SKT Sky Network Television Limited.

[mistaTea]

Love ya comments I really do... Sky is such a dead set winner in my opine that it doesnt feel like a risk. The waiting is delayed "gratification" holding on for the divie or buy back eh MT

If you truly understand a business and are in it for the long haul then your risk is very low regardless of what the SP does in the meantime.

Stock price volatility does not equal risk.

Of course, if your analysis of the company/industry etc leads you to draw incorrect conclusions then consolidation can be painful.

[mikelee]

I believe that's how Warren Buffett made his billions. :)

[mistaTea]

Plex trying to steal our Sky Box thunder with a new feature called 'Discovery' which will help people aggregate content from 3rd party services.

https://www.plex.tv/blog/end-the-streaming-struggle-with-plex/?utm_source=Plex&utm_medium=email&utm_content=houston_button&utm_campaign=w2w_launch_2022_pm

[winner69]

Read in an article re AIR rights that in SKT rights raise the new shares were at at a 63% discount to the price on the day. They were saying AIR discount is about the same so no worries it will all turn out OK for share holders

I take it that the SKT shareholders who were holding back then (at 33 cents) are ahead of the game by now ...... gives some hope for AIR shareholders

[Popeye]

One difference being that there were good arguments (that have come to pass) that the market was seriously undervaluing the Sky business at the time, you dont hear anyone arguing that for Air. It is more if everything goes really really well than in 3 or 4 years there might be a chance of a dividend. Play a blinder and there might be some orange slices waiting for you in the changing shed type of thing.

Having said that, the pricing of both offers showed a lack of confidence in the businesses, or at least lack of confidence in the markets views of the businesses...

Sky cap raise was an opportunity, not so sure about Air, perhaps an opportunity to stay put?

[mistaTea]

https://www.broadbandtvnews.com/2022/03/30/consumers-demanding-better-content-discovery/

Let's hope our new STB is up to the task! The first release won't do everything it needs to, but some quick iterations in the 6-12 months after the product launch should help ease the 'subscription overload' problem.

"Among subscribers to streaming services, one-third express an interest in being able to manage and search for their available content from one place. Consumers want aggregation services to help remove pain points from the subscription process. They also expect bundled offerings to deliver greater value, as well as to improve account management, discovery, and content recommendation functionality."

[mistaTea]

Sure thing, in the meantime will we hit $3 today or sometime this weeks. Trading depth suggests could be either today or tomorrow.

There have been a lot of lies told here (https://i.pinimg.com/originals/b8/a1/d5/b8a1d51a5daff9021c116aa2651b5634.gif) these days!

[Arbroath]

One difference being that there were good arguments (that have come to pass) that the market was seriously undervaluing the Sky business at the time, you dont hear anyone arguing that for Air. It is more if everything goes really really well than in 3 or 4 years there might be a chance of a dividend. Play a blinder and there might be some orange slices waiting for you in the changing shed type of thing.

Having said that, the pricing of both offers showed a lack of confidence in the businesses, or at least lack of confidence in the markets views of the businesses...

Sky cap raise was an opportunity, not so sure about Air, perhaps an opportunity to stay put?

Another massive difference was SKY were becoming debt free from their rights issue and were still profitable at the time whereas AIR are losing money badly still and have loads of debt on the balance sheet even after raking in $1.2b.

Chalk and cheese

[snigmac]

Cheese that is worth at last $3 a share. Hopefully the market will realize this soon.

[Sideshow Bob]

Cheese that is worth at last $3 a share. Hopefully the market will realize this soon.

I'm still knibbling away at said cheese.....

Definitely not knibbling away at that chalk!!

[Getty]

There have been a lot of lies told here (https://i.pinimg.com/originals/b8/a1/d5/b8a1d51a5daff9021c116aa2651b5634.gif) these days!

Surely not "an organised litany of lies" would ask Justice Mahon?

[winner69]

Aussie Grand Prix should be awesome viewing

[mistaTea]

We are only 10 weeks away (give our take) from finding out what the plan is for capital management. Not long to go.

If the SP does keep heading up then the argument for a tax free distribution instead of an on-market buyback will be even stronger.

Management might prefer a buyback regardless of what the SP is because it will lift earnings per share (and make them look better).

A few months ago a $30M buyback could have theoretically purchased 10% of company shares. I would have been strongly in favour.

Now they would be lucky to buy back 5%...so not such an amaing prospect anymore in my view.

[mistaTea]

https://www.reuters.com/business/media-telecom/warner-bros-discovery-top-boss-announces-new-leadership-team-2022-04-07/

We already have an exclusive (and expanded) Warner deal with a “co-exclusive” Discovery deal.

The HBO deal was negotiated during the Warner-Discovery merger process (which is important I think because I don’t think they would have been keen to lock in an exclusive deal with SNT if the plan is to imminently go OTT with a beefed up Discovery service).

Ultimately I think Discovery maximise their revenue by maintaining a deal with Sky that allows Sky to do well while also being able to provide more premium content on their own service so that they can maximise advertising revenue.

Same goes for Disney. I would be surprised if they pulled their ESPN content from Sky like they did with their Disney content. I think at a minimum we will see an expanded wholesale arrangement for Disney+ too (which is probably better than a “co-exclusive” deal ask Sky would only have to pay per subscriber and Disney+ can integrate well with the rest of Sky’s content when the new STB is launched).

[mistaTea]

https://www.nzherald.co.nz/sport/nzme-secures-exclusive-radio-rugby-commentary-rights/I5T7IEOFNY7PX2BV3X5HRO7WX4/

Just picking up on Adam's comments (I think this must have been added after I saw the original article):

Adam Crothers, Sky's Head of Sport Partnerships, says: "There's no doubt rugby is a cornerstone sport for our customers, and while Sky offers multiple ways to enjoy every try, ruck and lineout, we're really pleased to add NZME to the mix to extend the reach of New Zealand's game. This agreement is an important part of our distribution strategy, which enables more New Zealanders to access the content they want."

NZME an important part of our distribution strategy.

Excellent...

[snigmac]

I'm still of the opinion that Sky will buy into NZR. If this occurs, I think it would be a very positive point for Sky. Maybe an investment of NZD100m by Sky into NZR.

[mistaTea]

I'm still of the opinion that Sky will buy into NZR. If this occurs, I think it would be a very positive point for Sky. Maybe an investment of NZD100m by Sky into NZR.

Basing that on this article?

https://www.stuff.co.nz/sport/rugby/300519213/nz-rugby-massive-deal-with-us-private-equity-giant-silver-lake-approved

"Silver Lake will invest $200 million in a new commercial entity that will house all revenue-generating assets of NZR, with additional co-investment of up to $100 million to be offered to New Zealand-based institutional investors later in 2022."

[snigmac]

Yes :). Also based on the long standing relationship between the two entities and the idea that Sky has just enough money for around a $100m investment plus dividend. Lines up quite well..

[mistaTea]

Yes :). Also based on the long standing relationship between the two entities.

Fair enough. For me I think what is exciting is that Sky have so many options - and the Balance Sheet to take advantage of these opportunities. A number of possibilities are there for Sky including:



A deal with NZR
A deal with NZME
A deal with a telco
A deal with Foxtel
Private Equity


The June Investor Day will be very interesting. As I have mentioned dozens of times in previous posts, we only want a capital return IF there are no better investment opportunities for Sky to exploit.

Will they have something bold to announce by June? Or will they not have any 'game changing' deals in mind and just keep some cash to speed up work on the new STB so that cash can be returned to shareholders?

I prefer that they can use all of the cash for a material investment.

[airedale]

https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832

From today's UK news.
(https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832)

[mistaTea]

https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832


Can you share cliff notes? I don't want to register for an account.

Edit: I managed to screen grab some of the article. Looks like they are releasing an IP-only puck.

Sophie mentioned in the last presso to that our first STB will be a hybrid, but we are also working on an IP-only version.

[airedale]

https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832

Try that MT, I don't know what cliff notes are. You may be able to get a trial sub to the UK Telegraph for a small sum for a month.
(https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832)

[nztx]

Can you share cliff notes? I don't want to register for an account.

Edit: I managed to screen grab some of the article. Looks like they are releasing an IP-only puck.

Sophie mentioned in the last presso to that our first STB will be a hybrid, but we are also working on an IP-only version.


Got the same thing here too

The Telegraph UK appear to be more interested in plugging their Spring Offer than allowing
access to something meaningful :)

[mistaTea]

https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832

Try that MT, I don't know what cliff notes are. You may be able to get a trial sub to the UK Telegraph for a small sum for a month.
(https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832)

Cliff notes just means a summary of what you read.

[bottomfeeder]

Android boxes can be bought fir $50 from China. I thought Sky would be more innovative than that. I think to compete in this world of streaming they need a box that has many more functions. Plus I feel that while terrestrial signals may have had their day in the next 10 years, it may have a resurgence, and should be kept until it is absolutely certain that it will fade. We are seemingly at a crossroads of technology and media services. Hasty decisions now will affect the company many years into the future.

[mistaTea]

Android boxes can be bought fir $50 from China. I thought Sky would be more innovative than that. I think to compete in this world of streaming they need a box that has many more functions. Plus I feel that while terrestrial signals may have had their day in the next 10 years, it may have a resurgence, and should be kept until it is absolutely certain that it will fade. We are seemingly at a crossroads of technology and media services. Hasty decisions now will affect the company many years into the future.

Well, Sky Tv are hedging their bets by having a hybrid box for the first release. Sky UK releasing an IP puck doesn't mean they are planning to turn off satellite imminently, but when you consider the puck in conjunction with Sky Glass it is clear that streaming is where they see the future (and therefore this is where they will invest).

Foxtel have released their new STB too and it is IP only.

There are still large swathes of provincial NZ that don't have good internet (and won't for years to come) which is why the hybrid box is a good first step. But even if some households never get UFB they will get 5G in the near future. So the need for satellite technology will diminish steadily, and Sky NZ need to make sure they are on top of these changes.

To me, what is truly heartbreaking is that we should have had a new STB released in 2019. Under John Fellet we were building the Cisco Infinite Video Platform (https://www.globenewswire.com/news-release/2017/09/14/1271718/0/en/Sky-New-Zealand-Advances-Multiscreen-TV-Experiences-With-Cisco-Infinite-Video-Platform.html). My sources tell me that we were only a couple of months or so away from releasing the new box before Martin Stewart lobbied The Board to sh1tcan the project because he felt our future was in streaming apps.
That decision cost shareholders $40M in development costs as well as 3 more years of trying to flog MySky in a post-NETFLIX world. I remember Martin commented at the time that MySky customers are "well served" but the future was in streaming apps. Well served my arse.

Less than 12 months after canning Infinite Video he decides that was a mistake after all and we do need a STB! So that we can aggregate 3rd Party content with Sky content! And so shareholder have now had to start a new project with a new provider and spend the money all over again. Sophie has reiterated that we are on track for a 'mid 2022' release...but we are mid April now and there has not been any announcement about a soft launch to staff and select customers. I put my hand up to trial the STB before the main launch and have not heard from them. So Christ only knows what is happening there.

My source also tells me that the Infinite Video fiasco may have been the beginning of the end for Martin. He was good chums with Bowman at the start (they both joined Sky TV around the same time) and Martin managed to convince Bowman that cancelling IV was a good idea. I believe Bowman took an active role in lobbying for Martin's request at Board meetings and ultimately got The Board to sign off on it.

So Bowman looked like an absolute a$$hole when not even a year later they are flip-flopping on that (very expensive) decision and so that was the beginning of the end for that relationship.

What is done is done, and all we can do is move forward now - and Sophie has been executing well so far. Let's hope there aren't any major delays to the STB rollout - we really do need the tech!

And we can't pin everything on Martin Stewart either, ultimately Philip Bowman as Chairman has a lot to answer for and I am still waiting for his resignation. Living in the UK so far removed from our company is just not tenable in the long term.

Bowman's predecessor, Peter Macourt, lamented for some time that it was not ideal him being based in Australia. He wouldn't get to talk to people down the pub, on his travels, Uber drivers etc to get a ground-level feel for how Sky was being perceived. One of the key selling points for selecting Bowman was that he lives in NZ!
Now he has moved half a world away and I do not think this is an acceptable situation for shareholders.

Let's not forget that while Bowman was in NZ (and presumably engaged with the business), he:



Advocated for Martin Stewart's idea to cancel Infinite Video when it was not far from launching and had already sucked up significant shareholder capital
Rejected a partnership deal from Comcast (via Atairos which is a Comcast-backed PE outfit I believe) whereby they offered to pay off the bonds and supply Sky with their content in return for equity in the company
On the back of (2) Bowman oversaw a dillutory Capital Raise that has absolutely wiped out any shareholder that was unable to participate (NZ Rugby being one of them!)
Rejected out of hand a takeover bid from Private Equity. That offer started at $400M and probably would have closed at $430M-$450M (in the absence of a bidding war) when our market cap was only $300M. The decision to outright reject that deal a year or so ago may look ok now that the market cap is sitting at $485M...but actually, when you add in the opportunity cost of a bird in the hand a year ago and investment returns you could have received investing elsewhere, we are currently no better off at the moment. Depending on what they do with the cash on hand, and how much of a dividend they end up paying we may end up better off down the line, but that is anything but certain.

[snigmac]

Less than 2 months to go now for the capital management plan?

[mistaTea]

Less than 2 months to go now for the capital management plan?


11 weeks exactly by my reckoning if they hold the ID the same time they did last year (June 29).

[snigmac]

Thanks. Aih still abit if waiting to go...

[airedale]

https://www.telegraph.co.uk/business/2022/04/12/sky-speeds-demise-satellite-dish/?WT.mc_id=e_DM1832&WT.tsrc=email&etype=Edi_FPM_New&utmsource=email&utm_medium=Edi_FPM_New20220412&utm_campaign=DM1832
I have tried a screen shot.....this may work.

