Fox Just Lost A $39 Billion Buy-Out To Comcast
Sky, a British broadcaster, has recently been bought out by the U.S. cable company Comcast in a multi-billion dollar auction.
Founded in the 1990’s by Rupert Murdoch, the company quickly became one of Europe’s leading in television. Sky owns the rights to broadcast soccer games by the English Premier League, which made them a valuable asset overseas. While Fox initially owned part of Sky, the entire company was something that 21st Century Fox wanted to acquire.
The bidding took place over three rounds, during which Comcast out-bid Fox by barely $2 per share. While this seems like a close win, the bigger numbers are far more intimidating. Comcast bid $3.6 billion more than Fox, which won them the company Sky in the auction.
Sky’s value goes beyond sports, however. According to an NPR report by Frank Langfitt, the company has a massive amount of viewers all over Europe. Twenty-three million people subscribe to Sky, which makes it one of the crown jewels of European entertainment.
“Comcast found Sky attractive because it provides a foothold in Europe and will make it less dependent on the United States,” Langfitt commented.
The New York Times reported a statement made by Comcast’s chief executive, Brian L. Roberts.
“This is a great day for Comcast. This acquisition will allow us to quickly, efficiently and meaningfully increase our customer base and expand internationally.”
Comcast topped 21st Century Fox in a weekend auction for Sky, ending a long takeover battle and promises Comcast a greatly expanded international footprint https://t.co/G5Pqo6YaLU
— The Wall Street Journal (@WSJ) September 23, 2018
Reports say that Comcast officials originally thought Fox was bluffing about their interest in Sky. However, this was proven untrue during the third round of bidding, when Disney/Fox upped their final bid. Fox bought 39 percent of Sky before being bought out by Disney, so Comcast had to make a substantially higher bid in order to win over the rest of Sky’s shareholders.
Both companies have a vested interest in expanding their reach, mostly to compete with online streaming services like Netflix, Hulu, and Amazon Prime. With Comcast now owning the majority of Sky, Disney is reportedly planning to sell their portion of Sky shares.
According to CNBC, expert analyst Paolo Pescatore commented on Comcast’s takeover of Sky, saying:
“There are significant growth opportunities in Europe. The combined entity will be a considerable force. Sky and its customers will benefit from being part of the wider group, access to more services, products and features, financial security to some extent to bid for key costly premium content rights — in particular sports which is arguably the company’s prized asset with the Premier League.”