As Comcast, Disney and Fox tussle for a slice of Sky, how is the media landscape likely to change?
Though always a changeable industry, the bombshells shaking the media sector over the past few months have captivated attention like never before.
As emerging digital players such as Netflix and Facebook continue to challenge traditional platforms, industry consolidation has become the name of the game for many established media companies. Scale to survive. But with the grandness of such epic mergers, comes controversy and obstacles. When AT&T Entertainment announced its intention to buy Time Warner, Donald Trump pledged to use Presidential powers to block the move [LINK]. When a scandal-hit 21st Century Fox bid to buy Sky outright, the question of whether the Murdochs were ‘fit and proper’ owners threatened to cripple the process [LINK]. And now Comcast, one of the world’s largest media & telecoms companies, has weighed into the fray for ownership of Sky, potentially scuppering Murdoch and complicating the planned merger between his 21st Century Fox and Disney [LINK].
Such developments have hit headlines and kept those in the media world gripped. If the latest bid by Comcast ($31 billion) proves to be definitive in the battle for Sky, how will the industry reshape itself?
For Comcast, a media titan that has surprisingly little revenue outside the US, the acquisition of Sky could prove to be a huge game-changer. Not only would it provide major revenue streams from new corners of the world, it would also provide scope for the company to explore much-needed OTT services of scale. Sky would also provide Comcast with an enviable war chest of high-calibre content (Riviera and Jamestown to name two) – highly desirable in the ongoing battle for subscribers.
For Sky, the merger could open up enviable investment opportunities into new content production – a boost for Sky’s existing subscribers. But the standards of its much-admired news entity could be put into jeopardy (similarly concerning in the Fox proposal). While Comcast has promised to keep Sky News’ “existing brand and culture”, it has been pushed to pledge at least 10 years of funding for the service [LINK].
Industry commentators have predicted that a counter offer from the Fox/Disney side is probable – Disney called Sky a “crown jewel”, and likely won’t be content to acquire Fox assets without it [LINK]. But assuming the Comcast deal goes through, we will see a US media giant entering the UK market in a big way, and a galvanised and royalty-laden Sky securing its status as a revered force on the world media stage.
Whatever way the Sky does fall, it will have a sizable impact to its acquirer. One thing is clear – for the global media sector, these are interesting times indeed.