Sky’s bumper full-year results this week were most likely its last before it gets bought by one of two U.S. media giants: Comcast or Disney-Fox. The numbers showed why both bidders have pushed out the boat to win control of Europe’s pay-TV leader, which Comcast’s Brian Roberts calls a “great business” and Disney’s Bob Iger calls a “crown jewel.”
Whichever side prevails, the resulting groups would have striking similarities and differences, and massive scale. One area where Sky’s new owner will have enormous strength is TV channels: Sky brings a raft of its own sports and entertainment channels, including the Sky Atlantic service, which has output deals with HBO and Showtime; it also has a joint venture with Disney-backed A+E for channels including History.
Add Sky’s channels to the nets from Fox Networks Group Europe and Africa, including Fox and Nat Geo, and Disney’s roster of pay-TV channels, and a Disney-Fox-Sky tie-up would encompass many of the major global channel brands. (Disney and Fox shareholders approved their own merger Friday.)
Comcast runs a big channels group through its NBCUniversal International Networks, including the likes of Universal, Syfy, and E!, and together with Sky would form a big European channels player. NBCUniversal also has a London-based content sales business, and an overall catalogue of more than 4,000 movies and 100,000 episodes of TV.
A combined Disney-Fox-Sky would bring together multiple content sales businesses as well: Sky Vision; FNGCD, which sells Nat Geo and other cable shows; 20th Century Fox TV Distribution, which sells big-ticket U.S. series; and Disney Media Distribution, which covers ABC and other U.S. shows and Marvel, Pixar, and Lucasfilm pictures. Fox also owns half of Endemol Shine, but is currently looking to sell.
On the production side, Sky – which has dived into original drama – will find itself allied with a production powerhouse, regardless of whether it’s owned by Comcast or by Disney-Fox.
Comcast-NBCUniversal has been an acquirer and backer of international production companies, including Working Title’s TV division and Carnival (“Downton Abbey”). Disney and Fox haven’t bought up producers in the same way, but FNG and ABC are now in the early stages of making scripted series internationally. Disney’s kids and family output from the international markets is also ramping up.
In film, Disney, Fox and Universal are all major operators, while Sky is seeking to disrupt the traditional windowing process by moving into movie production, releasing titles on its platform day and date with their theatrical release.
Sky’s would-be new owners have both committed to funding Sky News and to keeping Sky’s vast and expanding campus in Osterley, on London’s western outskirts. NBCUniversal occupies a large space in Central London (Comcast has only a small technology office), while Fox occupies offices in Soho and Hammersmith in West London, and Disney is also in Hammersmith.
And both bidders are set to make major streaming plays internationally. Disney is expected to launch its service next year, and already operates Disney Life, which has family series and movies. FNG has been launching authenticated streaming services for Fox and Nat Geo. And Comcast’s NBCUniversal has a streamer, Hayu, which is programmed with reality TV, in the U.K., Canada, and the Nordics.
Sky would bring to the streaming mix its low-cost Now TV in the U.K. and OTT services in Spain and Switzerland, with more to follow. It’s also launching its hi-tech Sky Q service over the top, meaning a top-of-the-line Sky package not delivered by satellite.
Simon Murray, principal analyst at London-based Digital TV Research, notes that Fox already has a working relationship with Sky, as Fox owns a 39% stake in the pay-TV service, and there are execs who have worked for both companies. But he adds that Comcast may provide the easier partner, because its core business is as a traditional pay-TV platform operator.
“On balance, I think Comcast might be a better fit because of that, although Disney has its subscription pay-TV service on the horizon,” Murray said. “Whoever takes over will probably look to make cost savings pretty rapidly.”
He agrees that Sky under U.S. ownership would be a huge international player, but that might not be the end of it. “Maybe there are more mergers in the offing,” he said.
Selected Assets and International Operations
Key networks: Sky One, Sky News, Sky Arts, Sky Atlantic, Sky Sports, Sky Movies
A+E Networks U.K.: channels joint venture: History, Lifetime, Crime + Investigation
Sky Vision (distribution, production)
Now TV (streaming service)
Disney Media Distribution
Networks: Disney Channel, Disney Jr., Disney XD
Disney Life (streaming service in U.K. and Ireland)
ABC Studios International
Fox Networks Group Europe and Africa: 154 channels, 25 regional offices
Fox Networks Group Content Distribution
20th Century Fox Television Distribution
20th Century Fox U.K. (movies)
Endemol Shine Group (production, distribution, owned with Apollo)
Comcast Technology Solutions
NBCUniversal International Television Distribution
Universal Networks International
NBCUniversal International Studios
Universal Pictures International
Hayu (streaming service)