[DeathByWarriors]

There are still large swathes of provincial NZ that don't have good internet (and won't for years to come) which is why the hybrid box is a good first step. But even if some households never get UFB they will get 5G in the near future. So the need for satellite technology will diminish steadily, and Sky NZ need to make sure they are on top of these changes.






There is little chance most of those areas outside the UFB footprint will be getting 5G. The economics just don't stack up.

[Entrep]

Here's the Telegraph article for all to read: https://archive.ph/gxvU3

[mistaTea]

https://www.nzherald.co.nz/business/streaming-wars-what-fifas-new-service-means-for-nz-broadcasters/VOA74JAEY4DTZIK5RFYQH44NLA/

Chris Keall's latest go at mixing fact with his personal opinion.

"But we only have to look to the world of entertainment, and the runaway success of the global Disney+ (and the disappearance of Disney content from Sky and its peers) to see where this is going to eventually head. Both old-school middlemen like pay-TV broadcasters and new-school ticket-clippers like streaming aggregators will get cut out of the picture."

The conclusion he draws is based on his opinion that fragmentation will continue and everyone will just eventually go OTT and hope the masses are happy to subscribe to a dozen or so different services.

He has been chanting this mantra for years now and, so far, we haven't seen anything like his worst-case prophesies. Sky continues to renew deals. and on the balance of probabilities will continue to renew deals in the future.

"Co-exclusivity" may be a concept that becomes more common for aggregators like Sky TV NZ - but there will always be some deals that Sky is willing to pony up for to get on an exclusive basis. The 'hook' to lure more customers.

It is also worth noting that Sky UK 'lost' Disney content when they launched Disney+ but now has a wholesale deal with Disney so that the service can be bundled in with the rest of their content.

We currently have a wholesale deal of sorts to give Disney+ for 'free' for 12 months when a customer takes broadband. I think it is likely that this deal will be expanded out in the future so that Sky can continue to offer it as part of a bundle - let's watch this space.

There is still very much a need for content aggregators, especially as the market continues to fragment. But the nature of aggregation will evolve to include:



Exclusive deals where they are important (HBO, NZ Rugby, NRL etc...)
Co-exclusivity in other cases where the partner values Sky TV as a revenue stream but also want to be able to offer their own app
Opportunities to offer 3rd Party services to consumers for cheaper as part of a Sky Bundle (Sky clip the ticket on the difference between the wholesale charge and what they can charge customers)


And the new (long overdue!) STB will help Sky to retain their position in NZ as the preferred aggregator.

[Arbroath]

https://www.nzherald.co.nz/business/streaming-wars-what-fifas-new-service-means-for-nz-broadcasters/VOA74JAEY4DTZIK5RFYQH44NLA/

Chris Keall's latest go at mixing fact with his personal opinion.

"But we only have to look to the world of entertainment, and the runaway success of the global Disney+ (and the disappearance of Disney content from Sky and its peers) to see where this is going to eventually head. Both old-school middlemen like pay-TV broadcasters and new-school ticket-clippers like streaming aggregators will get cut out of the picture."

The conclusion he draws is based on his opinion that fragmentation will continue and everyone will just eventually go OTT and hope the masses are happy to subscribe to a dozen or so different services.

He has been chanting this mantra for years now and, so far, we haven't seen anything like his worst-case prophesies. Sky continues to renew deals. and on the balance of probabilities will continue to renew deals in the future.

"Co-exclusivity" may be a concept that becomes more common for aggregators like Sky TV NZ - but there will always be some deals that Sky is willing to pony up for to get on an exclusive basis. The 'hook' to lure more customers.

It is also worth noting that Sky UK 'lost' Disney content when they launched Disney+ but now has a wholesale deal with Disney so that the service can be bundled in with the rest of their content.

We currently have a wholesale deal of sorts to give Disney+ for 'free' for 12 months when a customer takes broadband. I think it is likely that this deal will be expanded out in the future so that Sky can continue to offer it as part of a bundle - let's watch this space.

There is still very much a need for content aggregators, especially as the market continues to fragment. But the nature of aggregation will evolve to include:



Exclusive deals where they are important (HBO, NZ Rugby, NRL etc...)
Co-exclusivity in other cases where the partner values Sky TV as a revenue stream but also want to be able to offer their own app
Opportunities to offer 3rd Party services to consumers for cheaper as part of a Sky Bundle (Sky clip the ticket on the difference between the wholesale charge and what they can charge customers)


And the new (long overdue!) STB will help Sky to retain their position in NZ as the preferred aggregator.

Oh no, maybe Chris is right as he is journalist and all....should I sell now for a 60% gain before the world ends for Sky...

[bottomfeeder]

Oh no, maybe Chris is right as he is journalist and all....should I sell now for a 60% gain before the world ends for Sky...
Sell half.

[Quantitative Easing]

https://www.reddit.com/r/PersonalFinanceNZ/comments/u2iiiz/nzx_50_sucks/

At least Mistatea got a mention.

[mistaTea]

https://www.reddit.com/r/PersonalFinanceNZ/comments/u2iiiz/nzx_50_sucks/

At least Mistatea got a mention.

Well, ain’t that something.

[Quantitative Easing]

Well, ain’t that something.

You're famous Bro/Xiongdi/Bhaiya/teina/uso/dox

[mistaTea]

You're famous Bro/Xiongdi/Bhaiya/teina/uso/dox

Let’s not forget that it wasn’t that long ago I was down 90%…

[mistaTea]

https://www.nbr.co.nz/story/morrison-co-consortium-acquires-aussie-telco-uniti

Looks like MIRA will have to find something else to buy

[mistaTea]

Looks like Sky have done a lot of work in the My Account section of their website. Has had a fairly significant refresh.

And it looks like from June 13 my package will become $10/month cheaper as they will stop charging me for the wifi booster I had to get a few months back.

No doubt part of the work they are doing to try and refresh their pricing/packages - and needed in the context of Sky Sport subscriptions needing to go up in price (albeit a modest price increase there only).

[mikelee]

I wonder who is going to lose the most customer in the end? Business like Netflix or SKY.

https://www.bbc.com/news/business-61139483

The rising cost of living in Britain has led to households cancelling their streaming subscriptions, new research suggests.

[Balance]

I wonder who is going to lose the most customer in the end? Business like Netflix or SKY.

https://www.bbc.com/news/business-61139483

The rising cost of living in Britain has led to households cancelling their streaming subscriptions, new research suggests.

Comes down to who has the sports.

[Marilyn Munroe]

I wonder who is going to lose the most customer in the end? Business like Netflix or SKY.

https://www.bbc.com/news/business-61139483

The rising cost of living in Britain has led to households cancelling their streaming subscriptions, new research suggests.

Headline: Netflix shares crater 24% after company reports it lost subscribers for the first time in more than 10 years.

https://www.cnbc.com/2022/04/19/netflix-nflx-earnings-q1-2022.html

Boop boop de do
Marilyn

[bull....]

it appears streaming thieves are to blame , they probably do the same to neon

[mistaTea]

it appears streaming thieves are to blame , they probably do the same to neon

They absolutely do.

NETFLIX reckon they are going to release some tech that will catch offenders and make them pay an extra fee. I am very sceptical that it will work.

We don't have this issue with SSN where you can only have a single stream at a time.

Even for our STB customers, a number of them will share their Sky GO credentials with friends and families.

At the moment it is not a major issue for Sky TV because we are still seeing enormous growth in NEON and SSN while stabilising the STB base. But there will come a time in the not too distant future where the growth we see slows dramatically (and even potentially reverses) and Sky will also have to clamp down.

Also of interest: https://fortune.com/2022/04/19/inflation-worldwide-2022-netflix-amazon-prime-disney-streaming-subscription-cancellations-spike/

Disney+ seems to be the first service for many to get sh1tcanned. I currently have the service for 'free' with my Sky Broadband, and it is not a bad service...but I would not renew it unless Sky are able to continue giving it to me for 'free' or it is offered at a steep discount to the RRP as part of a Sky bundle.

[mistaTea]

Looks like I missed this one a week or so ago.

https://www.smh.com.au/business/companies/foxtel-ipo-plans-back-on-hold-20220408-p5ac0t.html

Foxtel IPO 'on hold' indefnitely - for the umpteenth time!

And they are in an expensive bidding war at the moment for AFL (https://www.channelnews.com.au/afl-bidding-war-foxtel-seen-as-preferred-streaming-channel/).

One of the reasons for the lack of appetite from fund managers is the experience that SNT is going through - low SP despite strong Balance Sheet and growth.

These guys need scale, which is why I think that one of the various possibilities is Foxtel and Sky joining up. They could even further consolidate over time by picking up TV stations in the pacific islands. You start by being a larger trans-Tasman entity but ultimately become the media play of the South Pacific.

It would definitely help gain scale and clout with future negotiations for entertainment and sport.

[mistaTea]

it appears streaming thieves are to blame , they probably do the same to neon

https://www.nzherald.co.nz/business/netflix-aims-to-curtail-password-sharing-and-bring-in-ads/PQI7SYXLVCOJ2UBV3TLYTLT4XQ/

I think their plan to roll out a program whereby people can freely share their account with another household for a heavily discounted price if bonkers.

At first blush you think, well ok...if there really are 100M households around the world getting NETFLIX for free, then even if you can get them to pay $3/month that would be an extra $3.6B revenue a year - a 12% increase to revenue! Very good! Right?

Well, I am not so sure. Because once they legitimise password sharing I believe human nature is such that they will see a large number of existing paying subs cancel so that they can share the account of a friend or family member for a discounted price. Especially in this inflationary environment where people are keen to find ways to save money.

I can't begin to speculate on how much of a negative this could be for NETFLIX, but I would expect to see a substantial revenue decline if they go through with this.

They do need to crack down on password sharing - and they have the technology to figure out who is leeching. But I think that they should disrupt the service for those not paying to encourage them to get their own service, rather than reward them for doing the wrong thing.

Sky will face the same dillema once our growth in streaming subs slow down.

[snigmac]

I think alot of the Netflix problem is that families across different countries can use the same account (and it would be fine as they log in at different times - with time zone differences Netflix can't really stop this well). I think account sharing issues applies to Sky to a much lesser extent as it's local to NZ. For Neon access is limited via opened portals at a single time and if different people want to watch at the same time, they need a new account or something (I haven't explored this yet).

[mistaTea]

https://www.stuff.co.nz/business/opinion-analysis/128420776/four-reasons-netflix-may-be-doomed-as-a-brand-and-what-we-can-learn-from-it

I am not sure I go along with the doom prophets that NETFLIX is now doomed to fail, however the service has become quite expensive for what you get and their current moves (to combat their problems) are sure to cause even more people to cancel I think.

It will be interesting to see the latest streaming subscription figures for Sky when the FY results are released.

Being a shareholder of Sky I have bias, but I think you can easily make the case that NEON (which you can get for as little as $13.33/month if you take an Annual Pass) is better value than NETFLIX. The equivalent HD plan for NETFLIX is $18.49.

Now I don't personally think a difference of $5.16/month (17 cents per day...) is going to break the bank for most people. But it is fair to say that NEON is 28% cheaper than NETFLIX yet offers a much better range of premium content - which shouldn't be a suprise given Sky have locked up deals with most of the major production studios (i.e. NETFLIX's competitors).

Regretably, the big one that we don't have a deal with is NETFLIX. I believe Spark still have an exclusive deal with them - I am not sure how much longer that deal runs for nor whether Spark will be prepared to pay the big $$$ again to keep it exclusive. One one hand I hope they don't because I think it would be awesome for Sky to get in on the act...on the other hand I hope they do because the existence of exclusive NETFLIX deals and Spark Sport make it much easier for Sky to exploit attractive M&A opportunities in the future (in terms of being able to get past the regulator).

Anyway, as NETFLIX seek to secure additional revenue streams, I do wonder if they will loosen things up and do deals with traditional cable tv/content aggregation companies like their competitors do?

So they could do a co-exclusive deal with Sky which enables them to continue offering NETFLIX as a standalone produce, but also allows Sky to provide a 'NETFLIX channel' for linear viewing as well as all of their original content available On Demand.

If they start to see a sustained reduction in streaming subscriptions I think they will have to explore this option as a way of regaining lost customers. Just a thought anyway.

[mistaTea]

A further thought...

Even after a massive frop in SP, NETFLIX is still valued at a whopping US$97B (https://finance.yahoo.com/quote/NFLX/).

Warner-Discovery is valued at US$52B (https://finance.yahoo.com/quote/WBD?p=WBD&.tsrc=fin-srch).

Given the changine landscape, I think Warner-Discovery is a better business than NETFLIX. They have a diversified revenue stream and will generate ~US$50B (https://techcrunch.com/2022/04/11/the-warner-bros-discovery-deal-has-officially-closed/#:~:text=Deadline%20reported%20that%20the%20projec ted,22%20million%20paying%20streaming%20subscriber s.) a year (Compared to NETFLIX ~US$30B).

Given the choice, what would you rather have? One NETFLIX...or Two Warner-Discovery? I know what I would pick!

I suspect NETFLIX has a fair way to drop before it becomes a bargain.

Better keep my eyes peeled!

[Rustycage]

WBD also prints $$$ (ie. FCF, FCF yield > 10%) and will use the cash to pay down the debt super quickly. Could give it the ability to buy PARA or take Universal/NBC off of Comcast in a few years time, which would continue to boost the IP library.
IIRC, AT&T indicated peak losses for streaming when they still held WB in 2022 or 2023. It’s def no Marvel, but I think that DC in new hands to give it a new life. I kinda see DC as a darker/more adult version of Marvel

Bullish WBD, looking to buy more
Maybe DIS too if it continues to drop

[mistaTea]

Spark Sport not throwing in the towel yet.

https://www.bloomberg.com/news/articles/2022-04-20/spark-nz-named-official-broadcaster-of-womens-rugby-world-cup.

Interesting that they did not include their pals at TVNZ in this deal though...

[snigmac]

I like how Sky are using their funds to purchase coverage that their research suggests will bring in more $. Too bad Spark don't have this research in hand XD.

