Comcast Makes $31 Billion Bid For European Broadcaster Sky

Feb 27, 2018
Originally published on February 27, 2018 9:01 pm
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AILSA CHANG, HOST:

The Comcast company, which is the nation's largest cable TV and broadband provider, is offering $31 billion to buy the British-based satellite TV company Sky. The offer is another reflection of deep anxieties in Hollywood about the threat posed by streaming services such as Netflix. And it's throwing the plans of other big media giants into disarray.

NPR's David Folkenflik joins us now to talk about this latest bid on Sky. Hey, David.

DAVID FOLKENFLIK, BYLINE: Hey, Ailsa.

CHANG: So help me understand the players here. You and I were just talking about Sky last month. Am I getting this right? We now have three global media companies competing for ownership of Sky.

FOLKENFLIK: Well, think of it this way. There was one deal seemingly aligned to set them up like a series of nesting dolls. You know, Sky, which is this major European broadcaster and broadband provider - huge foothold in the U.K., Ireland, Germany, Austria, Italy. And Rupert Murdoch owns - his company, 21st Century Fox, controls about 40 percent of it. He's made a bid to buy the other 60 percent. Disney more recently, last fall, made an offer to buy most of Murdoch's entertainment holdings from 21st Century Fox. It would include his 40 percent stake in Sky and, indeed, his entire stake if he's able to take the thing over.

So you have Disney swallowing much of 21st Century Fox swallowing Sky. That was the deal lined up. Comcast threatens to be a bowling ball knocking them all down and says, you know, we want to take over Sky for ourself. We're making a sweetened offer, more than 10 percent more than the folks at Fox are offering. We think we should have a good deal here and get a much bigger international base. Comcast, it should be remembered, is also the owner of NBCUniversal, a major entertainment company in its own right.

CHANG: Right. But here's what I don't understand. Why does Rupert Murdoch want Sky so badly? Or to be more precise, why does he want the rest of the company he doesn't already own if he's just going to turn around and sell it to Disney?

FOLKENFLIK: Well, it helps to keep in mind, of course, that the Disney offer is more recent than his own. And it helps to keep in mind a lot of history going back more than a generation. Rupert Murdoch effectively started what became Sky and had to sell off much of it in order to deal with his mounting debts. For almost the past decade, he has been on an endeavor to buy it back. That endeavor was exploded in 2011 with a huge corruption and phone hacking scandal at his British tabloids in 2011. And then he's been trying in recent years to rebuild it. There have been a lot of regulatory blocks to that in the U.K. And he's been trying to get around it, most recently promising to insulate Sky News, which is a part of Sky, from his editorial interference for about a decade. That's a big promise.

Nonetheless, he wants it to sort of build up what he had to give his sons, Lachlan and James, as they continued. More recently, however, last fall, they decided, we're not going to be able to make it. You look at Netflix - such a big buyer of major entertainment. You look at Apple, Amazon, other players coming into the market that might wipe out some Hollywood players. They thought, better to team up with Disney and try to compete with this growing surge of streaming services.

CHANG: And Comcast, which is based in Philadelphia, didn't seem all that interested in Sky until today when it submitted this bid - is part of Comcast's motivation just trying to block a deal that might benefit its rivals?

FOLKENFLIK: I think it's a bit of a twofer. You thwart Disney to some extent, and you take over something that has an opportunity to help them build their international stake as well.

CHANG: All right, that's NPR media correspondent David Folkenflik. Thank you.

FOLKENFLIK: You bet.

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