![\"Comcast\"](\"https:\/\/mybroadband.co.za\/news\/wp-content\/uploads\/2018\/09\/Comcast.png\")
<\/a><\/p>\nEver since Netflix Inc.\u2019s meteoric rise jump-started the online-TV revolution, media executives have debated how to respond.<\/p>\n
Is it better to own must-see programming or the pipes that deliver it to millions of homes? Should they remain focused on the lucrative but shrinking U.S. TV market, or expand overseas where the business still has room to grow?<\/p>\n
The answer, according Comcast Corp. Chief Executive Officer Brian Roberts, is do both. On Saturday, his company offered about $40 billion for Sky in a knockout bid, topping rival suitor 21st Century Fox Inc. in an auction for the European TV giant.<\/p>\n
As the winner in a fierce bidding war, Comcast is poised to almost double its customers. The acquisition would also help Comcast further hedge its bets in a fast-changing business, believing the key to competing with Netflix is to straddle both sides of the business and the Atlantic Ocean.<\/p>\n
It\u2019s a costly wager — and one that may not go over well with investors. Already, Comcast shares have slid this year, rattled by a failed deal to acquire Fox\u2019s entertainment assets and now a seemingly successful campaign to acquire Sky.<\/p>\n
\u201cThis acquisition will allow us to quickly, efficiently and meaningfully increase our customer base,\u201d Roberts, 59, said in a statement. With no antitrust issues looming, he aims to complete the acquisition of Sky by the end of next month.<\/p>\n
But Roberts\u2019s deal victory remains clouded. For one, Fox could refuse to tender the 39 percent of Sky that it currently owns. That would leave Comcast sharing the company with Fox, which is slated to become part of Walt Disney Co. next year.<\/p>\n
The debt Comcast will take on to complete the deal isn\u2019t a concern but the price tag is a worry, said Craig Moffett, an analyst with MoffettNathanson LLC. The bidding war between Disney and Comcast pushed Sky\u2019s valuation from eight times earnings before interest, taxes, depreciation and amortization to 15 times, he said.<\/p>\n
\u201cIt\u2019s going to be incredibly hard to justify having paid such a high price,\u201d Moffett said on Sunday. \u201cThis is an asset that neither Disney nor Comcast investors wanted to win.\u201d<\/p>\n
Since taking over NBCUniversal seven years ago, Comcast has owned both content and distribution. That\u2019s helped reduce its risk. Though the company has been hurt by cord cutting — with thousands of cable-TV customers dropping their subscriptions — many of Netflix converts still need Comcast\u2019s internet connections. And Comcast\u2019s NBC generates lucrative fees by selling old episodes of shows to Netflix, Hulu LLC and others.<\/p>\n
Sky is essentially Comcast\u2019s European twin and buying the company is a massive bet that combining two similar businesses could fuel Comcast\u2019s financial prospects for years to come.<\/p>\n
Comcast, based in Philadelphia, will now deliver TV service to about 52 million customers in both the U.S. and European countries — including the U.K., Italy and Germany. Comcast currently gets 9 percent of revenue from outside the U.S. After owning Sky, that number will jump to roughly 25 percent.<\/p>\n
\u201cThis became a critical asset for Comcast,\u201d said Paul Sweeney, an analyst at Bloomberg Intelligence. \u201cIt\u2019s a very bold price.\u201d<\/p>\n
Sky also has technology. Sky\u2019s pay-TV service has a slick interface called the Q box — a counterpart to Comcast\u2019s X1 set-top box. And Sky has in-demand programming. While Comcast owns the broadcast network NBC, home of NBC News, \u201cThis Is Us,\u201d the Olympics and National Football League games, Sky has a large news division and exclusive deals with HBO and Premiere League soccer matches.<\/p>\n
\u201cWe see that this company is very much akin to the businesses we know well here,\u201d Comcast Chief Financial Officer Mike Cavanagh said at a conference earlier this year.<\/p>\n
Sky was the final prize in a drawn-out battle between Comcast and Disney for the bulk of Rupert Murdoch\u2019s media empire. Disney fended off Comcast\u2019s attempt to buy the entertainment assets by securing a deal for $71 billion. Now, Comcast is poised to take control of Sky and transform a cable company founded 55 years ago by Ralph Roberts in Tupelo, Mississippi, into an entertainment behemoth on two continents.<\/p>\n
Comcast executives have talked about the potential of selling Sky\u2019s content in the U.S. and NBC\u2019s programming in Europe, as well as creating original TV shows together. Comcast estimates that owning Sky will create $500 million in synergies and generate enough cash flow to reduce its debt in a timeline that won\u2019t hurt its credit rating.<\/p>\n
Some analysts, however, viewed Comcast\u2019s interest in Sky and Fox as a sign that Comcast didn\u2019t like the future prospects of the U.S. cable business and wanted to diversify. Others questioned why Comcast wants what is mostly a satellite-TV business — a technology that\u2019s becoming outdated as consumers get entertainment over the internet.<\/p>\n
Comcast\u2019s stock is down more than 5 percent this year, partly due to investor concerns that it would overpay for Sky.<\/p>\n
But Sky executives aren\u2019t luddites. They have an online-TV service that could offer lessons to Comcast, which is still weighing how it wants to get into streaming video. And Roberts has tried to dispel the idea that he doesn\u2019t like Comcast\u2019s core business of selling TV and internet service. He just likes it even better on two continents.<\/p>\n
Ever since Netflix Inc.\u2019s meteoric rise jump-started the online-TV revolution, media executives have debated how to respond.<\/p>\n","protected":false},"author":341034,"featured_media":272195,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[24],"tags":[1343,2054],"class_list":["post-277045","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-broadcasting","tag-comcast","tag-netflix"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/277045"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=277045"}],"version-history":[{"count":1,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/277045\/revisions"}],"predecessor-version":[{"id":277049,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/277045\/revisions\/277049"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/272195"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=277045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=277045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=277045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a><\/p>\nNow read:\u00a0Logitech launches K600 TV Keyboard<\/a><\/h3>\n","protected":false},"excerpt":{"rendered":"