SKT Sky Network Television Limited.

[Bjauck]

It’s all relative. If there was no such thing as NETFLIX I would be saying NEON is super wonderful, no complaints at all - just happy to have a cheaper alternative to a big satellite bundle. UX is way better than MySky - can’t believe how lucky I am!...

I started a sub to Netflix last month and I was expecting to cancel it after a short period. However I was pleasantly surprised at lack of connection issues and the ease of use both on Mac and iOS. Plus I was expecting mostly US content but found great programming from the UK, Aus and Europe.So for me it is great value for money.

I had another look at TVNZ on demand too. Big improvements since I last looked (over a year ago!). The ads are no longer as intrusive as they had been. I could happily live with those two services were it not for sport - so still have the old generation Sky sub and paraphernalia.

I looked into Amazon Prime but the NZ service seems to have a dearth of content. Even the great US Prime series "Transparent" is not available in NZ on Prime. Someone else must be sitting on the rights.

It would be great if Sky were flexible. I would love to be able to select online only for a couple of channels.

[mistaTea]

I started a sub to Netflix last month and I was expecting to cancel it after a short period. However I was pleasantly surprised at lack of connection issues and the ease of use both on Mac and iOS. Plus I was expecting mostly US content but found great programming from the UK, Aus and Europe.So for me it is great value for money.

I had another look at TVNZ on demand too. Big improvements since I last looked (over a year ago!). The ads are no longer as intrusive as they had been. I could happily live with those two services were it not for sport - so still have the old generation Sky sub and paraphernalia.

I looked into Amazon Prime but the NZ service seems to have a dearth of content. Even the great US Prime series "Transparent" is not available in NZ on Prime. Someone else must be sitting on the rights.

It would be great if Sky were flexible. I would love to be able to select online only for a couple of channels.

If you only have sky for sport - why don’t you cancel your satellite sub and just subscribe to their streaming app - Sky Sport NOW ?

I have fibre so that’s what I subscribe to for my sport. Only costs $39.99/month (12 month contract) or $49.99/month if you don’t want to be locked into a minimum term.

[mistaTea]

Came across this write up from November last year:

https://simonowens.substack.com/p/why-the-tech-platforms-lost-interest

Now if only Sky and Spark could join forces and do some kind of a deal for Sport, rather than continue fighting only to cause future Sport rights to balloon.

They have just done a deal for Lightbox, so who knows what else might be on the cards? I get the impression that Jolene Hodson is very pragmatic, and not as bullish on Sport streaming as Simon Moutter.

Of course, I could be wrong about that. She may be playing it cool with her statements to media, but behind the scenes still be pushing aggressively to take more and more sport of Sky regardless of the cost.

Their next lot of results should be interesting - I believe we will learn how much they have spent on sport streaming in total (platform costs + spend on all streaming rights).

[Entrep]

Sky completes Lightbox deal and shares at, I believe, new all time low.

[winner69]

Sky completes Lightbox deal and shares at, I believe, new all time low.

Think 68 cents (or should we say $0.68) is an all time low. Still a $300m company though (market cap that is)

Its one sad chart since 2014 isnt it

[Preston]

Think 68 cents (or should we say $0.68) is an all time low. Still a $300m company though (market cap that is)

Its one sad chart since 2014 isnt it

I guess that represents the market sentiment towards it at the moment and I imagine there are a bunch of people just watching all markets at the moment and licking ice creams trying to beat the heat.

I have heard that the new Exec has been culling a LOT of jobs at SKY....where there once was a team there is now one or two.

It's gonna take some really solid proof to get people back on side, a full makeover, maybe with an accompanying montage? but if they do I think this company will be back to at least par value if not more.

[RTM]

Sky completes Lightbox deal and shares at, I believe, new all time low.

https://www.nzx.com/announcements/347828

Anyone any idea how long it takes for the two products to become one ?

[RTM]

I guess that represents the market sentiment towards it at the moment and I imagine there are a bunch of people just watching all markets at the moment and licking ice creams trying to beat the heat.

