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Satellite TV News BSkyB plans to create European TV superpower

False Prophet

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Sep 21, 2014
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BSkyB has reached a deal with 21st Century Fox to buy 100% of Sky Italia and 57.4% of Sky Deutschland for ?4.9 billion and BSkyB?s 21% stake in the National Geographic channel, a deal worth in the region of ?5.4 billion.

BSkyB chief executive Jeremy Darroch feels that this move will make BSkyB ?a world-class, multinational pay TV business? and the dominant European pay-television giant. With the acquisition, BSkyB now owns ? of the largest pay TV markets in Europe. Furthermore, and maybe more importantly, the company has expanded their potential customer base from roughly 30 million households to almost 100 million.

As Nick Ferguson, the chairman of BSkyB, has pointed out, the move ?will deliver growth and value creation for all shareholders?. 70% of all households in Italy and Germany do not pay for their television subscription currently; therefore, BSkyB now has a market of roughly 70 million consumers (including the rest of the UK market) that they can target.

This move comes after BSkyB received half a billion pounds from selling its stake in ITV to Liberty Global. Now, 21st Century Fox are looking to reinvest their funds to take over Time Warner (the owner of CNN and Warner Bros studio).

With stronger than expected results for the end of the 2013-14 financial year, and the potential for total market penetration in two of the biggest European markets, BSkyB is going from strength to strength. However, there are also sceptics who say that both the new markets have little interest in paid subscriptions and that this move COULD end badly.

With the above in mind, BSkyB has already forecasted that they expect neutral earnings in the second full financial year of the acquisition, and that they expect to be ?strongly accretive thereafter?, which, if correct, will see BSkyB go from strength to strength.

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