BSkyB is paying £4.9 billion in cash to take over Sky Italia and
Sky Germany and create a European media powerhouse, the company
announced as it released its annual results.
BSkyB reported that revenues have jumped 7 percent this year,
but pre-tax profits fell from £1.26 billion to £1.2 billion. Market
conditions are tough currently though, which is why the company is
casting its net wide by attempting to dominate the European pay-TV
As a unified company, Sky would have 20 million customers across
three of the four biggest European markets, with about 8.5 million
of those customers based outside of the UK. Pay TV is not yet as
popular and widespread as it is in the UK, but Sky is hoping to use
the lessons in the UK to persuade people over. There are 97 million
households it has within its sight that it sees as “addressable”,
66 million of which have yet to adopt Pay TV.
The person set most to profit from all of this is of course
Rupert Murdoch the man at the helm of 21st Century Fox — the
company that both owns Sky Italia and Sky Germany and is already
the top shareholder in BSkyB. Fox currently owns 100 percent of Sky
Italia and 57 percent of Sky Deutschland and 39 percent of BSkyB.
It is expected that Fox will be using the proceeds from the sale to
fund a higher bid to purchase Time Warner in the US, after it
recently rejected an initial offer of $80 billion.
As the news was announced, BSkyB share prices dropped, as it
will mean that the company takes on a higher level of debt. The
acquisitions will of course have to be approved by regulators and
shareholders before they are finalised.