SKT - Sky Network Television

[Mysterion]

2.26



Seriously, this needs to be taken over ASAP!

[mistaTea]

2.26



Seriously, this needs to be taken over ASAP!

$450M + cash and it's a deal.

[Mysterion]

$450M + cash and it's a deal.

I reckon there's less than $100m of actual free disposable cash given the need for further "organic investments" to sustain earnings and to secure the increased cost of programming content over the short to medium term.

At today's closing price, I put the theoretical EV at about $300m.

A 30% premium would be nearing $400m, which I think is a fair offer.

I believe the "tone" over the last few months has changed significantly. With the rising cost of living there has likely been a serious deterioration to streaming growth, satellite churn rates, defaults/accounts overdue, inflation cost pressures, customer service problems, broadband failing, etc all impacting future earnings. I suspect the board have recently been made aware of all these issues and this is why they have done a u-turn on their original plan to acquire assets (Mediaworks) to now looking at a PE exit as the best way (or only way) to return value to shareholders.

It seemed before that Sky were "pushing away" offers and refusing to engage PE, as the board likely believed that the turn around story was going to eventuate. It now seems like the board have done a "180" and are likely asking PE to make an offer and are inviting parties to engage (hence the AFR article a month or so ago). The question is, will PE make a decent offer after looking at the "new numbers/outlook and new information over the last few months, or will this spook them off?

At the end of the day, everything has a "price". And I think $400m for the "Sky business" is fair and reasonable and the best way for long suffering shareholders to unlock value, especially those with large holdings.

A deal will likely take 6 months to close. By the time shareholders get money it will likely be March next year and by then the broader market could rally more, thus reducing the overall value. Maybe a decent chuck of cash will be unlocked in September or maybe there will be most costs.

In any case, it isn't a complete disaster and for those who averaged down or got in over the last few year it could well of been a decent outcome. PE should be able to unlock value and merge with business with another media asset before offloading it to one of the US based majors for a significant profit. Retail investors are really just mugs and pawns who take all the risk for little gain and all the pain of waiting for any bit of gainz.

I'm tempted to have another gamble here and get back in for another roll of the dice, because I do actually believe a takeover is imminent. I know I've been saying all this BS since mid 2020 but this time does seem different as the tables have turned so quickly and the outlook changed so much. The only difference this time is I believe there's a zero chance of a bidding war and hence little upside to a big takeover offer. It seems like it's just going to be a small 30% premium or an offer that matches the 52 week high. If another parties does enter it's unlikely the first party would raise their offer. I just can't be arsed waiting around 6-9 months to get money back or going through all the mental aguish for a tiny gain. Especially when the broader market is rallying and there are good opportunities elsewhere.

I hope MT you can get out of this dog and make a little bit of cash for all your effort and commitment over the years. Just buy land bro. That's the only investment that guarantees dem gainz over the long term. Everything else is just a scam, and you can't make money unless you're the scammer.

[mistaTea]

https://www.nzx.com/announcements/396146

Still stalling on capital management announcement.

[Mysterion]

https://www.nzx.com/announcements/396146

Still stalling on capital management announcement.

I can only see two reasons for this.

1) They want to save the good news (capital return) to coincide with the bad news (negative forward guidance & increased costs)

2) A takeover is coming so what's the point in releasing a capital plan now.

[mistaTea]

I can only see two reasons for this.

1) They want to save the good news (capital return) to coincide with the bad news (negative forward guidance & increased costs)

2) A takeover is coming so what's the point in releasing a capital plan now.

Of those two options, 2) is more likely.

If they have negative forward guidance (and I don't think they do, it's all going back to content aggregation now and Sky is sitting pretty in that space...) then I would expect them to have already announced the buyback well and truly by now so that it would have begun by the FY results and they could brag about the capital return etc.

Once you announce a buyback, there are various hoops they have to jump through that take time. It's not like you announce the buyback and then they start buying shares that day.

So if they announce a buyback on August 25 you would be lucky if they actually started buying shares by November. Not exactly a great plan to wow and amaze shareholders as you speculate in 1).

MW deal was canned 6 weeks ago. In that announcement (16 June) they said that they had been working on a capital return plan in parallel to the MW deal.

So that means they have been looking at their options for months by now is it? Months to establish that they should a do a buyback?

Come on. Tell me how that makes any sense.

They have been talking about capital management since the HY results in Feb. I get why they didn't do a buyback before as they were eyeing up MW and needed the cash. But they reckon they were still considering CR options this whole time, and now it has been 6 weeks since their 'Big Deal' got canned and still nothing?

Something is either cooking behind the scenes (and they are hoping to be able to announce a deal before the FY results) or these guys are more incompetent that I could have imagined.

I am much more inclided to think it is the prior, not the latter. I might disagree with some of the stuff they have done recently, but they are not idiots.

[Cod]

I can only see two reasons for this.

1) They want to save the good news (capital return) to coincide with the bad news (negative forward guidance & increased costs)

2) A takeover is coming so what's the point in releasing a capital plan now.

My guess is 2, they were looking at MW and KKR purchase at the same time, unusual but not unprecedented, only one of those proposals were binned, the buyout was never confirmed or denied by SKT.

[Plata]

Search interest for neon not looking too shabby. Anyone made any guesses as to what guidance for next year will be?

[Mysterion]

Comcast Results



https://www.cmcsa.com/static-files/9e0ed99c-00ca-4da0-b53c-fdb29c8ab1b0

https://www.cmcsa.com/static-files/805285e2-0674-42ad-9729-80f432a168eb

https://www.cmcsa.com/static-files/b8b7161b-c072-4ac4-b03a-cb2673dfcb9f

[Mysterion]

Peacock TV is being rolled out globally.

