very valid points thanks laser.
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I think part of the issue we have for Sky (in terms of SP) is this false narrative that Sky are faced with ever increasing programming costs.
The 'analysts' have drawn the conclusion that because there is more competition in the market, and the cost of individual rights have gone up in many cases that therefore the total spend on programming for Sky will have to go up by x% a year ad infinutum.
That is just not true at all. Each year Sky set a budget on how much programming costs will be. We had a lot of savings due to Covid recently, so the HY1 results had artificially low programming rights. From HY2 those costs will increase to normalised amounts.
Sky have a budget for a given year of around $350M max I believe on rights. Managements job is to secure as much premium entertainment and sport content that they can for that money. Once it is spent, no more content can be acquired.
As the cost of rights increase (from competitive forces) what happens is that Sky has to be more picky on what they acquire, keep and let go. So long as they can keep the most compelling content to ensure their bundles are attractive they are fine. There are hard choices they have to make, but fortunately they have a lot of viewership data to leverage in the decision making process.
We won rugby and had to pay more for that content. So something had to be let go...which turned out to be domestic cricket. But domestic cricket was less critical because we already had the international stuff.
We secured a new NRL deal, and that cost more...so to stay within budget we have had to let go of the UEFA tournament.
We are also doing co-exclusive deals where it makes sense to make savings so that we can still go after other content.
So the total amount that we are spending in content (largely dictated by projected revenue and anticipated operating costs + CAPEX needs) isn't actually changing that much. It is just that we are now unable to win everything and have to be much more deliberate in keeping the 'truly important' stuff. Having the soccer is great, but if only a small percentage of your base are staying up to watch the games then you will let it go if it means keeping the more popular NRL etc.
And this is why Sky is able to remain cashflow positive (in a big way) even though individual content contracts cost more.
Finally sussed the meaning of that gif ogg keeps posting when responding to me
Its Sophie's offsider slamming the door shut on another potential acquirer - WE ARE NOT FOR SALE AT ANY PRICE so piss off
So anyone want to estimate Sky’s cash balance at present? What would it be growing at every month on average as it continues to not pay dividends? Somewhere in the region of $5-$10 million per month?
It’s shame they decided to repay the $100 million in bonds back in March with cash instead of re-issuing debt. Could have repurchased half the company in less than 12 months with that cash + expected cashflow.
Analysts, investors shrug at Sky's corporate intrigue at investor day
https://www.nzherald.co.nz/business/...ectid=12454945
Paywalled
Chris Keall states "The Australian (news) threw around names of potential suitors like Discovery, NBCUniversal or the "logical" possibility of a telco (a possibility that probably doesn't appear as logical to Kiwi reader"
Chris has obviously not read the Sky thread
Well, if Bowman was hoping that Slide 80 would create a huge buzz with corresponding price action then it was a pretty epic fail.
But I don’t think that was the game plan. More a signal that Sky is open to suitors and please get in contact with Jarden if you want a piece of this action.
Sky did emphasis less free cash going forward as they 'invest for growth'. I'm certainly getting bombarded with adds for Sky broadband. I wonder how much is being spent marketing this new offering.
"Jarden analysts Arie Dekker and Luan Nguyen maintained an "under-weight" rating on the pay-tv provider after the briefing, though nudged their target price up from 18.0c to 19.0c."
Well if that's the case - 20c seems like the best we can hope for in a potential transaction?
Takeovers are often a 30-50% premium to the SP.
I think someone would pay 25c/share max to buy sky. Unless there was a bidding war.
25c/share would not be a great outcome for long term owners, unless it was part of a merger whereby they would have the opportunity to participate in any upside the new entity yields.
Chinese walls? Who takes them seriously?
Basically they’re selling the shares down to 14c then making a takeover offer at 18-19c, and everyone will be happy cause it’s 30%+ premium
Paramount+ arrives next month: https://businessdesk.co.nz/article/m...reaming-launch
NRL staying with Sky TV until 2027.
Very good news indeed.
