

 

It’s true the share price and market cap have nothing to do with these calculations  - but if they make a trading loss, even in one year,  and breach any covenants (or even have a trend heading towards a breach of covenants) the banks will become very interested. It could get to the point where Sky could only continue trading “with the cooperation of its bankers”.

 

So it’s also not really true that “A loss is fine, not every year though.”

 

Apart from that, as mentioned above, the directors may need to watch their backs regarding trading while insolvent. And the auditors will be watching whether Sky can continue to receive an unqualified audit report each year if the viability of the business is in doubt. Without a clean audit report, the banks will not support them.

 

It’s my guess that the banks and the auditors are already watching this very closely.

 

 

I was going to reword my post, as it sounds as though debt is not important. It is important. But so is PAYE payments, GST payments, rights payments, creditors payments. Sky makes money every year, so real asset value each year increases, cash increases. They dont have hundreds of millions of plant and infrastructure that needs capex every now and then as a retailer or manufacturer would, its a cashflow business. While they are in the black, its safe as houses. The issue is, that I put forward, is: When subscribers stop leaking will they still be in the black? If so, they are not teetering, which was the initial point.

 

If they trade while insolvent the directors will end up in court. I think you would find that if they keep sliding they will keep reducing the size of the business, so that they stay in the black. They may end up being Sport only. If that doesnt work, they will shut down, sell assets pay debt, distribute the residue to the shareholders


818 posts

Ultimate Geek


  # 2335349 11-Oct-2019 08:27
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Sky will have some strong banking covenants in place to do with equity, working capital, debt payment calculations and likely a few other things. With equity plummeting like a rock, this will place pressure on cashflow and their ability to raise working capital. Shares going down will make it nigh on impossible for them to raise funds in the equity markets (stock exchange), whilst there are some investors that may bank on buying a sinking ship to turn it around, there would have to be other positive indicators for them to gain comfort in the investment.

 

How is subscriber growth? How is return per subscriber? What are the long term trends in the business? What are the trends in the wider industry?

 

None of these are particularly pretty so even trying to appeal to the investor with a bit of a risk appetite is tricky.

 

If they can't raise cash in the equity markets, then they have to try and raise debt. If creditors / financiers already have a larger stake in the company than the owners / shareholders do, this makes lending a particularly risky prospect and the same questions about subscribers and long term trends become even more pertinent.

 

Businesses do not go broke solely due to lack of profit, they go broke due to lack of cashflow, whilst the two are often linked, its not always the case. I'd dare say if they miss even one debt repayment then the banks would be in there pretty much immediately.

 

 


18094 posts

Uber Geek

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  # 2335363 11-Oct-2019 08:54
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sen8or:

 

Sky will have some strong banking covenants in place to do with equity, working capital, debt payment calculations and likely a few other things. With equity plummeting like a rock, this will place pressure on cashflow and their ability to raise working capital. Shares going down will make it nigh on impossible for them to raise funds in the equity markets (stock exchange), whilst there are some investors that may bank on buying a sinking ship to turn it around, there would have to be other positive indicators for them to gain comfort in the investment.

 

How is subscriber growth? How is return per subscriber? What are the long term trends in the business? What are the trends in the wider industry?

 

None of these are particularly pretty so even trying to appeal to the investor with a bit of a risk appetite is tricky.

 

If they can't raise cash in the equity markets, then they have to try and raise debt. If creditors / financiers already have a larger stake in the company than the owners / shareholders do, this makes lending a particularly risky prospect and the same questions about subscribers and long term trends become even more pertinent.

 

Businesses do not go broke solely due to lack of profit, they go broke due to lack of cashflow, whilst the two are often linked, its not always the case. I'd dare say if they miss even one debt repayment then the banks would be in there pretty much immediately.

 

 

 

 

How is equity plummeting like as rock? They make a profit every year, so equity, i.e. the net assets will be increasing

 

Why do they need to raise working capital? They are adding to it daily, while this cashflow business is in the black. They are not expanding, so the level of debtors and creditors is unchanged. Not being a manufacturer they dont buy stock so need extra WC for that. Not being an expanding brick and mortar retailer they have no need for extar WC to cater for that expansion, stocks, etc

 

Why do they need to raise cash in the equity markets? If anything, as they reduce the size of the busines they will do share buybacks

 

Why do they need to raise debt? I dont see any need to borrow

 

Cashflow is more important than profit we all know that and why. That can happen as a business expands, requires more WC, more staff, more costs, and the resultant sales do not line up. Sky is not in that position. They are reducing sales, and they are pro active in reducing costs, they run a low number of shares which is where they need to be

 

Every year I read Sky is falling like a stone


466 posts

Ultimate Geek


  # 2335364 11-Oct-2019 08:56
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At least the glitching should be better as the players barely move in Cricket 🤡


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Uber Geek

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  # 2335371 11-Oct-2019 09:11
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@tdgeek Quote: “How is equity plummeting like as rock?”

 

This looks somewhat plummety:

 



 

 


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Uber Geek

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  # 2335374 11-Oct-2019 09:14
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Apsattv:

 

Time is ripe now for the Foxtel / SKY NZ buyout takeover.

 

 

Yes, good call. Foxtel does Kayo?  Takeover. or better yet, a large minority shareholding, circa 49.5% Cheap as.

 

The only issue I see is rights issues getting Kayo content here? F1 etc, what Spark has. Even so, if they took over, a full or majority shareholding, they can strip Sky NZ out, and use Kayo instead, a lot of admin can go to AUS


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