SKT - Sky Network Television

[mistaTea]

While I am not certain of this I think it is a good point to consider. NZR will probably be pretty cautious about any potential provider change given rugby is starting to struggle at a grassroots level with the popularity of soccer/football taking off.

Yes, they will naturally use any competitor threats to squeeze as much money out of Sky as they can (I certainly would!).

But Sky have to be prepared to walk away. Otherwise NZR have them over a barrel every 5 years.

Sky and NZR are key to eachothers survival, and I just hope Sky have learned lessons from the last negotiations.

If NZR ditched Sky for a streamer it would be game over for them. Their fanbase would plummet even further.

They know this.

[Mysterion]

If NZR ditched Sky for a streamer it would be game over for them. Their fanbase would plummet even further.
They know this.

Most likely outcome is WarnerDiscovery either buys Sky outright or they become a cornerstone investor and take a 25% stake (ie like the Martin 2018 deal). This will likely happen after the new box is released AND rolled out, AND at a date closer to the next NZRU rights renewal.

This is the best outcome for shareholders and customers.

[mistaTea]

Most likely outcome is WarnerDiscovery either buys Sky outright or they become a cornerstone investor and take a 25% stake (ie like the Martin 2018 deal). This will likely happen after the new box is released AND rolled out, AND at a date closer to the next NZRU rights renewal.

This is the best outcome for shareholders and customers.

Best outcome is outright takoever.

JV/Cornerstone investor....not sure about that. It would guarantee Sky access to their content ongoing (at mates rates) but might constrain Sky's future options. So the lift in SP from such a deal might not be as much as you expect. Hard to say.

[Mysterion]

JV/Cornerstone investor....not sure about that.

The only downside is you won't get dem gainz!

[Mysterion]

Sky Values - Jul 18, 2022

[Mysterion]

Quick Bro - get your application in!!

[Mysterion]

Cringe*

[Mysterion]

AUT 2021 research Media report

This version already 6 months old but every year they release a media report which is pretty interesting and good recap.

https://thedailyblog.co.nz/wp-content/uploads/2021/12/JMAD-NZ-Media-Ownership-Report-2021.pdf

[Mysterion]

If you read that report the Mediaworks Sky merger isn't as crazy as everyone here seems.

Mediaworks is an OK business. The problem is their debt. Growth isn't good but market does appear stable post covid.

There are synergies there.

It's probably not a bad option unless a takeover is coming.

Do shareholders really want a cash return? What you going to do with the money?

[Mysterion]

I think why the Mediaworks merger failed is that institutional investors like John from Osmium Partner and Peter from Blackcrane are under the impression that Sky is returning to revenue growth (via streaming, the new set top box, and broadband) and that this will deliver sustained high yielding dividends because Sky is also continuing to reduce costs.

These investors, in my opinion, were hoping to sell their stock once this happens and book a profit as these investors are likely value/opportunistic investors. These investors may not want to participate in another placement or go through another growth/investment phase (like buying Mediaworks) or wait any longer for returns. In other words, it kind of deviates from their original investment thesis, which is to buy stressed or undervalued asset, wait for the turn around story to eventuate, then sell shares after 3-5 years. They perhaps felt that Mediaworks was a distraction from this plan and they had enough influence to convince management to terminate the merger.

What they don't know is that Sky is likely (in my opinion) getting desperate and looking for ways to grow revenue, as streaming and broadband is underperforming and the new set top box has been delayed, while at the same time increased costs has caught management by surprise. With their "turn around" story in jeopardy they are looking for an alternative or they want to change things so much that the narrative changes. For example, buy another business to grow top line revenue and then restructure and consolidate to increase earnings by reducing costs - then rinse then repeat.

I feel that both Osmium Partner and Blackcrane are looking to sell to "Canadian Pension funds" or off load to other yield seeking passive investors - ie investors wanting a dividend every 6 months and a safe investment. Problem is that interest rates are rising globally so these funds can invest cash and get interest returns elsewhere more easily and this is making investing in Sky for yield not as attractive as before and harder for value/opportunistic investors to offload Sky shares for a profit.

Results next month will paint the picture and reveal all.

(the above is my opinion, names of people mentioned above are fictional characters, words written are for purely entertainment and comedy purposes only)

[Mysterion]

Let me put it this way.

ASB and ANZ are offering 4.5% term deposit rates



In a few months time it's likely term deposit rates will be 5%

To invest in Sky you would expect at least 10% dividend to justify the risk. Which is what, like $40m per year?

Where is revenue growth going to come from when satellite is still churning every year? That puts a lot of pressure on Neon/SSN and broadband to perform. Are people expecting the new set top box will increase satellite subs or significantly drive revenue?

Netflix results were today, the streaming market is under pressure and growth forecast going forward has been reset. Sky is gambling that House of Dragon will perform well enough to offset the price increases of Neon.

Overall, I think Sky would have to do very well to just maintain current revenue levels while also find more ways to reduce costs, all this to sustain the status quo of moderate dividends.

The only good thing to look out for is the cash return. If you take that away the investment scenario just craters.

[Mysterion]

What is this?

[mistaTea]

What is this?

Spark Sport Freebie is what they are calling the deal being worked on with Sky.

Sky take their content contractual obligations off their hands and they gift their app as a 'freebie'

[mistaTea]

Cringe*

Second viewing was less cringe than when I saw it live.

Jeff Wilson's 'acting' is still just downright awful...

But maybe the fire plumes were ok if you were in the stadium.

[Mysterion]

Spark Sport Freebie is what they are calling the deal being worked on with Sky.

Sky take their content contractual obligations off their hands and they gift their app as a 'freebie'

Have found the answer bro!

https://help.kayosports.com.au/s/article/What-is-Kayo-Freebies

They're copying Kayo Sports which is the Austrian sports streaming service owned by Foxtel.

I don't think Spark Sport is dead yet. Looks like they're happy to just pick up inexpensive rights and have the service as a bolt on still. As long as costs are low they are happy to keep the service and use it for promotions etc.

https://tvtonight.com.au/2021/01/kayo-to-offer-free-streaming-events.html
"Kayo Freebies is another game-changing moment. We believe Kayo Freebies will increase our audience share for selected events, expand audiences for growing sports and ultimately take Kayo's subscription growth to the next level.