I have heard that the new Exec has been culling a LOT of jobs at SKY....where there once was a team there is now one or two.

It's gonna take some really solid proof to get people back on side, a full makeover, maybe with an accompanying montage? but if they do I think this company will be back to at least par value if not more.

Out of curiosity..... what do you consider par value ?
Its kind of ironic that while the SP is at a low.....the quality of their streaming is the best its ever been (I think anyway)
Streamed some of the tennis last night and it was excellent. Way better than I expected.

Neon on the other hand....Grrrrrr.

[mistaTea]

Sky completes Lightbox deal and shares at, I believe, new all time low.

Yeah the deal is locked in now re: Lightbox.

I think it is shameful that Spark recently touted a subscription number of 360,000. Turns out they only actually have 130,000 active users. Next time they report Spark Sport subscription numbers we will need to take it with a tablespoon of salt.

Still, when Blair releases the unofficial sub numbers as at 31 Jan when the HY results are released, Sky should be sitting at around 1 million subscribers now by my reckoning.

I just hope Sky end up creating a new merged service and then retire existing NEON and Lightbox. The media articles weren't clear (because Sky have not offered clarity...). If they try to somehow maintain the existing services plus add a new 'merged' service that would make no sense to me.

In my mind, they need to completely transition away from satellite within 5 years to four core streaming services:

1. Sky Sport NOW - for the fans that love Sky's sport offering, but are quite happy with Netflix etc for their other entertainment
2. New significantly enhanced SVOD service (the merged NEON and Lightbox) - for those that enjoy Sky's Movies and SOHO content, but aren't interested in sport
3. RugbyPass - for the international rugby fans. As much as I disagree with the practice, Nzers can also access this service if they just want rugby by using a VPN.
4. Updated and Enhanced SkyGO as a standalone with appropriate pricing for multiple simultaneous streams - for people like myself who enjoy both Sky's sport and entertainment offerings, want it all on one user friendly platform...but has to be a reasonable price.

That should cover their bases and ensure they have 'something for everyone', at reasonable prices.

Just over a week until we hear from Martin Stewart to get a sense of what they have done over the last 6 months - and what he thinks the way forward is. It is entirely possible that Martin knows more about the industry (and therefore the best path forward) than me! :D

I wonder if they are holding on to a big announcement to try and add some 'wow factor' to the next lot of results?

[JohnnyTheHorse]

At this level I am expecting to see Sky acquired in the not too distant future. Someone like Foxtel...

[mistaTea]

https://www.nzx.com/announcements/347828

Anyone any idea how long it takes for the two products to become one ?


Doesn't sound like it will take too long. A few months - they should have something by the middle of this year.

That tells me they are pushing ahead with the investment they have already made in NEON to get it up to scratch.

If it was just a matter if merging the content, they could take the Lightbox shows - stick it on the NEON server and hey presto! The service is merged. They could transfer the content and test it within a day or so if that was the case.

So they must be doing a fair bit of dev and testing still for the new service before they present the new merged offering.

[mistaTea]

At this level I am expecting to see Sky acquired in the not too distant future. Someone like Foxtel...


Yeah mate, that is my worry. I don't mind if Sky is bought out per se...perhaps going private, and having the backing of someone with deep pockets will help Sky be more competitive (it will certainly remove a lot of the scrutiny).

But I wouldn't want to sell for pennies on the dollar.

And think about it... the current market cap is only $300M. If we assume that the price tag of $62M for RugbyPass is not completely looney tunes...

That means the market currently values 'core Sky' at only $240M!!! I mean, that is absurd. Even though there is pressure on revenue and earnings... a company with a low PE of 10 (in this market) would only need to have earnings of $24M per year. Sky's current 'owner earnings' is way higher than that...and one would need to expect some really huge drops in owner earnings over the next 5 - 10 years to justify a price like that. I don't see it.

I am sure there are companies sniffing around, looking to acquire Sky as she does own some really valuable assets - I just hope management only entertain offers that resemble intrinsic value.

[RTM]

Doesn't sound like it will take too long. A few months - they should have something by the middle of this year.