The Chairman and CEO did not quite say that takeover offers were coming in, they alluded to perhaps, mergers, or joint ventures. Im sure Vocus was looking at SKY for a while.
Agree 100%.
And a merger with Vocus is the best thing for sky long term in my view.
Hopefully Jarden can help the board see the light.
If there is still an opportunity, the window is rapidly shrinking. Vocus NZ will go ahead with the IPO to get their $600M+ if they have to.
All explained here: http://nzx-prod-s7fsd7f98s.s3-websit...698/237127.pdf
Just substitute 'Vodafone' for 'Vocus', revise the financials and hey presto! We have a deal.
Business Case even stronger today than it was in 2016 given the changes we have seen.
Not sure about that, but it is fair to say that if our Board were enthusiastic about the idea they would have sorted out a deal by now. Especially since we have a very warm relationship with Vocus right now.
I see the combined businesses having synergies from cost savings, as well as being better positioned to grow broadband/mobile numbers significantly as they bundle STB and streaming solutions.
No way could these guys get a deal with Sky past the comcom. For one thing, Spark kicked up the biggest stink about Sky-Vodafone. And second, Spark is by far and away the most dominant telco in NZ...and they already have Spark Sport. Even if they guaranteed some sort of genuine wholesale offer to other businesses, I think the Comcom would grabble with it.
No desire to buy Sky. Happy with the wholesale arrangement and the new owners invest their capital in hard assets. They would be more likely to have a go at buying Vocus than Sky.
Have you taken your meds today Ogg?? ;)
As a wholesale arrangement sure. We are giving our margin away with the Disney+ deal, so zero earnings in the first year.
But Vocus are still making margin on every single Sky connection. A merged entity could absolutely make money growing the broadband base.
You mentioned Sky Mobile, but you forgot...Sky Energy!
Mega Bundles. Attractive Pricing. One convenient bill. A spiffy new STB thrown in for free.
JOIN SKY!
Off market trades have definitely dried up....
Sky doesn't need a deal with any telco. Sky has shifted to a data based model and looks to be using that data really well. I like where this is going. All this talk about a deal is not needed at all. In 2 - 3 years I'm picking Sky to be $2 per share... Or at least I hope :p
https://www.newsroom.co.nz/lockerroo...e-olympic-team
Either some virtue-signalling from Sky, or perhaps they had to sack all of the male Sky Sport staff for being sexual predators...
How is it strange? Sky make a lot of noises about being fantastic for women. A little embarrassing for Sky when it turns out Sky Sports is alleged to be full of male goons who treat their female colleagues like pieces of meat.
I think their announcement of this 'ground-breaking female cast' meets the definition of virtue signalling?
I never said that I think any of the chosen four are no good, or not up to snuff. I think Kirstie and Rikki would have been covering the Olympics anyway because they are very, very good.
https://www.nbr.co.nz/node/230822
TVNZ picked up the rights to the NBC content Sky passed on.
https://www.nbr.co.nz/node/230822
TVNZ picked up the rights to the NBC content Sky passed on.
How do you mean?
Sky signed with NBCUniversal in April for the content they want. All the new shows etc exclusive to Sky.
TVNZ have picked up the rest of the content NBCUniversal have that Sky didn’t want to buy (as their viewership data gives them a better insight into which shows are popular).
Great for TVNZ to ink a deal with these guys, but also good to see Sky being disciplined in which content they take and how much they pay for it.
Pig starring Nicholas Cage coming to cinemas in August.
All I will see is this share price going no where and Oggs Bichokas Cage sarcasm lol
Wonder if Neon will get to air it in the future lol lol
So what is the company(s) we should be comparing a successful Sky/Vocus and/or 2degrees merger with? Any obvious international examples? Locally all we have of course is Spark (mobile/broadband/sport).
Well, they need to do something big. The market does not rate them as a stand-alone content aggregator, regardless of maintaining significant FCF etc.
Because the market does not believe sky will exist in 5 years. Well, that’s how the business has been priced anyway.