[mistaTea]

Just recalled that the woman’s RWC tournament is part of the deal they inked in 2018.

https://www.nzx.com/announcements/316742

So this is a commitment they already made which they have to follow through with. The wording of that article was a bit misleading.

It is interesting though that they dumped TVNZ in favour of Warner discovery.

[snigmac]

Looks like the agreement was upto until 2021 for women's rugby only. So the new agreement would be required for 2022/2023.

[mistaTea]

Looks like the agreement was upto until 2021 for women's rugby only. So the new agreement would be required for 2022/2023.

No dude, it was just delayed due to Covid.

Spark are following through with the commitment they made back in 2018.

So that is not a big deal.

The only interesting thing is the WD deal instead of TVNZ.

[snigmac]

Ah yes, it does look like it was postponed.

[mistaTea]

Ah yes, it does look like it was postponed.

https://media2.giphy.com/media/SMg21Gvvob1sI/200.gif

[snigmac]

I wonder if any early news of the capital investment plan or plans to utilize capital will be provided in May. I think it would be a safe assumption that if nothing comes online for Sky to invest into, we will get a healthy capital return. So I guess... Win win either way?

[mistaTea]

I wonder if any early news of the capital investment plan or plans to utilize capital will be provided in May. I think it would be a safe assumption that if nothing comes online for Sky to invest into, we will get a healthy capital return. So I guess... Win win either way?

Yeah I would think that this would be the case.

But I am not enthusiastic about a capital return or buyback. If they do one then all well and good, but I am more interested in Sky future proofing the business by doing a transformational deal with someone.

They focus needs to be to future proof the business. So long as Sky is solely a content aggregator the risk of being taken out by the competition is higher.

And as an example - Spark doing a deal with Warner-Discovery is not good news for Sky.

[mistaTea]

Meanwhile Sky UK looking for opportunities to go bigger in broadband...

https://www.techradar.com/uk/news/sky-and-vodafone-eye-up-pound3bn-talktalk-takeover

[winner69]

jeez, thread gone very quiet - only a couple posts by snigma over the last week and the rest silent

We all contented abd waiting waiting for something to happen

[snigmac]

There is no real activity atm. The current position is that: people like Sophie, Sky is on track for a turn around, there will be a capital return and/or dividend and the sale of the property has been completed. Now we are just waiting.. if all goes well (it hopefully will go well) we should be quite happy next month. There is only a small chance that things could go wrong and I don't think Sophie will let that happen in her first year or so :)

[winner69]

Apologies to MistaTea

Some how he ended up on Ignore ..... goodness knows how that happened ....must have clicked on wrong name when ignoring somebody else

All fixed now ....and I can catch up with whats been going on with SKY .... and a 3 buck share price

Soory mate

[mistaTea]

https://www.rnz.co.nz/news/business/463837/high-demand-from-electronics-makers-sparks-computer-chip-shortage

Chip shortage could be why we haven’t heard anything about the new STB…

[mistaTea]

Sky My Account only partially working as they have taken down some of the widgets (for development I presume).

Anyway, while the site is in the process of being updated, I noticed a placeholder for a Vodafone TV discount it seems.

13744

They must have struck a deal with Vodafone to give a discount to ex Vodafone TV customers. Great news if this is the case as we want to retain all of them and have them switch to the new STB.

It looks like Sky have already taken over the billing for Vodafone TV customers as of 1 March 2022. Also good, as it makes it more likely to retain those customers if we form the relationship early.

13745

[winner69]

At least Sky kept the the snooker …great watching …Ronnie is the man

[mistaTea]

At least Sky kept the the snooker …great watching …Ronnie is the man

missusTea is pretty good at snooker.

The way she whacks those balls of mine around…

[mistaTea]

https://simplywall.st/stocks/nz/media/nzx-skt/sky-network-television-shares/news/sky-network-televisions-nzseskt-performance-is-even-better-t

One of the things that immediately attracted me to Sky, and something I have been banging on about for years...GAAP earnings understate Earning Power/FCF significantly.

[Joshuatree]

At least Sky kept the the snooker …great watching …Ronnie is the man

I've been enjoying some of the cycle races in Europe with kiwis even winning stages,almost rarer then rocking horse droppings! Hanging out for the big one.

[stoploss]

I've been enjoying some of the cycle races in Europe with kiwis even winning stages,almost rarer then rocking horse droppings! Hanging out for the big one.
The closest I believe in a Big one ( individually) was Jack Bauer in the 2014 TDF 222 Km break , and he got reeled in on the finishing straight ....
https://www.cyclingnews.com/news/bauer-heartbroken-to-miss-tour-de-france-stage-win-at-nimes/

[snigmac]

Global fear of rising interest rates has definitely put a damper on things... there is still hope of $3 soon.

[Sideshow Bob]

Global fear of rising interest rates has definitely put a damper on things... there is still hope of $3 soon.

Looking sub-$2.50 before then.....

[Habits]

Looking sub-$2.50 before then.....

The volume is up a bit today.... but and here is the good part, so is the price. Nice one

[uravgtrader]

Wonder what caused that spike.

[DeathByWarriors]

I topped up again this morning. Looking forward to next month's lolly scramble

[snigmac]

Neon should get a further bump to its subscriber count this Q3/Q4 due to the release of the Game of Thrones Prequel series :D.

[Almost-confused]

Looks like we had to open the wallet to keep the NRL in the last negotiations. But wrapped up until 2027


"Speaking to the Sydney Morning Herald on Saturday Abdo said the traditional case against a second team from New Zealand - that it would not bring significant revenue to the league - is now moot after the NRL's recent broadcasting deal with Sky NZ saw TV rights income increase 70 per cent to over $30m a year until the end of 2027."

[mistaTea]

Looks like we had to open the wallet to keep the NRL in the last negotiations. But wrapped up until 2027


"Speaking to the Sydney Morning Herald on Saturday Abdo said the traditional case against a second team from New Zealand - that it would not bring significant revenue to the league - is now moot after the NRL's recent broadcasting deal with Sky NZ saw TV rights income increase 70 per cent to over $30m a year until the end of 2027."


Well, its a damn good thing SM and the team are cutting more costs and growing revenue then :t_up:

[Sideshow Bob]

Lucky there is a few other NRL games to watch. God knows why anyone would want to watch the Warriors. :confused:

[mistaTea]

I see Spark's largest shareholder - Chris Keall - is going hammer and tongs this morning to put some good Spark Sport vibes out there...he lost sleep when Spark lost the Premier League and he thought the service was gonna shut!!

https://www.nzherald.co.nz/business/streaming-wars-spark-sport-extends-uefa-deal-for-euro-2024-and-2028/SVTNAPYRQ3RDHIPHRY6OG3AVPY/

https://www.nzherald.co.nz/business/game-of-thrones-on-wheels-netflixs-drive-to-survive-provides-boost-for-spark-sport/2GCH2LNK3UCTTCI6B2PCEZDLNI/

[mistaTea]

https://www.nbr.co.nz/story/unseasonably-busy-q1-ma-advisers-says-pwc-report?utm_medium=email&utm_source=Heads%20Up

Deals galore! But nothing for Sky.

I do hope we aren't paying Jarden a material amount of money for their 'services'. They have turned out to be as useful as tits on a bull.

https://www.nzherald.co.nz/business/nz-ma-activity-still-high-despite-inflation-supply-chain-headwinds-pwc/32YNO64KAJWYQRP5QFOS57LMNU/

"The technology, media and telecoms (TMT) sector continued to see the most activity, while financial services and industrials and chemicals also featured prominently.TMT (14 deals) accounted for almost a third of all activity during the quarter.
Nine of the 45 deals announced during Q1 2022 involved a private equity buyer."

[Moneyman]

Time to top up at $2.38? What date is the investor day does anyone know?

[snigmac]

Time to top up at $2.38? What date is the investor day does anyone know?

On or around 29 June. I've been buying a few shares every now and then. In my opinion it is at a good price to buy, but my entry price is alot lower.

[Moneyman]

My average entry is $1.80 and I’ve just sold a property… plenty of time to continue to accumulate then.

What’s the expectation of a dividend 10 cents per share?

[Sideshow Bob]

What’s the expectation of a dividend 10 cents per share?

Along with some sort of capital return, most are expecting more than 10c......but uncertain times and just have to wait.....

[BigBob]

As per today's announcement - decision deferred to August... This is truly one for the patient ones...!

[Mel]

As per today's announcement - decision deferred to August... This is truly one for the patient ones...!
very disappointing!

[Habits]

Along with some sort of capital return, most are expecting more than 10c......but uncertain times and just have to wait.....


A dividend has been promised for this FY so I do not think the directors can walk that back easily. I hope it's a good one but you know they tread cautiously.

Btw congrats on the sale and what was your experience of the prpty market

[The diver]

I sure hope not.... I find every important announcement from sky has me waiting for the next announcement for any certainty about their decisions. How long could they string us shareholders along?


Yes they have stated June and they will not move from this date (my post was meant to be tongue in cheek).


I find myself in a forever cycle of deja vu with Sky saying they will announce their plan this date and then delaying announcing anything so this certainly does not surprise me

[mistaTea]

I find myself in a forever cycle of deja vu with Sky saying they will announce their plan this date and then delaying announcing anything so this certainly does not surprise me

I think this is good news.

Sky must still be on track to meet earnings guidance or else they would announce to the market it's all gone to sh1t (and we could infer that they are hoarding cash because we are back on Struggle Street).

But that is not what the announcement says. It says:

"In the context of the previously referenced review of investment opportunities, Sky NetworkTelevision Limited advises it is deferring any further update on strategy and capital allocation..."

In my earlier posts I went to great pains to point out that we don't (or shouldn't) want Sky to return cash to us if the cash can better be used to grow the business.

Only if there are no other great investment opportunities should we then seek buybacks and dividends (in that order).

So, either Sky is looking to make a material investment (buy something?) and we just hope it isn't another dog like Rugby Pass...

OR...and infinitely more likely...they are going to sell the business.

[jimdog31]

I think this is good news.

Sky must still be on track to meet earnings guidance or else they would announce to the market it's all gone to sh1t (and we could infer that they are hoarding cash because we are back on Struggle Street).

But that is not what the announcement says. It says:

"In the context of the previously referenced review of investment opportunities, Sky NetworkTelevision Limited advises it is deferring any further update on strategy and capital allocation..."

In my earlier posts I went to great pains to point out that we don't (or shouldn't) want Sky to return cash to us if the cash can better be used to grow the business.

Only if there are no other great investment opportunities should we then seek buybacks and dividends (in that order).

So, either Sky is looking to make a material investment (buy something?) and we just hope it isn't another dog like Rugby Pass...

OR...and infinitely more likely...they are going to sell the business.

Wouldn't that be marked Price sensitive??

[LaserEyeKiwi]

One wonders if Sky is a little worried about the giant amount of funding TVNZ/RNZ received in yesterdays budget ($350 million+)

[mistaTea]

Looking back into 'ancient history' I note that in 2016 Sky released a price sensitive announcement (https://www.nzx.com/announcements/281891) to advise that there had been a material drop in Pay TV subs (45K).

So if subs/earnings had deteriorated in a material way from consumers cutting back spending I would have expected that information to be part of the announcement today. But it wasn't and so I think the reason for holding on to the cash is unlikely due to that.

LEK mentions the TVNZ/RNZ merger...no doubt Sky, NZME and Discovery NZ are watching this closely...but I doubt this has anything to do with the announcement today either. The merger is old news, and we have known that the new entity will be 100% backed by taxpayer dollars...the $350M (which will be spent largely on merging operations and building out new platforms across TV and radio) is not enough of an 'event' to cause Bowman to not distribute ANY of the cash. If this was the reason for additional caution, I would think that Sky would still return some of the $150M (even if they decided to hang on to the vast majority of it).

So although it is speculative, I do believe that 'something' (M&A) is more likely in the works. What that is (if anything) we will have to wait and see.

My personal view is that someone is more likely to make a cash offer to buy Sky (as opposed to Sky doing some kind of acquisition). Plenty of overseas cash still looking to invest: https://www.nzherald.co.nz/business/nz-ma-activity-still-high-despite-inflation-supply-chain-headwinds-pwc/32YNO64KAJWYQRP5QFOS57LMNU/

[jimdog31]

Looking back into 'ancient history' I note that in 2016 Sky released a price sensitive announcement (https://www.nzx.com/announcements/281891) to advise that there had been a material drop in Pay TV subs (45K).

So if subs/earnings had deteriorated in a material way from consumers cutting back spending I would have expected that information to be part of the announcement today. But it wasn't and so I think the reason for holding on to the cash is unlikely due to that.

LEK mentions the TVNZ/RNZ merger...no doubt Sky, NZME and Discovery NZ are watching this closely...but I doubt this has anything to do with the announcement today either. The merger is old news, and we have known that the new entity will be 100% backed by taxpayer dollars...the $350M (which will be spent largely on merging operations and building out new platforms across TV and radio) is not enough of an 'event' to cause Bowman to not distribute ANY of the cash. If this was the reason for additional caution, I would think that Sky would still return some of the $150M (even if they decided to hang on to the vast majority of it).

So although it is speculative, I do believe that 'something' (M&A) is more likely in the works. What that is (if anything) we will have to wait and see.

My personal view is that someone is more likely to make a cash offer to buy Sky (as opposed to Sky doing some kind of acquisition). Plenty of overseas cash still looking to invest: https://www.nzherald.co.nz/business/nz-ma-activity-still-high-despite-inflation-supply-chain-headwinds-pwc/32YNO64KAJWYQRP5QFOS57LMNU/

If PE had a nibble at $2.30 back in the day, what is it now worth to that same crowd (if they were still interested) with the $150m?

[mistaTea]

If PE had a nibble at $2.30 back in the day, what is it now worth to that same crowd (if they were still interested) with the $150m?

With the strong Balance Sheet, STB base stabilisation, streaming growth and FCF I would suggest 50% more.

That would be about a 43% premium to the current SP (within the typical 30 - 50% range, but at the higher end).

