Rupert Murdoch’s 21st Century Fox has lost its battle to own Sky, the European satellite company he founded. Instead the winners of an unusual auction for the shares ending Saturday was Comcast.
Sky has operations in Ireland and Italy among other EU countries but the jewel in the crown is the UK market where it is a fully “vertical” telecoms company. In other words it offers the consumer a package of satellite television, broadband, land line and mobile (cell) phone services. Some people, especially in apartment blocks, cannot have a satellite dish so they also offer some of their own branded channels via the internet on a subscription basis via “Now TV”. The viewer either uses a separate set-top box although many smart TVs have the app built in. They can also view recent movies on a subscription or pay to view basis and control uplinks to satellites for other broadcasters (which may or may not appear on the Sky Electronic Program Guide).
Sky produce a lot of their own entertainment content but their Sky News channel is an excellent operation. One factor against Murdoch taking over complete control was the fear of a “Foxing up” of Sky News. There were also media ownership concerns with Murdoch still controlling newspapers. (The SD version of Sky News is broadcast on terrestrial television. )
Comcast is the second US cable company to control part of the UK’s TV delivery. Liberty Media now own Virginmedia which is a similarly “vertical” company based on the cable networks it owns. So their consumers can get a cable TV, broadband and “land line” telephone and add a cellphone to the full package. In cross-deals they also carry content from Sky and others.
One of the attractions of 21st Century Fox in the link-up with Disney was the large catalog of old and new movies the joint operation would produce, as well as their TV content. Sky gave them a captive buyer for this content and it would be possible to draw a lot of money out of Sky into a tax haven for the rights to use it. (A simple tax avoidance process would be for Sky to pay well over the odds for Disney/Fox content to a separate company set up to market rights worldwide, based in a tax haven. This would reduce their UK tax on Sky profits.)