×
You will be redirected back to your article in seconds

What Does Sky Look Like With Comcast at the Controls? (Analysis)

With its takeover of highly successful pay-TV service Sky now almost assured, Comcast is not expected to do anything to upset its new golden goose. But a change in culture seems inevitable, and possibly in management.

Comcast sees enough to like in Sky to shell out $40 billion and is expected to retain much of the team that has built the business. It would also be a PR misstep to make wholesale changes. “It wouldn’t be a good look if they have taken over one of the biggest TV companies in Europe and take out the European management,” said Tim Westcott, director of research and analysis at IHS Markit.

A key question, however, is whether CEO Jeremy Darroch will stay on. A longtime Sky exec, Darroch is credited with keeping the company profitable and cutting-edge in a fast-changing media landscape, and with shepherding it through its protracted sale, which culminated in an auction last Saturday. “Darroch has said he has been overseeing this process for the last few years, and that maybe indicates questions about his replacement have begun as well,” said Guy Bisson of Ampere Analysis. “It wouldn’t be unexpected if he moved on.”

Whether he stays or goes, Darroch is set to pocket tens of millions of pounds when the deal closes.

As for other execs and staff, analysts agree that some job losses at Sky are likely, to eliminate duplication within Comcast, but that the overlap is limited. In terms of program sales, there is some overlap between Sky Vision, which is growing under Jane Millichip, and NBCUniversal’s international distribution arm, which Belinda Menendez oversees. Both Sky and Comcast also operate a swath of pay-TV channels.

As part of the Comcast family, Sky is expected to capitalize on programming and tech cooperation with its new parent, which will seek to keep it on its current course.

Sky has accelerated its push into original drama and inked a $250 million co-production pact with HBO. (Premium HBO shows such as “Game of Thrones” and “Westworld” go out on the Sky Atlantic channel.) Post-takeover, Sky will also have NBCUniversal as a stablemate, which should open the door to new content partnerships.

Content deals were already possible with 21st Century Fox as Sky’s main shareholder (a 39% stake), but with competition growing from Netflix and other digital behemoths, there is increased impetus to scale up and join forces on content. “NBCUniversal could come in and pre-buy U.S. rights, or deficit-finance high-end Sky productions,’” Westcott said.

“There’s a pretty big content overlap that presumably they will want to make work harder for them,” added Ed Barton, chief entertainment analyst at Ovum. “They could look at licensing content on a combined basis, which would lower the cost on a per-subscriber basis, if you have something you can show to a European and U.S. audience.”

Besides providing content-hungry networks with programming, combining production firepower could serve a greater purpose. “It would mean Sky and Comcast have a bigger library of original content. If they were going to roll out direct-to-consumer services in other countries, that would certainly help,” Westcott said.

Sky currently boasts 23 million subscribers in the U.K., Ireland, Germany, Austria and Italy. The U.K. pay-TV market is mature, and while Germany and Italy offer room to grow, Sky is expected to expand geographically, which would further boost Comcast’s international footprint.

Sky has already launched over-the-top services in Spain and Switzerland using the same model as it employed with its Now TV streaming service in the U.K. “Where Sky has moved into new territories, it doesn’t have a lot of local content,” Westcott said. “NBCUniversal doesn’t have a lot of local content, but it does have an enormous amount of content and channels. You can see that’s another way Sky could develop with support from Comcast.”

The Comcast-Sky dynamic also differs from Fox-Sky in that the new partners are both ostensibly pay-TV platforms offering broadband, telephony and other services. There is a cultural affinity and they speak the same language in terms of tech, and that could usher in cooperation across areas such as addressable ad services and advanced set tops.

More Biz

  • Pete Frates, who is stricken with

    Pete Frates, Inspiration for The Ice Bucket Challenge, Dies at 34

    Pete Frates, the inspiration behind 2014’s wildly successful ALS movement, the Ice Bucket Challenge, died on Monday. He was 34.  The historic Ice Bucket campaign raised over $115 million to combat ALS, or Lou Gehrig’s disease, which Frates also suffered from.  “Pete never complained about his illness,” his family said in a statement.  “Instead, he [...]

  • CBS HEADQUARTERS

    ViacomCBS Will Explore Sale of Black Rock CBS Headquarters

    ViacomCBS will explore the sale of the famous Black Rock building, which has served as the headquarters of CBS since the mid 1960s. Bob Bakish, CEO of the company, which was created last week from the merger of CBS Corp. and Viacom Inc., said the newly combined entertainment conglomerate would explore the sale of sundry [...]

  • The recipients of the 42nd Annual

    Heartfelt Tributes Trump Politics at Kennedy Center Honors

    WASHINGTON, D.C. — Political chatter was kept to a minimum Sunday night as the Kennedy Center Honors presented elaborate tributes to “Sesame Street” — made more poignant by the death of legendary puppeteer Caroll Spinney earlier in the day — as well as Sally Field, Linda Ronstadt, Earth, Wind and Fire and conductor Michael Tilson [...]

  • Chris Cornell’s Widow Sues Soundgarden

    Chris Cornell’s Widow Sues Soundgarden Over Royalties, Unreleased Recordings

    A long-simmering battle between Chris Cornell’s widow and the other members of Soundgarden broke into the open Monday morning when Vicky Cornell announced that she is suing the group over hundreds of thousands of dollars in allegedly unpaid royalties and the rights to seven unreleased recordings made before the singer’s death in May of 2017. [...]

  • Stephen Colbert Julia Louis-Dreyfus

    Julia Louis-Dreyfus Talks 'Seinfeld,' 'Sexist' Environment at 'SNL' in Q&A With Stephen Colbert

    Stephen Colbert and Julia Louis-Dreyfus swapped stories about “Saturday Night Live,” Northwestern University, “Seinfeld” and the possibility of running for office during a Q&A held Saturday as part of Montclair Film Festival’s annual “Evening with Stephen Colbert” fundraiser. Colbert, a Montclair resident, has long been a booster of the festival, which is going into its [...]

  • 2019 Kennedy Center Honoree singer Linda

    Linda Ronstadt to Mike Pompeo: Stop 'Enabling' Donald Trump

    WASHINGTON, D.C. — Linda Ronstadt, one of this year’s Kennedy Center Honorees, had sharp words for Secretary of State Mike Pompeo on Saturday night during a State Department reception for the Kennedy Center kudos. Ronstadt and Pompeo faced off in the U.S. State Department’s ornate diplomatic greeting rooms at the traditional event that precedes Sunday’s [...]

  • pharrell brain child show

    'Blurred Lines' Flares Up Again - Marvin Gaye Family Claims Pharrell Perjured Himself

    Like a zombie that just won’t stay dead, the “Blurred Lines” case keeps coming back. While the 2015 verdict, in which Pharrell Williams, Robin Thicke and the song’s publisher were ordered to pay nearly $5 million to Marvin Gaye’s family for infringing upon the late singer’s 1977 hit “Got to Give It Up,” was basically [...]

More From Our Brands

Access exclusive content