Some of us believe Sky is worth more than $600M, but the reality is the public markets are never going to value Sky for what she should theoretically be worth in her current state (solely a content aggregator).

I think a $600M price is also favourable to the buyer as they are effectively purchasing Sky's operations for only $450M. There has to be a decent upside for them to want to buy.

So they get the business for a very good price, and shareholders get certainty (~$3.40 per share) after what has been a very turbulent past few years.

It would be nice if The Board (and Jarden) could get multiple parties interested to negotiate a higher price of course. But I wouldn't hold my breath!

[xafalcon]

One wonders if Sky is a little worried about the giant amount of funding TVNZ/RNZ received in yesterdays budget ($350 million+)
I think they would be equally worried about their Discovery content, now that they are competitors. Rush TV has a lot of Discovery content, and the Aussie version, also called Rush on the Ch9 network, has even more. As exclusive committments with Sky TV expire, they may not be rolled over

[Moneyman]

Anyone think the delay in the deal between NZR and Silver Lake are related to these delays? Seems like too much of a coincidence….

[bottomfeeder]

Anyone think the delay in the deal between NZR and Silver Lake are related to these delays? Seems like too much of a coincidence….

No doubt something going on involves SKY.

[snigmac]

I'm also of the opinion that Sky TV, Silver Lake and NZR will have some kind of deal playing out these coming months.

Just a gut feeling.

[mistaTea]

I'm also of the opinion that Sky TV, Silver Lake and NZR will have some kind of deal playing out these coming months.

Just a gut feeling.

I pray to God Sky are not buying anything, let alone a piece of CommercialCo. I can't see how we would ultimately benefit from that. Sky TV benefit from our relationship with NZR so long as we are able to continue renewing the rugby rights at a 'reasonable' price (i.e. a price that we can still earn a living from). If we owned a slice of CommercialCo we would be in a bizarre situation whereby on one hand we want to pay as little as possible to renew NZR, but on the other hand we want NZR to go out to market and get the highest possible bid to maximise CommerciaCo revenue.

It doesn't make any sense.

And when we consider the RugbyPass fiasco, we really don't want Sky going out to buy anything. What are the odds that they would make a good purchase 'this time'?

Given the fact that the Investor Day was cancelled, I think it is much more likely that Sky TV is the target of some kind of a deal. If Sky were looking to buy something, I don't see why they would cancel the Investor Day at the last minute? You would still have it to front up to shareholders about strategy and just say that you are still actively assessing opportunities and will have more to say by the FY results, "in the meantime this is the new date for the STB roll out, it was delayed due to an international chip shortage (not our fault!), these are the other things we are doing to deliver on the strategy blah blah blah..."

But to just cancel it out of the blue right at the last minute? It seems more likely to me that Sky are in discussions (brokered by Jarden I assume) to assess M&A possibilities. The conversations aren't at the stage that warrant an announcement to the market, but are warm enough to make The Board think there is a good chance that 'something' will come out of talks.

If Jarden are doing their job properly then there should be multiple interested parties looking at options with Sky. An outright takeover by PE is one option, or perhaps even an outfit like Comcast could want to become a 'cornerstone' type investor whereby they pay us $x to take a large equity stake in the business with the guarantee of preferrential content deals moving forward. Personally, I would think that an outright sale would be the easiest/cleanest.

As I was thinking this through, I started to remember our good friends at NZME. With the TVNZ-RNZ merger going ahead, Michael Boggs must surely be taking a harder look at Sky. And when you add to the mix the fact that Osmium own big chunks of shares in SKT and NZM, you would have to think that they would like to see something happen here. When I first considered this merger a while back I balked because of my initial perception that the quoted values for each company are 'out of whack'. And they are, but maybe not to as much of an extent as I initially thought.

In fact, Michael B could probably put together a compelling argument that NZM shares are also undervalued too.

One way to get a 'fair deal' done would be to merge the two businesses based on current market valuations but allow Sky to pay some of their cash to existing SKT shareholders as a special dividend. That kind of deal would probably get over the line with SKT shareholders, and NZM may be willing to throw a bone to get the deal over the line if the alternative is that Sky is considering offers from PE.

So, then we look ahead at the merged SKT-NZM business:



A very large multi-platform NZ media play across Pay TV, newspaper and radio
Backed up with broadband and content deals with Google and Meta
~$1B in combined Revenue
NPAT likely ~$70M
FCF also likely around $70M
A better, stronger business - if the market liked it better than the two separate entities, and gave a PE of 15 you are looking at a $1B business. At the time of doing the merger, the business would be valued at only $700M based on prevailing market values, so the potential upside for SKT and NZM shareholders is high.
No cash borrowings required to 'fund' the deal. Straight merger based on SKT and NZM share price.
At current valuations, Sky could issue 105M new SKT shares for NZM holders. $1B quoted value divided by 280M total SKT shares = $3.57/share with growth potential.
No issues with regulatory approval given the TVNZ-RNZ merger


Let's say Sky could pay a special dividend of $50M (29cps) to current shareholders, then the new merged entity would hit the ground running with $100M cash and zero debt. Sky should be able to negotiate a higher special dividend quite frankly (especially given NZM is currently distributing its capital to shareholders via a buyback).

Anyway, all well and truly deep in the world of speculation. Just reaffirming my position that I believe Sky are in talks (whereby Sky is most likely the target) and the NZME angle is a possibility.

[jimdog31]

I pray to God Sky are not buying anything, let alone a piece of CommercialCo. I can't see how we would ultimately benefit from that. Sky TV benefit from our relationship with NZR so long as we are able to continue renewing the rugby rights at a 'reasonable' price (i.e. a price that we can still earn a living from). If we owned a slice of CommercialCo we would be in a bizarre situation whereby on one hand we want to pay as little as possible to renew NZR, but on the other hand we want NZR to go out to market and get the highest possible bid to maximise CommerciaCo revenue.

It doesn't make any sense.

And when we consider the RugbyPass fiasco, we really don't want Sky going out to buy anything. What are the odds that they would make a good purchase 'this time'?

Given the fact that the Investor Day was cancelled, I think it is much more likely that Sky TV is the target of some kind of a deal. If Sky were looking to buy something, I don't see why they would cancel your Investor Day at the last minute? You would still have it to front up to shareholders about strategy and just say that you are still actively assessing opportunities and will have more to say by the FY results, "in the meantime this is the new date for the STB roll out, it was delayed due to an international chip shortage (not our fault!), these are the other things we are doing to deliver on the strategy blah blah blah..."

But to just cancel it out of the blue right at the last minute? It seems more likely to me that Sky are in discussions (brokered by Jarden I assume) to assess M&A possibilities. The conversations aren't at the stage that warrant an announcement to the market, but are warm enough to make The Board think there is a good chance that 'something' will come out of talks.

If Jarden are doing their job properly then there should be multiple interested parties looking at options with Sky. An outright takeover by PE is one option, or perhaps even an outfit like Comcast could want to become a 'cornerstone' type investor whereby they pay us $x to take a large equity stake in the business with the guarantee of preferrential content deals moving forward. Personally, I would think that an outright sale would be the easiest/cleanest.

As I was thinking this through, I started to remember our good friends at NZME. With the TVNZ-RNZ merger going ahead, Michael Boggs must surely be taking a harder look at Sky. And when you add to the mix the fact that Osmium own big chunks of shares in SKT and NZM, you would have to think that they would like to see something happen here. When I first considered this merger a while back I balked because of my initial perception that the quoted values for each company are 'out of whack'. And they are, but maybe not to as much of an extend as I initially thought.

In fact, Michael B could probably put together a compelling argument that NZM shares are also undervalued too.

One way to get a 'fair deal' done would be to merge the two businesses based on current market valuations but allow Sky to pay some of their cash to existing SKT shareholders as a special dividend. That kind of deal would probably get over the line with SKT shareholders, and NZM may be willing to throw a bone to get the deal over the line if the alternative is that Sky is considering offers from PE.

So, then we look ahead at the merged SKT-NZM business:



A very large multi-platform NZ media play across Pay TV, newspaper and radio
Backed up with broadband and content deals with Google and Meta
~$1B in combined Revenue
NPAT likely ~$70M
FCF also likely around $70M
A better, stronger business - if the market liked it better than the two separate entities, and gave a PE of 15 you are looking at a $1B business. At the time of doing the merger, the business would be valued at only $700M based on prevailing market values, so the potential upside for SKT and NZM shareholders is high.
No cash borrowings required to 'fund' the deal. Straight merger based on SKT and NZM share price.
At current valuations, Sky could issue 105M new SKT shares for NZM holders. $1B quoted value divided by 280M total SKT shares = $3.57/share with growth potential.
No issues with regulatory approval given the TVNZ-RNZ merger


Let's say Sky could pay existing shareholders a special dividend of $50M (29cps) to current shareholders, then the new merged entity would hit the ground running with $100M cash and zero debt. Sky should be able to negotiate a higher special dividend quite frankly (especially given NZM is currently distributing its capital to shareholders via a buyback).

Anyway, all well and truly deep in the workd of speculation. Just reaffirming my position that I believe Sky are in talks (whereby Sky is most likely the target) and the NZME angle is a possibility.

My goodness, I truly hope you are right.

The combined entity could then itself find itself a more favourable takeover target, cos who doesn't like a good integrated media business with FCF?

[mistaTea]

My goodness, I truly hope you are right.

The combined entity could then itself find itself a more favourable takeover target, cos who doesn't like a good integrated media business with FCF?

Perhaps.

All I know is there is a good argument that both businesses are undervalued, produce solid FCF and would be stronger together. It would be very strange (and disappointing) if Sophie and Michael weren't talking to see what is possible in light of the TVNZ-RNZ merger.

If Private Equity are in the mix and offer a more attractive cash offer to buy Sky then that is A-OK too.

But a deal with NZM, structured in the right way, could be fair too all parties and still leave Sky TV as a listed business but with much better prospects moving forward.

[jimdog31]

Penny for your thoughts Johnnythehorse???

[JohnnyTheHorse]

Chart is saying $3.50 very very soon. Stop reading here Mistatea.

Chart has broken down on shorter timeframes, coinciding with a breakdown in the general NZX50 index. The $2.35 region held (very good buying area for those accumulating), so this could be seen as healthy monthly consolidation (but with shorter term red flags) at this stage. Certainly has some work to do to regain a strong bull status. Won't be seeing $3.50 soon unless we get an announcement (which ultimately is going to drive price anyway). Lack of liquidity seems to move the price around quite rapidly.

Could speculate what's going on behind the scenes, but I couldn't really add anything new. Just a waiting game to see what happens.

Disc: haven't touched my position, happy holder.

[Monarch]

I think it is also noteworthy that the chairman of the board does not even live in the country anymore. Is it common for NZ company chairpersons to be permanent overseas residents and not be replaced? Why bother replace him if the company is getting bought out, maybe he is chilling in the ComCast offices right now.

[airedale]

The sitution now is the end game which was started by whoever was pulling the strings when the shares were massively diluted. It is no coincidence that Martin Stewart came from th Uk and has returned there and the present chairman does not need to live here anymore.

[mistaTea]

Chart is saying $3.50 very very soon. Stop reading here Mistatea.

Chart has broken down on shorter timeframes, coinciding with a breakdown in the general NZX50 index. The $2.35 region held (very good buying area for those accumulating), so this could be seen as healthy monthly consolidation (but with shorter term red flags) at this stage. Certainly has some work to do to regain a strong bull status. Won't be seeing $3.50 soon unless we get an announcement (which ultimately is going to drive price anyway). Lack of liquidity seems to move the price around quite rapidly.

Could speculate what's going on behind the scenes, but I couldn't really add anything new. Just a waiting game to see what happens.

Disc: haven't touched my position, happy holder.

Well, I am very disappointed in you Stallion.

I have been waiting all day for your post, hoping that you will be able to say that the various squiggly lines you look at indicate who the buyer of Sky TV is and when we should expect the announcement...

[mistaTea]

The sitution now is the end game which was started by whoever was pulling the strings when the shares were massively diluted. It is no coincidence that Martin Stewart came from th Uk and has returned there and the present chairman does not need to live here anymore.

Ultimately money talks and bullsh1t walks.

Let's just hope that Pooman isn't so incompetent that he can't negotiate a good deal for Sky shareholders.

He has overseen massive wealth distruction since he took the role, so this is probably his opportunity to 'pull it out of the bag' at the end for shareholders. That way when he seeks board roles at other listed companies in the future he can point to what a 'success' his time at Sky was.

Just look at 'dem gainz'...

[Baa_Baa]

Well, I am very disappointed in you Stallion.

I have been waiting all day for your post, hoping that you will be able to say that the various squiggly lines you look at indicate who the buyer of Sky TV is and when we should expect the announcement...

Now you're over-Ogg'ing it MistaTea. ;)

Personally I would consider it an awful outcome if Sky got distracted from the turnaround strategy, which is coming along nicely and I want to see it play out. I think there's a better future for the company and shareholders in staying on the current course, build the company value up and maybe someday a long way in the future entertain M&A.

[mistaTea]

Now you're over-Ogg'ing it MistaTea. ;)

Personally I would consider it an awful outcome if Sky got distracted from the turnaround strategy, which is coming along nicely and I want to see it play out. I think there's a better future for the company and shareholders in staying on the current course, build the company value up and maybe someday a long way in the future entertain M&A.

I have owned shares in SKT for some time now, and for a long time thought the same way as you.

Unfortunately, I have since realised that the public markets are going to continue to be a savage place for Sky TV in her current form. It is so ridiculous that, despite very real progress and a path to growth...she has an EV sitting at $300M or lower.

I am sure if they do a buyback and dividend the SP will lift - but not by anywhere near what people probably expect, or what it should theoretically increase by.

Sky either needs to go private (takeover) and carry on her progress without the glare and noise of the listed market.

Or she needs to transform rapidly and significantly (merger with a telco or NZME type transaction).

If we just continue with the current strategy (a wholesale broadband deal with a new STB) we will be waiting for another decade before we see any major gains. In the meantime, we would also have to live with the various threats that will continue to erode our customer base.