Already confirmed to launch in Australia. Apparently Comcast are in discussion with Foxtel about this. Either partnership or they will pull their content (or maybe takeover??).

PeacockTV.co.nz domain was registered in April by agency who protects trademarks. Domain will likely redirect to global site. Similar to when you type in disneyplus.co.nz and it redirects to disneyplus.com/en-nz

Peacock trademarks registered in NZ.

Point is that it seems likely that Comcast will eventually roll out Peacock in NZ. They have a partership with Viacom so they have decent content. So, will comcast partner with Sky NZ and launch Peacock or roll out the platform along side Neon?? And will Warner pull their content from Neon and try and go separate too?

Seems a hell of a lot easier to just buy Sky NZ and bolt that onto the UK platform and snare another 800k customer relationships

[Mysterion]

Both Comcast and WarnerBros Discovery stock down recently.

Both are carrying a sh*t ton of debt but both seem to pay dividends and do buybacks with the amount of cashflow that they churn out!

When it comes to the Australian and NZ market it seems like these larger players favour partnerships over takeovers. How long they can keep doing these partnerships for remains to be seen

It also seems that what ever happens in Australia will likely happen in NZ. If Comcast decides to partner with Foxtel and roll out Peacock along side Binge then it seems logical that the same would happen with Sky NZ and peacock will either be delayed or just joined on to Neon.

Does seem strange that Foxtel canceled their IPO and Sky NZ is sitting on cash and looking for mergers/capital management plans etc. Would be nice if Comcast picked up both Foxtel and Sky NZ and merger the two and then rolled out Peacock as part of the long term strategy. But maybe Comcast just has too much debt, same wit WBD, so both want to just do parterships and keep things simple and share the profits, as both markets are relativity small in size so not worth the effort/investment. Who knows, remains to be seen.

[mistaTea]

One of the issues (for Global Streamers) that we have discussed in the past is how each new entrant has a difficult time attracting a critical mass of subscriptions. People will only navigate so many services at a time before it gets too cumbersome.

Another issue to consider is how devastating streaming has been on their Balance Sheets. The big studios now have to produce more content for less return to try to keep people subscribed to their OTT service. Before they went to war with NETFLIX, and primarly used content aggregators like SNT to distribute and market their product they did not have to produce nearly as much content (as multiple content producers distributed their content via aggregators, each producer would get a healthy slice of the revenue without having to create a number of 'hit shows' every month or two).

It is no surprise at all that the likes of Comcast would prefer partnerships, because:

• Competing against other streamers AND aggregators that they have a good relationship with is a losers game
• Forking out hundreds of millions of dollars to buy an aggregator is not necessary. The partnership model works well - they get a strong revenue stream without having to own legacy hardware and sofware
• There is also some risk that local authorities may block takeover deals anyway. So it could be a lot of effort for nothing

With regards to SNT...I started trying to give these guys the benefit of the doubt (again! Just can't help myself) that there is a very good reason for delaying any capital return announcements. The only 'good reason' I could think of is that they are working on something in the background (M&A).

But on reflection, I actually don't think they are doing anything at all. We don't have long to find out anyway, and there will be some sort of payout to shareholders. It will be positively received by the market I am sure (though I wouldn't expect a massive bump in SP either as CR/divvy should already be largely priced in I would have thought).

Just over 3 weeks to go and then SM will have her opportunity to 'wow' and amaze us with their plan, and all my rantings and ravings will be for naught I am sure! Ha!

[Mysterion]

One of the issues (for Global Streamers) that we have discussed in the past is how it is difficult for each new entrant has a difficult time attracting a critical mass of subscriptions. People will only navigate so many services at a time before it gets too cumbersome.

Another issue to consider is how devastating streaming has been on their Balance Sheets. The big studios now have to produce more content for less return to try to keep people subscribed to their OTT service. Before they went to war with NETFLIX, and primarly used content aggregators like SNT to distribute and market their product they did not have to produce nearly as much content (as multiple content producers distributed their content via aggregators, each producer would get a healthy slice of the revenue without having to create a number of 'hit shows' every month or two).

It is no surprise at all that the likes of Comcast would prefer partnerships, because:

• Competing against other streamers AND aggregators that they have a good relationship with is a losers game
• Forking out hundreds of millions of dollars to buy an aggregator is not necessary. The partnership model works well - they get a strong revenue stream without having to own legacy hardware and sofware
• There is also some risk that local authorities may block takeover deals anyway. So it could be a lot of effort for nothing

With regards to SNT...I started trying to give these guys the benefit of the doubt (again! Just can't help myself) that there is a very good reason for delaying any capital return announcements. The only 'good reason' I could think of is that they are working on something in the background (M&A).

But on reflection, I actually don't think they are doing anything at all. We don't have long to find out anyway, and there will be some sort of payout to shareholders. It will be positively received by the market I am sure (though I wouldn't expect a massive bump in SP either as CR/divvy should already be largely priced in I would have thought).

Just over 3 weeks to go and then SM will have her opportunity to 'wow' and amaze us with their plan, and all my rantings and ravings will be for naught I am sure! Ha!

If nothing does happen I wonder if the CEO buys more shares the day after when trading window opens again.

[Mysterion]

Having said that, it's been almost a year since any insiders bought any stock on market!

[Mysterion]

DISNEY+ to be made available on Foxtel set top boxes

https://tvblackbox.com.au/page/2022/08/02/disney-to-be-made-available-on-foxtel-set-top-boxes/

Foxtel now becoming a "streaming aggregator"

Seems likely Disney+ will be available on new Sky box as well.