Telcos much more popular. And I believe Sky could be a really good telco.
Well as a Sky shareholder, should sign up to neon. We will see how good it is. Netflix has a lot of foreign cheap content and old movies anyway. Except I liked Fauda immensely.
I had the 3 month trial with Neon and now I can't give it up because I re-watched Succession and now Billions in anticipation of the new series coming up. In terms of movies Neon p*sses all over Netflix. I can't believe how bad almost all Netflix produced movies are. Almost makes a case for the old school studio format of movie making.
How do you get three months free.
Skepticism about a Foxtel IPO.
https://www.afr.com/companies/media-...0210707-p587ig
Interestingly, the Foxtel IQ4 STB actually looks pretty good. Fresh, modern UI with thumbnails for content, allows you to stream on Demand as well as apps like NETFLIX...plus also uses satellite and allows you to record etc...
And yet, despite a pretty decent STB offering, their core customer base is still rapidly declining in favour of their streaming options - Kayo for Sport and Foxtel NOW for entertainment.
Yet our Board and Management think NZ is different and based on their 'customer insights' date we need to spend a bunch of dosh on a new box. Unbelievable.
And now the Off markets are back...
Another 8mln or so shares traded so far, surely one would hope seller would've dried up by now...
I bought this stock for two reasons, firstly because of massive free cash flows and therefore anticipated big dividends and or buy backs. Secondly, a merger or takeover of some sort.
This first point seems to be going out the window, management are reluctant to pay out free cash and instead want to spend it all on new products and offerings, I don't have much faith in management to execute on these initiatives. Previously my lack of faith wasn't as problematic, all they had to do was collect the checks and pay the dividends, this is no longer the case as flagged in the investor presentation, there will be significantly less free cash flow going forward.
Now the merger or takeover angle is still very much in play, in fact more likely now than ever but I think what is clear is noone is interested in paying very much. Sky waving the white flag in slide 80 imo comes from a position of weakness and they're probably getting hard balled on negotiations.
Last year I didn't mind having unlimited patience for a deal as long as the dividends returned and I was being paid for my patience, this is no longer the case and there are good reasons the SP is in the toilet.
Interesting price action today. Someone just keeps hitting the ask.
So I watched the UEFA final this morning...not really much of a football fan...
Though I note that this was on Sky Sport 7 (beIN sport).
In 2019 we extended our partnership with beIN Sport for another 4 years.
But does this not mean that Spark Sport actually won the UEFA championship from next year from beIN Sport? Not Sky?
I am not even sure Sky put a bid in for this?
The net result is still that Sky don't get to show the football...however it appears inaccurate to say it was won from Sky, when beIN have the rights?
Hopefully Sky can work with Spark to do a similar beIN Sport deal whereby a channel or two can be dedicated to Spark Sport content. We have given them a wholesale streaming deal...they should show that they can work with Sky and get a similar deal going for satellite.
Go for the win-win, as there will never a be a 'winner takes all'.
The game was also on Prime free to air.
more big qtys, someone still selling, someone still buying
We still jogging on the spot with SKT ? ;)
No take out developments yet ? ;)
Sky is delighted to announce that we will broadcast and stream all 64 matches of the FIFA Women’s World Cup 2023 live and on-demand. This is fantastic news for Sky and for women in sport.
Sarai Bareman, Chief Women’s Football Officer, FIFA (and proud New Zealander!) says: “FIFA is excited to welcome Sky as our official broadcaster of the FIFA Women’s World Cup 2023™ for New Zealand. Sky has shown a strong track record of broadcasting women’s football in New Zealand and this deal will provide unprecedented coverage of the tournament, as well as bringing women’s football to more fans and new audiences. We look forward to working with Sky to promote the FIFA Women’s World Cup 2023 to accelerate the growth and visibility of the women’s game in New Zealand in the lead up to 2023.”
We are honoured to have been chosen to deliver the FIFA Women’s World Cup and are committed to supporting the growth and development of the women’s game alongside our support for women in sport across dozens of other codes, athletes, teams and communities throughout Aotearoa.
