Broadcast Battle Heats Up With Comcast's $31M Sky Buyout Bid
Zacks Investment Research | Apr 25, 2018 09:29PM ET
The broadcast war is not only intensifying but also becoming increasingly complicated. Making the scenario more complex, Comcast Corporation (NASDAQ:CMCSA) , on Wednesday, made a $31-billion offer to take over Sky plc (OTC:SKYAY) , which raises the specter for a potential bidding war between Twenty-First Century Fox, Inc. (NASDAQ:FOXA) and the cable television giant. Fox had earlier offered $16.5 billion to take over the remaining assets of Sky.
Understandably, every broadcaster is trying to increase its international presence with acquisitions, to stay ahead in the race. In fact, The Walt Disney Company (NYSE:DIS) in Dec 2017 cut a $52.4-billion deal to acquire Fox’s television and film studios, FX Networks, National Geographic and other cable assets.
It goes without saying that broadcasters are trying to make their international presence stronger given the stiff competition they are facing from streaming giants like Amazon.com, Inc. (NASDAQ:AMZN) and Netflix, Inc. (NASDAQ:NFLX) , which are fast invading their space and changing the entire ballgame. As the bidding war starts, it now needs to be seen, which players finally gets bigger share of the pie.
Comcast Gears Up for Global Presence
Comcast has graduated from a cable television giant to a diversified media company. Its recent $31-billion bid to take over Sky proves that the company now plans to expand and make its international presence felt. In fact, in late February, Comcast had expressed its desire to take over the assets of Sky, which Fox is eyeing as well. Interestingly, Fox holds a 39% stake in Sky and had made a $16.5-billion offer to buy the remaining stake in the company in 2016.
Understandably, this will only result in a potential bidding war between the two companies. Sky is a lucrative property given its 23-million strong subscriber foothold in Europe. And taking over such a prized company will only add to Comcast’s broadcasting, comprising NBCUniversal, which has an eclectic mix of news, entertainment and sports content.
Moreover, Sky, which holds the rights of British Premiere League in the U.K., extended the U.S. television rights to NBCSports through 2022 in February. Naturally, a deal with Sky will help Comcast get broader access to the international market. Sky plc has a Zacks Rank #1 (Strong Buy). You can see Zacks Investment Research
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