[jimdog31]

Ultimately money talks and bullsh1t walks.

Let's just hope that Pooman isn't so incompetent that he can't negotiate a good deal for Sky shareholders.

He has overseen massive wealth distruction since he took the role, so this is probably his opportunity to 'pull it out of the bag' at the end for shareholders. That way when he seeks board roles at other listed companies in the future he can point to what a 'success' his time at Sky was.

Just look at 'dem gainz'...

If there is no deal, Pooman has to go. How can he effectively chair this board from half way around the world? it is not in the best interests of the shareholders to have a chairman in absentia. The share price has still not reached where it should have, and that is because they have consistently kicked the dividend can down the road, for no good reason. What better way to tell investors we have a viable business than the announcement of a dividend?

If no M&A I would vote for the removal of Pooman.

[mistaTea]

If there is no deal, Pooman has to go. How can he effectively chair this board from half way around the world? it is not in the best interests of the shareholders to have a chairman in absentia. The share price has still not reached where it should have, and that is because they have consistently kicked the dividend can down the road, for no good reason. What better way to tell investors we have a viable business than the announcement of a dividend?

If no M&A I would vote for the removal of Pooman.

I agree.

This is his last chance to do something good.

If it is something stupid like buying Spark Sport we riot.

He needs to sell Sky or merge with someone on favourable terms. That’s it.

If he can’t get a deal done from where sky is now in the transformation journey then I agree he should resign. No way can he be an effective chairman ongoing from his Country Manor in England.

[mistaTea]

Now you're over-Ogg'ing it MistaTea. ;)



I should also point out that, at this junction we need Ogg more than ever :D If all of his money isn't tied up in the house he wanted to build hopefully he bought back in.

I suppose one key difference (in my mind, while I quickly try to justify myself) between Ogg and I...is that Ogg was hoping that Sky TV would be sold when she was trading at an all time low of 10cps for anything above 16cps. He didn't care at all for fundamentals, he just wanted a 'quick gain' as soon as possible.

I don't share that way of thinking. Sky were right to stay the course at that point, get some runs on the board and turn things around.

And I continue to give the team credit for getting us to where we are now. They continue to cut costs while delivering on initiatives that will grow revenue. Broadband should be a key focus to make as many of our high ARPU STB customers as sticky as possible. Meanwhile, offering attractive streaming packages continues to be a big growth area.

But, despite all of that very good work - the SP continues to languish. The environment in the public markets for companies like SKT are so hostile that Foxtel even had to abandon their IPO ambitions, despite showing clear and tangible progress in their transformation journey (just like Sky).


Sky TV is in a much stronger position to negotiate a good deal today than they were a year ago. They are much further on the transformation journey, have an incredibly strong Balance Sheet, and have key rights deals locked up for years to come. During this period of 'relative tranquility' is the time for Sky to get Jarden to do their job and find the maximum number of interested parties for M&A and get the best deal for shareholders.

If they don't get a deal done now, and Sky TV stay in their current form (but with a new STB and a few broadband customers) I think the markets will continue to take a dim view of Sky TV. They will probably sustain a dividend over the next few years of $25M-$30M. But then the marke will expect a high yield given the current inflationary environment and the perceived risk of owning SKT. So even if Sky sustain a $30M divvy, if the market expects a 7-8% yield then you will be lucky to maintain a $400M market cap.

So Sky either need to merge with a telco, NZME or Foxtel...or they need to sell to Private Equity so they can come in, make the necesary changes to boost value and then sell or merge Sky with a telco, Foxtel or NZME.

Sky has to change faster and more aggressively. The current Board simply are not up to the job, so I do think it is time to sell and let someone else do what is needed.

If Jarden are doing their job and have brought multiple parties to the table for a takeover scenario, then we should expect a sale price higher than $3.50/share. A very good result, all things considered.

If it is a merger scenario, then they need to think outside the square on how to get that over the line (special dividend etc).

So long as Sky don't have any kind of asinine notion in their head that they should be buying something, I think we get out of this one alive.

[LoungeLizzard]

deletedelete

[Baa_Baa]

But, despite all of that very good work - the SP continues to languish. The environment in the public markets for companies like SKT are so hostile that Foxtel even had to abandon their IPO ambitions, despite showing clear and tangible progress in their transformation journey (just like Sky).

...

So long as Sky don't have any kind of asinine notion in their head that they should be buying something, I think we get out of this one alive.

I suppose you've noticed that we've had two years of screwed up market conditions, and now high inflation and a global recession looming? Considering that, I think the market has been quite generous to SKT in giving and retaining most of the recent gains. That might not last though, as factors unrelated to Sky are being priced in broadly across the whole market.

Trying to accelerate the SKT turnaround by having them bought out or some other M&A probably isn't a good idea IMO, best to have a strong market if you want the best outcome. Just note the global IPO's that are being cancelled, as an indicator. SKT are not a distressed seller and even if they are a target for acquisition due to relatively low cap value, I certainly would not give it my vote in the current market environment.

$3.50 for a terminal exit would be a lousy outcome for anyone except a short term trader IMO. Roughly 30-50% over your average price, or even double, for all the years you've been involved and all you've said? Such a low bar, I'm surprised at you losing the faith in the turnaround strategy and hoping for an early exit.

I do agree that it would be a tragic outcome if Sky bought some dumb asset, especially as that is not and has never been part of the turnaround strategy. I disagree completely that the Board are useless (yeah, the Chair maybe) and need to be replaced, let's just get the capital management and shareholder returns restarted then reassess the market and Sky's turnaround and future prospects.

I guess the difference between our views might be at a fundamental level, that I don't buy equity assets just to sell them later at a capital gain? I try to buy a forever asset that has extraordinary cashflows, profits and distributions that pay off my acquisition price and earn an annuity income, forever. SKT only differed because of the high risk of an early entry and potential to fail completely. That's why I like the turnaround strategy, especially that it's working.

[JohnnyTheHorse]

Well, I am very disappointed in you Stallion.

I have been waiting all day for your post, hoping that you will be able to say that the various squiggly lines you look at indicate who the buyer of Sky TV is and when we should expect the announcement...

I hope you appreciate I am just a horse.

Pooman and Sophie have gutted the business to cut costs. They are trying to beat PE at their own game so that we can all laugh our way to the bank.

[mistaTea]

I suppose you've noticed that we've had two years of screwed up market conditions, and now high inflation and a global recession looming? Considering that, I think the market has been quite generous to SKT in giving and retaining most of the recent gains. That might not last though, as factors unrelated to Sky are being priced in broadly across the whole market.

Trying to accelerate the SKT turnaround by having them bought out or some other M&A probably isn't a good idea IMO, best to have a strong market if you want the best outcome. Just note the global IPO's that are being cancelled, as an indicator. SKT are not a distressed seller and even if they are a target for acquisition due to relatively low cap value, I certainly would not give it my vote in the current market environment.

$3.50 for a terminal exit would be a lousy outcome for anyone except a short term trader IMO. Roughly 30-50% over your average price, or even double, for all the years you've been involved and all you've said? Such a low bar, I'm surprised at you losing the faith in the turnaround strategy and hoping for an early exit.

I do agree that it would be a tragic outcome if Sky bought some dumb asset, especially as that is not and has never been part of the turnaround strategy. I disagree completely that the Board are useless (yeah, the Chair maybe) and need to be replaced, let's just get the capital management and shareholder returns restarted then reassess the market and Sky's turnaround and future prospects.

I guess the difference between our views might be at a fundamental level, that I don't buy equity assets just to sell them later at a capital gain? I try to buy a forever asset that has extraordinary cashflows, profits and distributions that pay off my acquisition price and earn an annuity income, forever. SKT only differed because of the high risk of an early entry and potential to fail completely. That's why I like the turnaround strategy, especially that it's working.

When I buy into a business I am certainly not speculating on a 'quick gain'. I view myself as a business partner and also ideally want to buy a business that I never ever have to sell. Something with a sustainable economic moat that will compound returns for many years to come. In fact, if it can cannibalise itself over time too even better to boost my ownership % and returns.

But continuing to hold an asset with this 'forever' notion is risky if you can see that things have changed. You do need to periodically reassess.

And I am pointing out that despite the very real progress Sky has made in a lot of different areas, she can't catch a break. Yes the SP is up 40 odd percent from a year ago, but that is coming from a very low bar (and when you deduct the cash position from the SP to look at it from an EV perspective that 'gain' in market vauation is actually much much lower). I realise now that, no matter what Sky does, the markets will never give her full credit. There will always be this notion that it will all come crashing down in a few years once negotiations for rugby, HBO etc come up.

Continuing as she is (primarily a content aggregator) means that shareholders will continue to hold an asset that is undervalued relative to her theoretical valuation based on DCF. I am not saying the SP can't continue to climb - I am sure it will go up somewhat if they do a buyback and a dividend. But I have just come to realise that it won't go up to anywhere near what people might expect. Not while she is in her current form anyway.

They have solid earnings and a clean Balance Sheet which should make Sky attractive to a number of suitors. In that context, Sky would be negotiating from a position of relative strength (despite the overall noise in the general market).

Given where things stand, and how SKT fares as a listed business (bearing in mind Foxtel - a bigger company further ahead on essentially the same transformation journey - was not even able to list because the appetite for content aggregators on the public markets is not there) if an offer came in at $3.50+ per share I think it would be crazy not to take it and move on.

[Getty]

Given where things stand, and how SKT fares as a listed business (bearing in mind Foxtel - a bigger company further ahead on essentially the same transformation journey - was not even able to list because the appetite for content aggregators on the public markets is not there) if an offer came in at $3.50+ per share I think it would be crazy not to take it and move on.

Is that you OGG?

[Baa_Baa]

Is that you OGG?

Seems like it, MistaTea the long time advocate has left the room. Ogg sell the lot and make a short term profit has inherited the shell. We're all ****ed. Unless they're wrong, which one of them has been all along, but the other has not, yet.

[jimdog31]

Seems like it, MistaTea the long time advocate has left the room. Ogg sell the lot and make a short term profit has inherited the shell. We're all ****ed. Unless they're wrong, which one of them has been all along, but the other has not, yet.

or an alternate view, maybe the fact that Mista has come to this point should be an indicator that this ship really has run its course. It will never reach where it should be valued until someone is acquiring it.

Mista has been SkT number one fan since 2017, thats some staying power given the rollercoaster the shareprice has ridden in that time. I think hes earned the right to call time.

If there are longer standing shareholders than that on here, who have held longer please let us know your thoughts. I suspect theyve all bailed a long time ago.

[snigmac]

Make up your mind MT. One minute you want Sky to buy something, next minute you don't.

I think there a synergies that can be unlocked by a Sky, NZR and Sl (CommercialCo) tie up. Sky would have a moat for Rugby rights in NZ. There would be multi party mutual benefit via the creation and sharing of local Rugby. I can see this fitting and cementing long term growth plans for Sky and making it a more valuable and attractive target for acquisition in the future.

[mistaTea]

Seems like it, MistaTea the long time advocate has left the room. Ogg sell the lot and make a short term profit has inherited the shell. We're all ****ed. Unless they're wrong, which one of them has been all along, but the other has not, yet.

I don't really see the parallels. Ogg didn't care about the underlying business or the mertis of Sky...he just wanted a quick gain so would have been happy for Sky to be sold during the bottom when the pandemic hit.

I am pointing out that it is very clear to me, after a lot of experience with Sky that she will never be valued at what she should theoretically be valued at (based on a DCF analysis) in her current form. We have witnessed this for a while now where despite her very good progress the market remains very pessimistic. Sky's operations are currently only valued at ~$300m despite the huge progress.

Yes the SP will rise somewhat no doubt if they do buybacks and a dividend...but not as much as people may hope.

What I want for Sky is a more material transformation away from being solely a content aggregator. I am very much open to Sky merging with someone like a telco or NZME, and remaining a listed company.

But given the low quoted value, it is also likely (perhaps more likely) that someone else may want to buy Sky. And if a reasonable offer came in I would not object to it based on some notion that 'she'll be right' once the divvys start etc.

I have watched this company for many years now, and have a large portion of my net worth invested. I would argue that I have learnt more about this business than most as the amount of skin in the game I have motivates me to study the business deeper. It is not on a 'whim' that I have drawn the conclusion that Sky TV (in her current form) should not remain a listed business OR she needs to transform into something bigger to get a better valuation.

[mistaTea]

Only 54 shares traded so far today.

Stallion this is no time for your mind to be wandering on other things!

Gaze into your Palantir and tell me what this Omen portends...

[jimdog31]

I don't really see the parallels. Ogg didn't care about the underlying business or the mertis of Sky...he just wanted a quick gain so would have been happy for Sky to be sold during the bottom when the pandemic hit.

I am pointing out that it is very clear to me, after a lot of experience with Sky that she will never be valued at what she should theoretically be valued at (based on a DCF analysis) in her current form. We have witnessed this for a while now where despite her very good progress the market remains very pessimistic. Sky's operations are currently only valued at ~$300m despite the huge progress.

Yes the SP will rise somewhat no doubt if they do buybacks and a dividend...but not as much as people may hope.

What I want for Sky is a more material transformation away from being solely a content aggregator. I am very much open to Sky merging with someone like a telco or NZME, and remaining a listed company.

But given the low quoted value, it is also likely (perhaps more likely) that someone else may want to buy Sky. And if a reasonable offer came in I would not object to it based on some notion that 'she'll be right' once the divvys start etc.

I have watched this company for many years now, and have a large portion of my net worth invested. I would argue that I have learnt more about this business than most as the amount of skin in the game I have motivates me to study the business deeper. It is not on a 'whim' that I have drawn the conclusion that Sky TV (in her current form) should not remain a listed business OR she needs to transform into something bigger to get a better valuation.

Hear, hear.

My journey has only been since Jun 2020, and I've seen enough in that time to wholeheartedly agree with the above.

[Monarch]

Why do you care if the market doesn't appropriately value Sky? If it keeps making good money and doesn't blow it all on stupid growth initiatives then it will end up in your pocket one way or another no? I only worry about the "keeps making good money" part.

