SKT - Sky Network Television

[Mysterion]

If Silverlake/WorldRugby/NZRU takes control of RugbyPass they could possibly use it as streaming PPV platform to stream future rugby games and compete with Sky Sport Now.

The deal might involve Sky retaining domestic streaming rights for a certain period and then perhaps a co-agreement with streaming and terrestrial TV.

It's likely in the future you will use the new Sky box to purchase Rugby Games, Sky would then get a small percentage of the revenue but then again they won't have to stump up the huge cost for securing exclusive content.

In other words, it seems like Sky fend of one competitor (Spark Sport), and then another competitor/issue pops up (Silverlake).

[Plata]

Competition will always be a game of whack a mole, I'm not convinced spark will totally throw in the towel but they might as well once the cricket lapses. I'm more afraid of one of the mega corps like apple or amazon starting a global sports streaming service than Silverlake. on another note, when does bowman come up for reelection/dismissal 

[Mysterion]

Competition will always be a game of whack a mole, I'm not convinced spark will totally throw in the towel but they might as well once the cricket lapses. I'm more afraid of one of the mega corps like apple or amazon starting a global sports streaming service than Silverlake. on another note, when does bowman come up for reelection/dismissal 

Ultimately Sky will lose the "streaming battle". They don't have the capital needed to invest and support this part of the business anymore. They also don't have the competitive edge or moat.

"Mega corps" will continue to close in on this ground an edge out Sky over the long term.

We need to wait for the details of the deal but I think what they mean when they said the deal "involves RugbyPass", is that the deal really involves a restructure and renegotiation of the streaming rights. Particularly in the long term when the new box rolls out and the next NZRU renewal. 

I think it's likely you will see some sort of co-arrangement where all games will be on Sky but also available through RugbyPass as well, of which Sky will no longer be the owner of.

Sky will be able to maintain the same "price" as the deal will be cheap for them, in other words they won't need to raise the price like they had to do with Neon.

Customers can choose their preferred platform. Sky or RugbyPass. Better for fans as content is available at more than one vendor. Cheaper for Sky too.

It's really just another cost cutting initiative by Sky and a cleaver way for them to stay relevant. But it just kicks the can down the road again.

Good news is that the old Sky box and satellite will still be around in 10 years and likely for a lot of customers this will still be the preferred medium to watch content on.

[Plata]

It's really just another cost cutting initiative by Sky and a cleaver way for them to stay relevant. But it just kicks the can down the road again.

Good news is that the old Sky box and satellite will still be around in 10 years and likely for a lot of customers this will still be the preferred medium to watch content on.

That is probably the best outcome sky can ask for long term. I think it is pretty clear that sky is never going to be a growth company. That can is full of money. As long as that can keeps getting kicked, keeps rolling along, it will leave a trail of cash in its wake.

We just need to make sure the board understands this, and stops empire building with other peoples money.

[Mysterion]

That is probably the best outcome sky can ask for long term. I think it is pretty clear that sky is never going to be a growth company. That can is full of money. As long as that can keeps getting kicked, keeps rolling along, it will leave a trail of cash in its wake.

This is what investors are trying to figure out right now and why it's so hard to put a value on Sky.

Sky has large amount of revenue coming in the door and will likely for a few more years to come.

But investing in this stock for a dividend just seems risky to me with so many unknowns.

You need to be able to sell your investment to get the capital back at the end. To me it seems like the dividends will only get you your money back at the end, so it's just a pointless investment.

That's why a takeover now seems the best way forward. And for those investors holding a large amount of stock it could be a nice and quick pay day (and therefore great investment)!

[mistaTea]

I am interested to see what this WR deal is, but more interested to see if 'something else' has been cooking in the background that explains the delay in buyback/capital return.

They are always looking at negotiating one lot of content rights or another (I think Sky have something like 500+ contracts) so the fact they are in discussions with WR about a new, wider deal does not explain/justify the lack of capital return. Even if they were being ultra conservative, you would expect a $30M buyback program to have been announced well before now.

The only thing that logocally makes sense is that they are not returning capital because some kind of M&A is being worked on. Whether that be someone taking a look at Sky, or Sky looking to buy something else (like Spark Sport) is another question.

Management and The Board have screwed the pooch big time in recent months, and it gives shareholders little faith other than to believe that the lack of capital return to date is due to incompetence and/or selfish motives.

However, it could also be that they are working on a M&A deal that really will be value-accretive to shareholders. And, of course, I would love to be wrong on this (and have it turn out that SM and the team have been rocking it for shareholders all along).

At this junction, my expectations are still low.

[Mysterion]

I am interested to see what this WR deal is, but more interested to see if 'something else' has been cooking in the background that explains the delay in buyback/capital return.