Almost one billion fans watched the 2019 FIFA Women’s World Cup in France and we think the 2023 tournament will be bigger again, with more teams and an even larger fanbase, and of course in two fantastic countries – Australia and New Zealand.
The last word must surely go to Ali Riley current captain of the Football Ferns: “The FIFA Women’s World Cup 2023 will be the biggest sporting event ever held in Aotearoa and it is great to know every game will be broadcast live on Sky Sport. This is a once in a lifetime opportunity for kiwi fans to see the best players in the world right here in New Zealand. This is our chance to inspire in future generations at home, and across the wider Pacific, and I know the whole squad can’t wait to get started.”
I guess FIFA will be paying NEP a handsome fee to produce the live broadcasts, after sky sold them the OSB business?
slimming down operations does have its drawbacks sometimes.
Today’s announcement is merely Sky getting the broadcast & streaming rights for the tournament in New Zealand (most games are played in Australia), sky is not producing the content AFAIK. FIFA owns the worldwide rights to the tournament and sell them off country by country.
As part of the broadcast rights, Sky will need to be able to produce the domestic matches. Just like they do with SANZAAR or any other code that has domestic matches.
The sporting codes negotiate a price to broadcast their matches with the Broadcasters around the world, but the it is up to whoever wins the rights to facilitate the production of any home games. The sporting codes do not have separate negotiations with companies like NEP - it's not their problem.
And right on cue after that great news, sky shares dip. As per usual.
that’s not the case with big tournaments like world cups. Usually for those events the organizer (IOC, FIFA etc) provide generic raw video product for everyone to layer their own commentary and visual effects/replays etc on. For instance a Swiss company HBS has produced all the FIFA men’s World Cup tournaments around the world since 2000, rather than the host country broadcaster, and that’s because fifa want consistent high quality, rather than just going with whichever network paid the most for the broadcast rights in the host country.
having said that I don’t know if they will do the same with the women’s World Cup yet.
At least NZ doesn’t need to qualify for this World Cup …..will see a few games with them in before the competition gets serious
so the property sale must be going well.....
https://www.nzherald.co.nz/entertain...N2DFQC72FCSKM/
Ogg will be gutted.
Either they didn’t get the interest they wanted, and now won’t sell it because they can only get chump change for it…or…
An intense bidding war is ongoing and shareholders are in for a massive windfall!
Is it premature for me to nip out to New World and grab a bottle of Dom Perignon?
It was useful to get a breakdown of CAPEX needs for Sky.
Interestingly, the 'stay in business' CAPEX requirements for Sky is only about $10M-$15M.
That produces FY21 Owner Earnings of $110M-$120M.
Since investing in Sky I have conservatively taken the entire CAPEX spend and treated it all as 'keep the lights on' (and therefore end up with a lower OE figure). I think this is still fair at the moment because the money spent on growth is tied to survival...and in a way is all 'stay in business' spend (i.e. if they don't invest in streaming, broadband etc there would not have been a business left for very long).
But still useful to get the breakdown. Once the big investments are completed over the next 2-3 years FCF will rocket up again. We will stay FCF positive the whole way (which is amazing when you think about it) but should comfortably generate FCF north of $50M again in a few years if Management and The Board are effective in their strategy.
I have to say, these "unsolicited offers" seem unlikely to eventuate into anything.
It has been over 3 weeks since they announced that they have employed Jarden to help with a review. Jarden would have been employed before the Investor Day...so it could be more like 4 weeks.
I think it would only realistically take a week or two for The Board to decide if they were going to pursue any of the deals. Certainly not a month.
My guess is that they are not moving forward with any of the proposals.
It would also appear that the property sale is not happening either, for similar reasoning.
So what next, perhaps Ogg will consult his crystal ball again:mellow:.
Wow ogg, how uncanny a minute after you posted.....
https://www.sharetrader.co.nz/image/...AAAElFTkSuQmCC