Why has Comcast bid £30bn for Sky?
Traditional media companies are increasingly concerned about the threat from tech and streaming video companies such as Netflix. Sky is a very profitable business, with 23m customers across Europe and produces its own content. Opportunities to buy such a business are increasingly rare, helping to drive up the price to an extraordinary £30bn. There is also an element of revenge: Comcast lost out to Disney in the battle for the entertainment assets of Rupert Murdoch’s 21st Century Fox but has now outbid its rival, albeit at a high price.
What sort of business is Comcast?
Comcast is little known in the UK but is a major force in the US, where it owns a large cable TV and internet business. It creates its own content through NBCUniversal, which owns the NBC TV network and Universal Studios. However, the company has faced regulatory issues and was named “worst company in America” twice in recent years due to customer service issues.
What does this mean for Sky customers?
At the moment, absolutely nothing, as the deal will only be approved by Sky shareholders in October. Some analysts suggest subscription prices could rise to pay for the bid, but this could risk driving away customers. Sky is in good financial shape, paying less for football rights than it has in the past, and there is potential for other content to be shared across the wider Comcast group.
What happens to Sky News?
Sky News has been the subject of much discussion during the bidding – not least because politicians and journalists watch it and are often invited to appear on it. A complicated deal was proposed by the government earlier this year in the event that Fox – and inevitably Disney – won but this is no longer required. But there are questions about how the Sky purchase fits with Comcast-owned NBC’s investment in Euronews, the pan-European news broadcaster that is being relaunched and is set to come under the NBC banner.