Good addon to SPARK ?:)
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The future looks bad. The product is average at best. Sunset company. You can use Google to get realtime content for virtually no cost. Even watered down Netflix is better.
Only Baby Boomers have subs? What is defensible...?
hmmm not sure this the best use of money promoting the brand?
https://www.nzherald.co.nz/business/...ectid=12260880
Just had a quick squiz through the annual report, jeez that doesn't look good. Burning cash, $400M worth of Goodwill still on the books, only $4m in the bank. Yikes!
The Goodwill carried on the books comes from back in 2005 when Independent Newspapers Ltd (INL) and Sky merged.
A company called "Mergeco" was set up and purchased all of the shares in Sky, and all of the shares in INL. Mergeco was then renamed SKY NETWORK TELEVISION. As a result, about 1.5B was recorded on the Balance Sheet as an intangible "Goodwill" asset reflecting the INL brand value at the time.
The deal stacked up back in 2005 and gained shareholder approval etc. However the world has moved on, and even though the original INL Goodwill value has been amortised over the years, that remaining asset value was not representative of the true value in 2019.
Sky wrote off $360M of Goodwill last year. They have opted to be even more aggressive this year and write off another $670M. They could have written off less, but opted to rip the plaster off.
Basically, given the state of the media industry and the future direction the company needs to take...writing INL off the books is the right thing to do. It would be disingenuous to pretend that the INL intangibles were still worth over $1B in 2019.
A bold move, but it does mean the bottom line GAAP profit looks terrifying. Underlying earnings and cash flows are not affected at all though.
Hope that helps.
Yes it does, thanks. I was unaware that this had occurred....although I did have some knowledge of where Goodwill comes from. I am pleased it is not from a Television series that they decided not to make, or something like that.
Would they have been prompted by their auditors to do this ?
At one point they owned around 80 publications etc.
But by 2005 they had sold pretty much all of them. They were majority owner of Sky at the time though - and Sky was their main remaining asset after selling off the papers, magazines, Stuff.co.nz etc etc. So the decision to merge was eventually made. And with that merger Sky inherited a large Goodwill asset.
Would have to try and dig into the old Annual Reports to get a more detailed understanding of how the deal was constructed.
True.
Why are you so confident with this stock?
Do you have much of a stake.?
I have to agree this new CEO is doing pretty much exactly what was needed.
No comment on whether this is priced right though.