Comcast's $31 Billion Bid for Sky Could Crush Rupert Murdoch's Dreams

26 April, 2018, 12:45 | Author: Lora Ball
  • Rupert Murdoch faces competition for Sky from Comcast. Jewel Samad  AFP

Comcast's potential disruption of Murdoch's plans comes almost seven years after the media mogul withdrew a previous bid for full control of Sky, an offer that was derailed by the phone-hacking scandal that resulted in the closure of his newspaper The News of the World.

Comcast pledged to maintain funding levels for Sky News for a decade and to safeguard its editorial independence.

"We are delighted to be formalizing our offer for Sky today". On Wednesday the $155 billion company said it had identified $300 million of annual pre-tax cost savings and a further $200 million of gains from combining Sky's TV shows and movies with Comcast's NBCUniversal library.

Comcast has said that adding Sky to its business would increase worldwide revenues to 25% from 9%.

As a result of the intrigue over Sky, Comcast and Fox/Disney could end up fierce competitors, partners, deal-makers - or all three.

Tulchan's Andrew Grant and Tom Murray are working the Comcast bid.

Fox, which already has a 39 percent stake in Sky, first announced its 10.75 pound per share cash offer in December 2016.

Twenty-First Century Fox, which already owns 39% of Sky, said it remained committed to its recommended cash offer for Sky announced in December 2016, and was now considering its options. The offer also establishes Comcast's intent to maintain Sky's United Kingdom headquarters at its Osterly campus. Sky shares jumped 3.5% in London to trade at £13.53 ($18.90).

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Comcast said it was in talks with Sky's Independent Committee "with a view to obtaining a future recommendation of the acquisition".

The Fox offer had faced hurdles previous year when the UK's Secretary of State for Culture, Media and Sport issued a European intervention notice, which asked United Kingdom media regulator Ofcom to report on two public interest considerations around the merger plans. Sky is arguably the most equivalent company to Comcast outside of the US.

Sky's shares raced 4% higher as Comcast's move raises the prospect of a bidding war.

Whether Sky goes for it is the next question.

"The rights may come with multibillion-pound price tags, but Sky has proven the Premier League deals are well worth the outlay". It will also establish a Sky News editorial board to ensure the channel's independence, keep the United Kingdom headquarters in Osterley for five years and not acquire any majority interest in British newspapers for five years.

"The independent committee also welcomes the post-offer undertakings and commitments Comcast intends to give in relation to Sky's existing business including Sky News, and believes that these voluntary commitments should comprehensively address any potential public interest concerns".

Comcast, which owns cable channels MSNBC and CNBC, has already said it believes its approach would escape concerns over media plurality because of its "minimal presence" in United Kingdom media.

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