Comcast: Scale Was Big Motivator To Buy “Mispriced” Sky

tephan Goerlich/imageBROKER/Shutterstock

Scale was the big motivator for Comcast to acquire Sky as Brian Roberts and Jeremy Darroch laid out for the first time the ways in which the two companies can work together “to make each other even better”.

Comcast CEO and Chairman Roberts and Sky CEO Darroch were speaking on the second half of Comcast’s earnings call, which was dedicated to its $40B takeover of the European pay-TV giant.

Roberts called Sky an “incredible” and “sensational” business and laid out that the ways in which the two firms will work together, particularly around technology, innovation, new products and content. “Scale is a big motivator for years and years to come,” he said. “We’ll triple the footprint, innovation, purchasing, relationships, new products, where the world may head, that’s what is so exciting, we’ve always thought scale mattered.”

Roberts added that he believed that Sky was “mispriced”, even after paying 10% more than what rival Disney/21st Century Fox was willing to pay. “You never know exactly how securities are priced and what the motivating factors are but I do think it was mispriced, whether that’s because for five years it’s been in a variety of M&A flux, because a large shareholder, because there was regulatory uncertainty. There’s also been a change in the market, in terms of sports right and competitiveness and new business opportunities that are just about to emerge,” he said. “These are super desirable assets when put together with a company like Comcast and the fit makes us stronger. As a standalone, it supports the values and together it increases the value. Time will tell.”

Darroch gave a crash course on Sky on the call and highlighted how the markets in Europe, particularly the UK, Germany and Italy were different to the U.S. He pointed to the fact that Sky, which has 27M subscribers, including 23M direct customers in 7 markets, was not just an aggregator of content, but a creator. He highlighted shows such as Gomorrah in Italy and Das Boot in Germany.

He outlined its plans to grow its pay-as-you-go service Now TV as well as Sky Q as well as digital terrestrial television in Italy as well as plans to open up in new territories with its satellite-less service and also lauded Sky Store, Sky Media, Sky AdSmart and Sky Vision.

This article was printed from