Write up in the Herald about Foxtel.
https://www.nzherald.co.nz/business/...ectid=12476212
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Write up in the Herald about Foxtel.
https://www.nzherald.co.nz/business/...ectid=12476212
If Foxtel do IPO next year, it will be an important valuation benchmark for Sky I think.
They are aiming for north of 10x operating cash flows based on pitching Foxtel as a growth business. All growth coming from streaming.
If that holds true, then even if the Market didn’t see the same upside potential for SNT…I think you should still rationally expect an operating cash flow multiple of 6-7. That alone would be a valuation of $600M-$700M based on the low point earnings expected in FY22.
And if Sky succeed in their turnaround (and we are following the exact same strategy as Foxtel, only about 6-12 months behind…) then we can expect a higher multiple of higher operating cash flows.
Or yeah, we could all short cut the whole thing with some kind of a deal.
Let’s say Foxtel have an EV of $3.65B to keep numbers simple. They have $650M debt. So their quoted value is $3B.
Let’s say Sky get the low end valuation of $600M. But we will have ~$100M in the bank after the property sale and no debt. So EV of $700M.
You create more shares in Sky (easier to do now that we only have ~175M s/o) so that Foxtel own 77% of the new entity and existing SNT holders have 23%.
I think a split like that would be fair to all, and both would stand to realise significant upside as the new business is better positioned to reduce costs and flex muscles in important content rights negotiations.
Yes, the two businesses are literally identical in every single way.
And both have content deals with the same studios.
It is the most ‘obvious’ option, if a deal is to be made.
A combined entity would produce revenue north of $4B within a year or so.
EBITDA would be around $450M, implying underlying Owner Earnings of $250M+.
That’s when Spark throw in the towel for the third time.
https://amp-smh-com-au.cdn.ampprojec...30-p58w6m.html
They even use the same ‘capital lite’ terminology that we are using.
Clearly we talk to these guys a lot and we stole that term from them.
Still no update to the property listing in respect to studio one.
Odd to think they havnt after saying level 4 and ppl not being able to inspect the site was reason for delay.
Interesting excerpt from the 2008 Annual Letter...
See? We used to be good mates with Spark!Quote:
One of the more important partners has been Telecom New Zealand. SKY and Telecom have worked together for over 10 years to serve our mutual customers. The current arrangement has expired and we have mutually agreed to extend the arrangement on a month by month basis until either we are able to negotiate a new contract or terminate negotiations.
Though it looks like the wheels started falling off in 2008...