[mistaTea]

Why do you care if the market doesn't appropriately value Sky? If it keeps making good money and doesn't blow it all on stupid growth initiatives then it will end up in your pocket one way or another no? I only worry about the "keeps making good money" part.

No that is not enough.

The business needs to have a market cap more representative of its FCF profile.

Having a low SP means Sky’s shares make for poor currency, which in turn makes meaningful future transactions for growth (acquisitions) less likely.

The company can’t grow meaningfully and so the SP drops further, making it even harder for her to get out of the ditch.

Low quoted value is not a big issue if it is a short term thing. But when the quoted value drops and stays low for long periods of time (years in our case) it is a problem.

[jimdog31]

Why do you care if the market doesn't appropriately value Sky? If it keeps making good money and doesn't blow it all on stupid growth initiatives then it will end up in your pocket one way or another no? I only worry about the "keeps making good money" part.

Well, therein lies the problem, Sky has continuously kicked the "in your pocket" scenario down the road. And also squandered stupid money on things like Rugbypass.

So, the shareprice is a reflection of the markets lack of belief that the leadership & board actually can return money "in your pocket"

So yes i care the market not appropriately valuing sky, because that tells me the board & leadership aren't right.

[mistaTea]

Well, therein lies the problem, Sky has continuously kicked the "in your pocket" scenario down the road. And also squandered stupid money on things like Rugbypass.

So, the shareprice is a reflection of the markets lack of belief that the leadership & board actually can return money "in your pocket"

So yes i care the market not appropriately valuing sky, because that tells me the board & leadership aren't right.

Yes that is a good point too. Sky could have started paying a dividend last year (even if a modest one initially) but The Board keep stalling even though a dividend would help support the SP to some extent. Bowman has said he will pay out 50-80% of adjusted FCF at the FY results, so you have to assume it will be 50% given the desire to hoard cash (from what we can observe in terms of their behaviour).

The sustained low SP has significantly reduced our options. A merger with a business like NZM, for example, should be straightforward. But because of our low SP it is far from straightforward and may well end up being the single biggest factor that prevents such a transformational deal. Now, if you don't like the idea of a NZM merger you may be happy with that...but the same issue applies for anything else.

It would have been impossible to merge with Vocus NZ when they were up for sale. You had a situation where Vocus Group wanted $600M-$700M for the NZ assets and Sky had a market cap at the time hovering around $250M even though Sky produces far more cashflow than Vocus NZ and has a much wider reach in terms of customer numbers. Vocus NZ was essentially just a broadband play.

And so a deal with Vocus NZ would have been impossible because we just couldn't afford it based on our poor SP currency.

If Foxtel picked up the phone today and wanted Sky to do a reverse takeover-merger type transaction our low SP would be a massive hurdle.

So Sky should have many MANY options to exploit in terms of M&A possibilities that Sky could pursue...but it just becomes too damn difficult. Existing shareholders would get wiped out (diluted) as things stand.

This entire issue goes away if Private Equity or someone else make a strong offer to buy Sky outright. They can take her private which will remove a lot of the 'noise' you get from the public markets so that the new owners can continue the existing projects and also implement their own cost saving + growth inititiatives. That then allows them to pursue their own M&A opportunities in the future. If the PE outfit is affiliated with a big content producer (like Atairos's links to Comcast) then all the better in terms of options in the future.

So we have to wait and see what happens after the mysterious announcement. But I am clear in my own mind that:



Sky using the cash to buy something is probably just going to end up destroying shareholder wealth (I would be happy to be proven wrong of course)
Merger would be great, but I would be surprised if that was possible given the poor currency we have interms of SP
Takeover would seem like the most plausible option for Sky going forward. If Jarden do their job and get multiple interested parties to the table there is no reason shareholders cannot be fairly compensated.

[mistaTea]

I'm also of the opinion that Sky TV, Silver Lake and NZR will have some kind of deal playing out these coming months.

Just a gut feeling.

Just coming back to this...

I stand by my comments around questioning the value of SKT buying into CommercialCo along side SL. I mean, what is the benefit? We might own 5% of CommercialCo...but that doesn't guarantee NZR renew with SKT on reasonable terms. In fact, 95% of the ownership in CommercialCo would be by NZR and SL...whose interests might not align with SKT. So our influence on outcomes would be incredibly limited...

But...what if instead SL are looking to invest in Sky TV?? Not sure if they would want to buy Sky outright, but potentially might want to pay $x to take a large percentage of Sky (say, 10%-20% equity).

That could be an interesting deal, because if that was the case then:



We would get another injection of cash + benefit from the expertise of SL; and
It would be in SL's interest to have NZR renew with Sky to maximise gains via Sky's large reach (as opposed to trying to use their own OTT platform).



Another cash injection + NZR being effectively 'locked in' with Sky could lead to a positive shift in market sentiment.

Fun speculation anyway while we 'wait and see'. But this would be a SL/SKT deal that I could understand and see the merit.

[Monarch]

There are quite a few large holders in this stock still, could they be influencing the board away from distributing cash? If there is no dividend/capital return/buyback due to some huge acquisition surely that will have some repercussions for board re-election. We need MistaTea on the board. I'm surprised the SP has held up so well in recent times given the outlook on consumer spending, inflation and the headwinds Netflix is facing.

[Habits]

There are quite a few large holders in this stock still, could they be influencing the board away from distributing cash? If there is no dividend/capital return/buyback due to some huge acquisition surely that will have some repercussions for board re-election.

There could be blood at ASM if no divie. But Sophie as good as guaranteed one this FY. Reports august (?)

[Habits]

Spark v Sky heats up: Inside the battle for the 2023 Rugby World Cup rights
https://www.nzherald.co.nz/sport/spark-v-sky-heats-up-inside-the-battle-for-the-2023-rugby-world-cup-rights/RU2OCKMRBYD6ZTZNQ2U5X2TNTE/

On second thoughts, there goes the divi

[mistaTea]

Spark v Sky heats up: Inside the battle for the 2023 Rugby World Cup rights
https://www.nzherald.co.nz/sport/spark-v-sky-heats-up-inside-the-battle-for-the-2023-rugby-world-cup-rights/RU2OCKMRBYD6ZTZNQ2U5X2TNTE/

On second thoughts, there goes the divi

All the more reason for shareholders to expect Sky to announce some kind of game-changer transaction for the business soon.

If we get to August and its just token buybacks and a divvy after the recent announcement that will not go down well.

Short of a takeover, a big cornerstone investor (like SL as an example) could be just the thing that keeps Sky in the drivers seat.

[mistaTea]

Spark v Sky heats up: Inside the battle for the 2023 Rugby World Cup rights
https://www.nzherald.co.nz/sport/spark-v-sky-heats-up-inside-the-battle-for-the-2023-rugby-world-cup-rights/RU2OCKMRBYD6ZTZNQ2U5X2TNTE/

On second thoughts, there goes the divi

Also, Sky teaming up with TVNZ to pay way over the odds to secure the tournament makes me nervous.

Remember, if Spark/TV3 win it I can guarantee you that most of the 'important' matches will be FTA on 3. Sky Set Top Box customers will get all of those matches. Sky Sport NOW subs can create a ThreeNow account and stream those matches too.

So the equation for Sky has to be "How many matches that Kiwis care about won't be FTA if Spark/3 win it? And how much are those matches worth to us?".

If Spark/3 are bidding for it, and we win it...then we MUST have paid over the odds for it. Not a great way to run a business.

[mistaTea]

https://www.nzherald.co.nz/business/is-it-time-for-spark-to-sell-spark-sport-analyst-says-yes/LSQWTZ53JGSGPXH26Q3Q5WWTH4/

[JohnnyTheHorse]

Sky has consistently said they have great data to support bids, and that they have no problem losing content if it doesn't stack up. Would only really become a problem if another content aggregator picks up a significant amount, with Spark is nowhere near.

[mistaTea]

Sky has consistently said they have great data to support bids, and that they have no problem losing content if it doesn't stack up. Would only really become a problem if another content aggregator picks up a significant amount, with Spark is nowhere near.

Yes, one would hope that commonsense prevails and Sky use their data wisely to ensure they don't pay over the odds.

It would be one thing if we could use content as a loss leader to grow another complimentary service (like broadband, mobile etc), but that is not the case for Sky.

Also, Spark have been trying to do that since their launch and so far to no avail. I think in their last report they actually lost broadband market share.

[Jasemc]

Maybe sky will absorb spark sport. Spark sport is failing. Could this be the delay about capital return.Black caps in England. Test matches. How many viewers. SKY has massive data to know whats worth bidding for and how much. Spark must be losing massive amounts from just the cricket . Hence why they passing stuff onto 3.

[Balance]

You read it here first :

Expect Vocus to make a major announcement soon.

May or may not be related to Sky.

[bottomfeeder]

You read it here first :

Expect Vocus to make a major announcement soon.

May or may not be related to Sky.


When when, I cant wait to offload these at a high, high, high.

[Balance]

When when, I cant wait to offload these at a high, high, high.

Wish I know - just passing on what I heard from a reliable industry source.

[snigmac]

Probably some kind of partnership with Sky to bundle Sky with their products?

[Habits]

Probably some kind of partnership with Sky to bundle Sky with their products?

Two private equity funds 'encouraged' to kick Sky TV's tyres - report
https://www.nzherald.co.nz/business/two-private-equity-funds-encouraged-to-kick-sky-tvs-tyres-report/B5ZHQ3TFTO4HDNQUDATGVQ6PQE/

And a couple of points of interest

*Sky's reps have approached 2 PE funds for a 500m buyout... 16percent increase on Monday's close
*Sky is set to pay a dividend in september, payout of 50 to 80 percent FCF
*First revenue increase since 2016, and 6.1 percent more custs mainly streaming customers

That is 3 points, oh well

[snigmac]

Afr article here https://www.afr.com/street-talk/pe-funds-tune-into-new-zealand-s-sky-network-television-20220530-p5api7

[mistaTea]

Two private equity funds 'encouraged' to kick Sky TV's tyres - report
https://www.nzherald.co.nz/business/two-private-equity-funds-encouraged-to-kick-sky-tvs-tyres-report/B5ZHQ3TFTO4HDNQUDATGVQ6PQE/

And a couple of points of interest

*Sky's reps have approached 2 PE funds for a 500m buyout... 16percent increase on Monday's close
*Sky is set to pay a dividend in september, payout of 50 to 80 percent FCF
*First revenue increase since 2016, and 6.1 percent more custs mainly streaming customers

That is 3 points, oh well

Wholeheartedly agree that Sky TV needs to go private if she can't transform away from solely being a content aggregator. The public markets are just too hostile an environment for businesses like that and, as we have observed time and time again, Sky typically gets very modest amounts of credit (in terms of market sentiment) despite the very real progress she has made.

In a buyout scenario, I also think that shareholders do need to be realistic about what we can get for the business. No point expecting lofty takeover prices (like $4+ per share) based on a theoretical DCF analysis given the state of things.

But...having said that...

$500M?! Jesus Christ, that is only ~$2.85/share (lower than our recent high) and if you deduct the current ~$150M cash balance they would be buying Sky's 1M customers and business operations for only $350M. That would be a truly shocking result especially given Atairos made an opening bid of $400M in early 2021. Atairos would have no doubt lifted their final offer too once they had a chance to look at the books, If Sky only goes for $500M now then I am afraid this Board has actually screwed us yet again - one could argue that we would have been better off to negotiate a better deal over a year ago and take the cash then.

So, at this junction we can only hope for two things (both require Management and a Board that are at least somewhat on the level):



I note the AFR article states a "$500M plus" deal. Lets hope that Sky's bankers used $500M to get these guys in the door and can negotiate a sizeable PLUS to that $500M. After all, the customary 30% premiujm even to our current lows would still be ~$3.20/share ($560Mish).
If Sky does get sold for $500M The Board are able to negotiate some sort of special dividend to shareholders. They have given us no reason to believe that they are capable of any such negotiation, but we can live in hope.


So yeah, mixed feelings. As I say - I support the idea of taking Sky private, but was alarmed at the reported price tag.

In The Board's defence (and Christ knows they need one after the massive wealth destruction they have overseen) they are taking the 'expert' advice from their bankers. They just need to be a little careful though, because the bankers will be interested in their commission primarily. Whether Sky sells for $500M or $550M is of little consequence to them so long as they get a deal done (though the difference of $50M could mean the world to existing shareholders).

[sb9]

$500mln private equity buyout? they’re dreaming….gotta be at least $600mln+ based on their current metrics.

[Balance]

The $500m mentioned would be net of cash just as any acquisition of a company with debt is net of debt imo.

The critical path to a deal is that Sky’s directors now seem in favour of doing one. That makes it easier for the acquirer.

Anyway, I have an inkling of who one of the PE player is and if it is who I believe it is, a deal will get done sooner rather than later.

[snigmac]

Not sure what to make of this. Firstly, I didn't expect Sky to delay the June capital plan annoucement. I dont see a reason why they needed to (even if a buyout of Sky was on the table). Secondly, the timing of events is questionable. On 20 May, a announcement to delay the June annoucement was made. Now, we have news of Sky pitching for the company to be bought out? This line of events is quite fishy and I'm abit bamboozled... Both points would indicate that the company doesn't have much confidence.

[JohnnyTheHorse]

Ah good old Street Talk, the source of intentional leaks. Probably a leak tactic from Jarden to bump the share price up before initial bids come in.

[mistaTea]

Removed post.

[mistaTea]

Not sure what to make of this. Firstly, I didn't expect Sky to delay the June capital plan annoucement. I dont see a reason why they needed to (even if a buyout of Sky was on the table). Secondly, the timing of events is questionable. On 20 May, a announcement to delay the June annoucement was made. Now, we have news of Sky pitching for the company to be bought out? This line of events is quite fishy and I'm abit bamboozled... Both points would indicate that the company doesn't have much confidence.


Well, clearly the talks were in progress before May 20 for a potential buyout.