They are always looking at negotiating one lot of content rights or another (I think Sky have something like 500+ contracts) so the fact they are in discussions with WR about a new, wider deal does not explain/justify the lack of capital return. Even if they were being ultra conservative, you would expect a $30M buyback program to have been announced well before now.

The only thing that logocally makes sense is that they are not returning capital because some kind of M&A is being worked on. Whether that be someone taking a look at Sky, or Sky looking to buy something else (like Spark Sport) is another question.

Management and The Board have screwed the pooch big time in recent months, and it gives shareholders little faith other than to believe that the lack of capital return to date is due to incompetence and/or selfish motives.

However, it could also be that they are working on a M&A deal that really will be value-accretive to shareholders. And, of course, I would love to be wrong on this (and have it turn out that SM and the team have been rocking it for shareholders all along).

At this junction, my expectations are still low.

There was never a capital return, only a capital plan.

It was delayed because of MediaWorks, and as I said before I still believe this is on the table. Hence more delay.

I expect a $20-30M buyback and a standard dividend (spread out over the year). I think that's all shareholders can expect next month when results come out. The remaining cash is needed for the business.

There's always M&A in the background but we know private equity only makes low ball offers. Management would rather keep their jobs than sell out.

Maybe WarnerDiscovery will make an offer but they would probably want Foxtel too and maybe it makes more sense to buy that first. Hence more waiting.

Something interesting might not happen until 2023 when rugby rights come up agian. This current deal will likely set the tone going forward. That's probably why they've delayed the capital plan announcement until this is sorted.

I also have this gut feeling that maybe something vary material is about to happen with the rugby rights and hence that's why Sky pivoted towards Mediaworks (ie a different vertical/side business). Why still don't know what Silverlake are up to. They are scheming on something, I can smell it!!

[Mysterion]

stuff.co.nz comment



Sums up Spark Sport over the last few years.

Also shows that having ease of use is important to customers. Not all about price and streaming etc.

[mistaTea]

They are scheming on something, I can smell it!!

According to the NBR, WD was not involved in a formal bid.

Which means that Spark was not involved in a formal bid either (they require a FTA partner, whereas Sky can go it alone as they have Prime).

Now why would that be?

My money is on Spark actively looking for an exit to sport...and Sky TV are the exit plan (just like we were when they bailed out of Lightbox).

And this would explain the ongoing delay in capital management decisions.

Taking over the rights from Spark Sport will eat into the cash pile for sure, but then it would probably be viewed positively by the market overall as (1) Sky become the only sheriff in town again and (2) it shows that it is not actually that easy to enter sport streaming in NZ, even if you are a big company with deep pockets.

[Plata]

Lets hope its a cut price deal and doesn't involve a few hundred million dollars of good will being written off like last time sky bought a streaming service.

[Mysterion]

According to the NBR, WD was not involved in a formal bid.

Which means that Spark was not involved in a formal bid either (they require a FTA partner, whereas Sky can go it alone as they have Prime).

Now why would that be?

My money is on Spark actively looking for an exit to sport...and Sky TV are the exit plan (just like we were when they bailed out of Lightbox).

And this would explain the ongoing delay in capital management decisions.

Taking over the rights from Spark Sport will eat into the cash pile for sure, but then it would probably be viewed positively by the market overall as (1) Sky become the only sheriff in town again and (2) it shows that it is not actually that easy to enter sport streaming in NZ, even if you are a big company with deep pockets.

Spark Sport is dead but Sky won't be able to buy it, even though it makes sense and would benefit customers.

ComCom is just fill of too many whinny bureaucrats!.

It took 6 months to sell OSB

Don't you remember reading all those complaints by those grumpy unknown submitters!

[Mysterion]

And this would explain the ongoing delay in capital management decisions.

Capital management decisions have been delayed because of the global chip shortage

[mistaTea]

Spark Sport is dead but Sky won't be able to buy it, even though it makes sense and would benefit customers.

ComCom is just fill of too many whinny bureaucrats!.

It took 6 months to sell OSB

Don't you remember reading all those complaints by those grumpy unknown submitters!

It will get past Comcom.

The existence of Spark sport has actually caused prices for consumers to INCREASE!

Best thing for consumers is sky consolidating the services.

And who is going to object to the deal? Seriously.

2D customers benefit as they will get more content on SSN.

[Mysterion]

It will get past Comcom.

The existence of Spark sport has actually caused prices for consumers to INCREASE!

Best thing for consumers is sky consolidating the services.

And who is going to object to the deal? Seriously.

2D customers benefit as they will get more content on SSN.

The public will moan and the liberal media will go nuts!

But most of all LionsClub will write another nasty letter...



Seriously tho, it's probably not even worth buying unless they give it away like Lightbox. There might be some competition this time, like DNAZ.

[Mysterion]

I think the chair should retire at the next AGM.

Like
946463 people like this.