I agree with Balance that the good news is Sky are finally ready to discuss a deal at least (wheras last year they rejected Atairos out of hand, no attempt to negotiate from what I heard).

[snigmac]

Abit of a gamble by Sky. If a takeover does not eventuate, shareholders won't be seeing $3 anytime soon.

[mistaTea]

Abit of a gamble by Sky. If a takeover does not eventuate, shareholders won't be seeing $3 anytime soon.

I think a deal will be done soon - they would not have cancelled the Investor Day if discussions weren't serious.

The only question is, what kind of a deal do they do?

If it is $500M but Sky are able to distributure a siezeable chunk of the cash balance to shareholders by way of a special dividend then you would have to say that is probably reasonable given the way things stand.

If it is just $500M (a paltry 15% premium) we riot.

[jimdog31]

Yo SKT, where's the continuous disclosure at? confirm or deny the rumours

[freebee]

Asked for comment about this morning's AFR report, a Sky spokeswoman said: "We don't comment on speculation".

Only speculation at this stage, it is good that is being reported though. so us shareholders have at least some idea of Sky's thinking.
It sound to me like they have had an offer of around 500m and are fishing for more potential buyers to up the ante maybe?

[JohnnyTheHorse]

MIRA/Aware would clearly be a lead contender to shop it out to. KKR also very active in the region.

With this news, I believe a decision was made not to use capital to make investments and instead shop the business around. Presumably they have had at least one informal indicative offer at a level that encouraged them to open it up to market seriously. Hence cancelling the investor day.

[Habits]

6.5 percent rise on opening, can it hold there or advance further or will the initial enthusiasm linger. Whatever happens in the next hours and days I will not be fast to sell any. Am keen to receive a well earned divie first

[mistaTea]

MIRA/Aware would clearly be a lead contender to shop it out to. KKR also very active in the region.

With this news, I believe a decision was made not to use capital to make investments and instead shop the business around. Presumably they have had at least one informal indicative offer at a level that encouraged them to open it up to market seriously. Hence cancelling the investor day.


https://y.yarn.co/aa3842b5-11e7-4c5e-bc64-1087c1240fae_text.gif

[mistaTea]

6.5 percent rise on opening, can it hold there or advance further or will the initial enthusiasm linger. Whatever happens in the next hours and days I will not be fast to sell any. Am keen to receive a well earned divie first

Yes now is not the time to sell.

Sky TV is for sale.

$500M excluding cash would be a fair deal all things considered (and would allow The Board to wholeheartedly justify rejecting the deal last year).

They will either do good by us here or screw the pooch entirely.

[Balance]

Yes now is not the time to sell.

Sky TV is for sale.

$500M excluding cash would be a fair deal all things considered (and would allow The Board to wholeheartedly justify rejecting the deal last year).

They will either do good by us here or screw the pooch entirely.

So call it $650m ($500m t/o + $150m cash)= $3.70 per share.

Think that this could be what the Vocus announcement could be about? Pure speculation on my part.

[airedale]

https://y.yarn.co/aa3842b5-11e7-4c5e-bc64-1087c1240fae_text.gif
Memories of Ogg here.

[mistaTea]

So call it $650m ($500m t/o + $150m cash)= $3.70 per share.

Think that this could be what the Vocus announcement could be about? Pure speculation on my part.

I hope you are right...ultimately I still believe that Sky needs to become a fully fledged telco. That is her path to real growth.

[Habits]

So call it $650m ($500m t/o + $150m cash)= $3.70 per share.

Think that this could be what the Vocus announcement could be about? Pure speculation on my part.

$3.70 eh (Quickly checks his shareholding)... enough to cover fuel costs

[Sideshow Bob]

Nothing like a bit of talk to help the share price....

Up 22c/8.9%.

[Balance]

Nothing like a bit of talk to help the share price....

Up 22c/8.9%.

Says the institutional market buys the story. Some short covering as well?

[Balance]

Asked for comment about this morning's AFR report, a Sky spokeswoman said: "We don't comment on speculation".

Only speculation at this stage, it is good that is being reported though. so us shareholders have at least some idea of Sky's thinking.
It sound to me like they have had an offer of around 500m and are fishing for more potential buyers to up the ante maybe?

Street Talk has tended to be on the mark more often than not - that's why it has huge credibility as a 'source' as well as a 'kite flyer'.

Anyway, everything ties up with Sky being in play and why they have postponed the June announcement.

Happy to be there and watch things unfold.

[Entrep]

https://archive.ph/xb5rh

[mistaTea]

MIRA/Aware would clearly be a lead contender to shop it out to. KKR also very active in the region.

.

If it comes down to MIRA/Aware vs KKR (like it did with the tussle over buying Vocus Group) I do believe MIRA/Aware will win again.

And the reason is that Sky TV is worth more to them than to KKR.

KKR can buy it, strip out some more costs...invest some additional capital to speed up the turnaround etc, and I am sure they would ultimately be able to sell Sky later for more than they paid...but there are limits to that.

Consider Aware/Super on the other hand...

They currently own 2D which has a paper value of $1.7B after the 2D-VocusNZ merger. Let's say after operations are merged you have a $2B business there, but then what? How do you compete against Spark ($9B market cap) in a meaningful way? Unless they develop their own 'secret sauce' to differentiate their bundles from their competitors they will struggle to grow market share in a meaningful way (and will likely remain a $2B business).

Well, adding on Sky TV is an obvious way forward. And if they did a deal whereby they bought Sky for ~$500M (and let shareholders keep the cash) it is a no brainer if it allows 2D to grow substantially:



If they were able to IPO 2D later for $3B then you could say Sky TV was 'worth' $1B to them and they got it half price
More likely if they use Sky to grow a stickier customer base they would end up with an IPO of $4B+ in which case Sky was 'worth' $2B+ and they got an amazing deal


So my point is, MIRA/Aware can ultimately pay more for Sky than the likes of KKR and still end up getting a bargain.

[Habits]

87k on offer and 29k being bid. Still volume is going through at pace, sp is holding

[snigmac]

These numbers are irrelevant. It's going to fall on whether a take over bid comes through or not.

[Balance]

87k on offer and 29k being bid. Still volume is going through at pace, sp is holding

Institutional buyers and retail sellers - sp goes up.

[mistaTea]

https://www.rnz.co.nz/news/business/468205/sky-network-television-refuses-to-comment-on-takeover-speculation

The old clipped "no comment" response from Chris.

Clearly pissed that someone leaked!

[Balance]

https://www.rnz.co.nz/news/business/468205/sky-network-television-refuses-to-comment-on-takeover-speculation

The old clipped "no comment" response from Chris.

Clearly pissed that someone leaked!

Potential takeover activity over at Comvita.

Be there with stocks like Sky & Comvita or miss out!

[Mel]

Potential takeover activity over at Comvita.

Be there with stocks like Sky & Comvita or miss out!
I have SKT, CVT & PPH in my portfolio - the analysts weren't wrong when they stated that M&A activity would be rife with many companies (arguably) undervalued on our exchange

[Balance]

I have SKT, CVT & PPH in my portfolio - the analysts weren't wrong when they stated that M&A activity would be rife with many companies (arguably) undervalued on our exchange

Yup - there’s another very obvious one in my portfolio which I am quietly accumulating.

[mistaTea]

https://www.nzx.com/announcements/393056

CVT address takeover rumours by categorically ruling it out to ensure they comply with listing rules.

I note Sky have not done the same.

Cage gif?

[Old mate]

It's on :t_up::t_up:

[Entrep]

It's on :t_up::t_up:

Let's go brother!

https://media.giphy.com/media/I3EsiEPZWgpqg/giphy-downsized.gif

[Mel]

Yup - there’s another very obvious one in my portfolio which I am quietly accumulating.
Yes, I've got at least two other stocks that should be attracting some interest at their current SP.............we'll wait and see!

[mistaTea]

https://www.nbr.co.nz/speculation-kkr-is-one-of-those-kicking-sky-tvs-tyres-heats-up/

A more comprehensive write up about what is going on.

[winner69]

Mistatea - you ever read 'Barbarians at the Gate'. It's a stone cold classic in which KKR features

Worth a read on a cold winters night ....might try and find my copy

Then again the movie is floating around somewhere

[mistaTea]

Mistatea - you ever read 'Barbarians at the Gate'. It's a stone cold classic in which KKR features

Worth a read on a cold winters night ....might try and find my copy

Then again the movie is floating around somewhere

I did read it...after you mentioned the book some time ago (I think?!), which is what promoted me to grab a copy.

Was a fantastic read and very insightful!

Ross Johnson seemed more concerned about having to give up his private jets than anything else!

[Balance]

Mistatea - you ever read 'Barbarians at the Gate'. It's a stone cold classic in which KKR features

Worth a read on a cold winters night ....might try and find my copy

Then again the movie is floating around somewhere

KKR & RJR Nabisco - legendary tale!

[mistaTea]

KKR & RJR Nabisco - legendary tale!

The amount of backstabbing and bullsh1t that went on was just incredible.

[winner69]

KKR & RJR Nabisco - legendary tale!

I was a negotiation course once and the 'tutor' cited the story has a classic case study in negotiation - I told him it was a great story of corporate greed ..... she didn't like me after that

[mistaTea]

I feel like Bond in Casino Royale right now tied to a chair.

Pooman is the baddie smacking my balls with a rope.

Will I yield in time?

[Muse]

I feel like Bond in Casino Royale right now tied to a chair.

Pooman is the baddie smacking my balls with a rope.

Will I yield in time?

post of the day

[Shareguy]

What ever happens hopefully will still be a listing on NZX. There are too many companies ripe for the picking.

[mistaTea]

What ever happens hopefully will still be a listing on NZX. There are too many companies ripe for the picking.

They would have to issue a tonne of shares to do a reverse takeover type merger of any meaningful assets (my preference being 2D).

The simplest course is the best course usually. And that is for sky to be purchased.

Clean and simple.

Just need to establish fair value + control premium to get the sale price to a value that has a chance in Hell of getting shareholder approval and hey presto! You have a done deal.

[mistaTea]

Very large volume traded today at inflated prices.

I expect Sky will announce a deal within the next few days or else NZX will be issuing a “please explain” notice.

[airedale]

From a customer's point of view it looks like this company is being stripped ready for sale. The phone support has all but disappeared. A few years ago if you rung the help line you got the message that "one of our Kiwi based crew will help you" then immediately or a few moments later you were speaking to a real person. Yesterday I rang about about connecting with Sky Go. So when the phone rang there were 6 0ptions and none of those options put me through to anyone, eventually a voice told me that there would be a 2 hour 40 minute wait in the queue or I could press 1 for a call back. I pressed 1 but after 20 hours I am still waiting for the call back.

[winner69]

Bad service often leads to bad share price

Hope they find a buyer real soon ......before it all turns to custard

Even 3 bucks would be good .....unless sold will never be worth that on future ourlook

[mistaTea]

From a customer's point of view it looks like this company is being stripped ready for sale. The phone support has all but disappeared. A few years ago if you rung the help line you got the message that "one of our Kiwi based crew will help you" then immediately or a few moments later you were speaking to a real person. Yesterday I rang about about connecting with Sky Go. So when the phone rang there were 6 0ptions and none of those options put me through to anyone, eventually a voice told me that there would be a 2 hour 40 minute wait in the queue or I could press 1 for a call back. I pressed 1 but after 20 hours I am still waiting for the call back.

Think more positively!

Clearly they are inundated with New Business enquiries!!!

[Habits]

"Inundated with new business enquiries"
How about this, we have been existing streaming customers for two years ish and of course always paid the monthly account which is direct debit anyway. So I rang sky to upgrade to a STB so I could compare the extras. After answering all the questions over the phone they declined us saying we had bad credit. And they wouldn't tell me anything more. Weirdly they did allow us to continue with streaming which is concerning if we are "a risk". We pay regular accounts worth tens of thousands. It happened a few months ago and haven't investigated this but have not been asked to pay any outstanding bill.

[airedale]

Think more positively!

Clearly they are inundated with New Business enquiries!!!
The first rule of business is to look after your existing customers.

[mistaTea]

The first rule of business is to look after your existing customers.

I was just teasing.

[mistaTea]

"Inundated with new business enquiries"
How about this, we have been existing streaming customers for two years ish and of course always paid the monthly account which is direct debit anyway. So I rang sky to upgrade to a STB so I could compare the extras. After answering all the questions over the phone they declined us saying we had bad credit. And they wouldn't tell me anything more. Weirdly they did allow us to continue with streaming which is concerning if we are "a risk". We pay regular accounts worth tens of thousands. It happened a few months ago and haven't investigated this but have not been asked to pay any outstanding bill.

Mate. Shake yo broke ass on outta here!

Ain’t nobody got time for that!

[airedale]

"Inundated with new business enquiries"
How about this, we have been existing streaming customers for two years ish and of course always paid the monthly account which is direct debit anyway. So I rang sky to upgrade to a STB so I could compare the extras. After answering all the questions over the phone they declined us saying we had bad credit. And they wouldn't tell me anything more. Weirdly they did allow us to continue with streaming which is concerning if we are "a risk". We pay regular accounts worth tens of thousands. It happened a few months ago and haven't investigated this but have not been asked to pay any outstanding bill.


You should check your credit rating, I think that the finance/credit companies have to show you what they have on your file. It is not the first time that they have made a mistake or have mistaken someone's identity.

[airedale]

Deleted post

[winner69]

I followed my post on here with post to Sky web site feed back page. I got an automated reply to say that it could take up to 10 DAYS to get a reply. 10 DAYS! I rest my grumpy case

My mate MO’D says turn your customers into raving fans

StorybaboutvJimmyba bit like yours airdale

Seems unless Sky becomes customer focused again it will always disappoint investors …hope that buyer comes before it’s too late

https://www.stuff.co.nz/business/opinion-analysis/300604221/its-not-enough-to-have-loyal-customers--turn-them-into-raving-fans

[winner69]

Scored a Reward from Sky - 2 free week Rialto

looked through the guide to see the exciting stuff available .... hmm

A film about Matt Busby but Guardian says it's ****

Otherwise Percy v Goliath looked promising but Tomatometer only gave it 75% and that's pretty low score

[Habits]

Thanks Airedale

MT Would actually be easier and better to be broke, to claim all sorts of lovely assistance. If I wait maybe one of the parties will offer free sky subs to vote for them

[mistaTea]

Thanks Airedale

MT Would actually be easier and better to be broke, to claim all sorts of lovely assistance. If I wait maybe one of the parties will offer free sky subs to vote for them

I will head up our own (mista)Tea Party and it will include free sky for everyone…

[Moneyman]

Hopefully the long weekend has allowed SKT to nail down a deal. SL deal now done with NZR and 2D deal done - surely something happens this week?

[mistaTea]

Scored a Reward from Sky - 2 free week Rialto

looked through the guide to see the exciting stuff available .... hmm

A film about Matt Busby but Guardian says it's ****

Otherwise Percy v Goliath looked promising but Tomatometer only gave it 75% and that's pretty low score

Easier to search their entire catalogue using sky go as opposed to the TV guide.

You can set shows to record on your sky box from sky go or stream them on demand.

[mikelee]

what happened to your new thread Mr T? was going to be the first one to post but it'd not save :confused:

[Habits]

I will head up our own (mista)Tea Party and it will include free sky for everyone…

Yep I would give party vote for that... I must be easily bought lol

[Muse]

SKY has exclusivity to ACQUIRE Mediaworks

twist.

[mistaTea]

SKY has exclusivity to ACQUIRE Mediaworks

twist.

Jesus Christ.

Can you share a brief summary of what’s in the AFR article?

[The diver]

https://www.afr.com/street-talk/sky-network-tv-in-late-stage-talks-for-oaktree-s-mediaworks-20220605-p5ar6c

The article doesn't give much more than that. No mention of price or anything
"It is understood Sky Network has emerged as the preferred buyer for Mediaworks, which was put on the block by its owners Oaktree and Australian buyout firm Quadrant Private Equity."

[Muse]

Jesus Christ.

Can you share a brief summary of what’s in the AFR article?

https://www.afr.com/street-talk/sky-network-tv-in-late-stage-talks-for-oaktree-s-mediaworks-20220605-p5ar6c

its easy to get the AFR paywall script to stop from loading. If you are on PC, click on the hyperlink and the milisecond it loads start tapping x on your keyboard as fast as you can. If you are on your iphone, do the same but tap the little x by the URL as fast as you can. may take a few times until you get the hang of it, but then you can read the article.

[Habits]

Can you share a brief summary of what’s in the AFR article?

NZ Herald will have the article up before 10am at least :D

[Muse]

Jesus Christ.

Can you share a brief summary of what’s in the AFR article?

Penny for your thoughts, MrT?

[LoungeLizzard]

https://www.afr.com/street-talk/sky-network-tv-in-late-stage-talks-for-oaktree-s-mediaworks-20220605-p5ar6c

its easy to get the AFR paywall script to stop from loading. If you are on PC, click on the hyperlink and the milisecond it loads start tapping x on your keyboard as fast as you can. If you are on your iphone, do the same but tap the little x by the URL as fast as you can. may take a few times until you get the hang of it, but then you can read the article.

Pressing Esc worked for me.

Without knowing any of the details I'm afraid this might be the worst possible outcome for shareholders. Forget about buybacks and dividends. Forget about any future takeover. And I think the SP will go down on this news, not up. What are they thinking - radio and outdoor advertising? They need to defend their core business and add a telco if they want to have any future. Looks like a monumental error to me if true.

[jimdog31]

https://app.companiesoffice.govt.nz/companies/app/service/services/documents/88171D16EA52B565989962C1A0111E86

Its making a freaking loss currently??

[Shareguy]

Makes sense, Sky will then be able to offer more bang for buck for advertisers with additional radio stations and advertising platforms. Will be some costs that can be taken out. Will be interesting to see the figures on how this stacks up.

$203 m in income . Loss improving

[LoungeLizzard]

https://app.companiesoffice.govt.nz/companies/app/service/services/documents/88171D16EA52B565989962C1A0111E86

Its making a freaking loss currently??

Jesus Christ. Say it's not true....

[The diver]

Now they can advertise sky on radio free too. Perfect to reach their target market.

[LoungeLizzard]

I'm their target market and I don't listen to the radio. Neither do 90% of the younger audience who SKY need to attract.

[winner69]

https://app.companiesoffice.govt.nz/companies/app/service/services/documents/88171D16EA52B565989962C1A0111E86

Its making a freaking loss currently??

Been a while since they made any money

[winner69]

That Sophie is a guru

[winner69]

Be hilarious if it's a reverse takeover ....scheme of arrangement ....like plexure taking over Task lol

Stranger things have happened ....esp with Sky

[jimdog31]

Be hilarious if it's a reverse takeover ....scheme of arrangement ....like plexure taking over Task lol

Stranger things have happened ....esp with Sky

Indeed

Oaktree owns Mediaworks, Brookfield owns Oaktree, Brookfield owns 50% of vodafone....

Did someone say blocking stake?

[snigmac]

Afr article says that negotiations are at a late stage. Not sure what to make of this. If Sky TV buy Mediaworks at a heavily discounted price, I can see value being added. I'm not sure if the entity is worth nzd100m in its current state..

[mistaTea]

Penny for your thoughts, MrT?

I don’t know what to think yet.

Though recent management have not been renowned for their ability to make sound acquisitions…

So there is a certain amount of nervousness.

All depends on what the assets are worth, what we have to pay for it and how the deal is financed (cash vs equity).

[Muse]

Indeed

Oaktree owns Mediaworks, Brookfield owns Oaktree, Brookfield owns 50% of vodafone....

Did someone say blocking stake?

oaktree owns ~60%. Good old Quadrant owns 39.4%.
Mediaworks a private company so will be governed by a shareholders agreement that will require both major shareholders agreement (as directed by their parent companies) on any major transactions

[snigmac]

The TV arm was sold for nzd20m. If Sky can by the rest for nzd 50-75m, is that a good deal?

[mistaTea]

The TV arm was sold for nzd20m. If Sky can by the rest for nzd 50-75m, is that a good deal?

I believe they have $100M or so of debt?

If we are assuming the debt then MAYBE it is a decent deal if they give us the assets for free!

[Mel]

https://www.afr.com/street-talk/sky-network-tv-in-late-stage-talks-for-oaktree-s-mediaworks-20220605-p5ar6c

The article doesn't give much more than that. No mention of price or anything
"It is understood Sky Network has emerged as the preferred buyer for Mediaworks, which was put on the block by its owners Oaktree and Australian buyout firm Quadrant Private Equity."

I'm hoping that this is just one of the multiple (strategic) options that the Sky Exec are considering......

[Muse]

I believe they have $100M or so of debt?

If we are assuming the debt then MAYBE it is a decent deal if they give us the assets for free!

net debt yes more or less, $100m

i guess it all comes down to how much SKY pay for it, which drives how they finance it, and what that does to its proforma capital structure. if you inherit $100m of debt, and get some earnings, but use some existing cash, how does that constrain your ability to capital returns and dividends etc. synergies, both financial and operational, will no doubt feature heavily in any investor prez SKY wind up doing. devils in the detail which we dont have yet

[mistaTea]

https://www.nbr.co.nz/-18/

According to this mediaworks is independently valued at $150M.

Well that dovetails nicely with…ALL OF OUR CASH!!

And then there is the debt issue…

[jimdog31]

https://www.nbr.co.nz/-18/

According to this mediaworks is independently valued at $150M.

Well that dovetails nicely with…ALL OF OUR CASH!!

And then there is the debt issue…

So $45m cash, $105m debt....

[jimdog31]

When QMS merger with Mediaworks in 2018

The merger implies a blended EV/EBITDA multiple of 10x forecast CY18 EBITDA (pre-synergies) for the QMS NZ businesses. QMS NZ is budgeted to deliver an A$12.8m contribution to the QMS Media Limited group in FY19

[mistaTea]

So $45m cash, $105m debt....

If the valuation was for an Enterprise Value then sure.

This is going to be RugbyPass all over again isn’t it?

[Monarch]

I consider my sky shares a risky investment. I feel as though this acquisition could make it even riskier. They have ~100m debt as mistaTea said and not to mention the vast majority of their assets are intangible goodwill/brands. I note the similarities between this and NZME (minus the printing press). NZME makes money so why has mediaworks struggled for so long?

[Muse]

So $45m cash, $105m debt....

I haven't read the article properly or the stat accounts but the trick - and worry here - is whether the $150m is referring to the enterprise value (IE the value of the WHOLE company's capital - equity + debt) or value of its equity. Journalists often dont get the distinction right. If the $150m is the EV, then yes, ~$45m cash + the ~$105m net debt (or whatever it is). If the $150m is the equity value, then you are paying $150m for the equity ontop of inheriting the debt. My super quick glance of the NBR article had some SP #'s - some slueth could quickly multiply the SP$ against the # of shares on the companies office, and if that is or close to $150 you have your answer ($150m on top of the debt of ~100m)

[snigmac]

I doubt sky would pay nzd150m and assume debt. Mediaworks TV arm was sold for peanuts (and possibly without debt). If Sky is able to pick up the remainder of Mediaworks for peanuts, I think Sky would be in a better position and possibly gain value here.

Sky might turn out to be like the enterprise in the Sucession series, all it needs to do is buy Rainbows End.

[mistaTea]

I haven't read the article properly or the stat accounts but the trick - and worry here - is whether the $150m is referring to the enterprise value (IE the value of the WHOLE company's capital - equity + debt) or value of its equity. Journalists often dont get the distinction right. If the $150m is the EV, then yes, ~$45m cash + the ~$105m net debt (or whatever it is). If the $150m is the equity value, then you are paying $150m for the equity ontop of inheriting the debt. My super quick glance of the NBR article had some SP #'s - some slueth could quickly multiply the SP$ against the # of shares on the companies office, and if that is or close to $150 you have your answer ($150m on top of the debt of ~100m)

Yes I believe the $150M would be equity value.

GAAP loss is not relevant because the depreciation /amortisation charge is way high ($27M). Stay in business CAPEX probably only $5M.

So the business probably produced Owner Earnings of $15M-$20M (a multiple of 7.5 - 10x).

FCF was around $15M.

No way are they selling this kind of earnings profile for $45M to Sky.

[jimdog31]

I haven't read the article properly or the stat accounts but the trick - and worry here - is whether the $150m is referring to the enterprise value (IE the value of the WHOLE company's capital - equity + debt) or value of its equity. Journalists often dont get the distinction right. If the $150m is the EV, then yes, ~$45m cash + the ~$105m net debt (or whatever it is). If the $150m is the equity value, then you are paying $150m for the equity ontop of inheriting the debt. My super quick glance of the NBR article had some SP #'s - some slueth could quickly multiply the SP$ against the # of shares on the companies office, and if that is or close to $150 you have your answer ($150m on top of the debt of ~100m)

so if 1.5% is independently valued @ $2.12m =

$2,120,00 / 7614228 shares = 27.8c per share

27.8c per share @ 5076125228 shares = $141,333,341

[mistaTea]

I doubt sky would pay nzd150m and assume debt. Mediaworks TV arm was sold for peanuts (and possibly without debt). If Sky is able to pick up the remainder of Mediaworks for peanuts, I think Sky would be in a better position and possibly gain value here.

Agreed, it will all depend on the details of the deal before we can say this is a fair deal or terrible for shareholders.

But the radio and outdoor advertising businesses have a much stronger underlying earnings profile than tv3 so I am not sure we can draw much of a conclusion from the fact they had to sell the tv business for ‘cheap’

[mistaTea]

so if 1.5% is independently valued @ $2.12m =

$2,120,00 / 7614228 shares = 27.8c per share

27.8c per share @ 5076125228 shares = $141,333,341

I would have just divided $2.12M by 1.5%…

But that works too! 😅

[jimdog31]

I would have just divided $2.12M by 1.5%…

But that works too! 

I did that to begin with, had to get points for my workings like the good old school certificate days

[LoungeLizzard]

Agreed, it will all depend on the details of the deal before we can say this is a fair deal or terrible for shareholders.

But the radio and outdoor advertising businesses have a much stronger underlying earnings profile than tv3 so I am not sure we can draw much of a conclusion from the fact they had to sell the tv business for ‘cheap’

Agreed that the devil is in the detail but I question the strategic direction and whether this is the best use of SKY's funds. Their core business is still under a multitude of threats, they need to retain/expand content and attract further institutional investors. Not to mention pay dividends again to long suffering investors. This adds a whole new level of risk to SKY's business and could go terribly wrong.

[jimdog31]

Moose are you saying it could potentially be $141m Plus the debt of $108?

[Muse]

so if 1.5% is independently valued @ $2.12m =

$2,120,00 / 7614228 shares = 27.8c per share

27.8c per share @ 5076125228 shares = $141,333,341

well there you go. That implies its ~$140m+ on top of the inherited debt

Should go and have a look at what the EBITDA and EBIT metrics are but clearly NPAT is negative, and that matters.

But I have no doubt synergies are being sold as part of the transaction. Rule of thumb, just halve them, when they come out. Sometimes they are real, more often than not grossly inflated.

[mistaTea]

I did that to begin with, had to get points for my workings like the good old school certificate days

It breaks my heart that you and I were probably one of the last to sit School Certificate before they changed it to all this other points ****e I can’t understand…

[Muse]

Moose are you saying it could potentially be $141m Plus the debt of $108?

thats how it looks off my knee jerk reaction - i mean thats IF Skys bid comes in close to the appraised valuation. There is every chance the valuation referred to in the NBR article is bonkers and after a fair and full process bidders say thats crazy, and Sky as the top dog have their bid accepted at something less. but in the absence of any other information, ~$250m appears ballpark as an enterprise value

[snigmac]

If this deal does indeed crystallize, we would have some fun guessing the final purchase price and terms.