That tells me they are pushing ahead with the investment they have already made in NEON to get it up to scratch.

If it was just a matter if merging the content, they could take the Lightbox shows - stick it on the NEON server and hey presto! The service is merged. They could transfer the content and test it within a day or so if that was the case.

So they must be doing a fair bit of dev and testing still for the new service before they present the new merged offering.

We were watching Succession on Neon a couple of nights ago.
Without touching the iPad (danger danger) ....it stalled 3 or 4 times.
Pain in the A. !
So yes....be really nice if it was more stable !

[mistaTea]

Part of the recent SP crash was caused by Sky suspending the dividend.

They may be temped to resume some kind of payout to shareholders - God knows they still have healthy enough cashflows to do it...

But personally I would prefer them to return cash to shareholders by way of a share buyback. At the current low market cap, they could purchase back the 10% of shares that were dished out to RugbyPass and NZRugby for $30M.

That would be a much better result for long-term shareholders compared to paying a dividend (which is taxed).

It is precisely when SP is very low that management should consider buybacks. All to often, however, management of listed companies do the opposite - they buyback when SP is at or above intrinsic value as a way to try and show increased earnings per share.

[see weed]

That's a shame, was thinking of buying 100k to get a dividend for a strip. Might have to go somewhere else:mellow:.

[Waikaka]

Was doing a little reading on SKY but decided I am not going to over analyse this one.

Current PE of less than 5.
Surprisingly steady free cash-flow (average of the last 5 years $147 million)
Reducing debt

On the flip side, pretty steadily decline in revenue, still too much debt, a widely hated business model but at this price happy to hold my nose pick up a few to encourage me to read up on the business. Pretty sure it is a bargain, great entry point at the moment.

[mistaTea]

Interesting article: https://thespinoff.co.nz/business/03-02-2020/sky-tvs-new-ceo-has-a-bold-rescue-plan-can-he-pull-it-off/

[Entrep]

Yes it is, the intro is complete BS however -
Sky’s new CEO hasn’t yet been in his job for a year, but has already achieved more than his predecessor did in a decade.

[mistaTea]

Yes it is, the intro is complete BS however -

I think he said he did the interview in December. And Martin came in board Feb 2019.

So that was true at the time he was chatting to him.

Or are you referring to the ‘did more than John fellet did in 10 years’ hyperbole?

[Timesurfer]

I hope they research the "love of the bundle" theory before launching a do or die run. I don't imagine that I am the only person out there who has no interest in such a package. I went off sport when sky first bought it all up and haven't returned, local programing I can get more than my fill of on free to air and won't miss it if its not there, and general news I can get all I want online without the drivel.

[mistaTea]

I hope they research the "love of the bundle" theory before launching a do or die run. I don't imagine that I am the only person out there who has no interest in such a package. I went off sport when sky first bought it all up and haven't returned, local programing I can get more than my fill of on free to air and won't miss it if its not there, and general news I can get all I want online without the drivel.

You aren't the only person who does not want a full bundle that has 'everything' - which is why Martin does say they need a compelling Entertainment-only offering. His comments are actually broadly aligned to a previous post I made just yesterday (https://www.sharetrader.co.nz/showthread.php?4216-SKT-Sky-Network-Television-Limited&p=789465&viewfull=1#post789465) as it turns out (I swear, I only found that article this afternoon)

I outlined the four key services I think they need to transition to (and do it quickly):

1. Sky Sport NOW - for the fans that love Sky's sport offering, but are quite happy with Netflix etc for their other entertainment
2. New significantly enhanced SVOD service (the merged NEON and Lightbox) - for those that enjoy Sky's Movies and SOHO content, but aren't interested in sport
3. RugbyPass - for the international rugby fans. As much as I disagree with the practice, Nzers can also access this service if they just want rugby by using a VPN.
4. Updated and Enhanced SkyGO as a standalone with appropriate pricing for multiple simultaneous streams - for people like myself who enjoy both Sky's sport and entertainment offerings, want it all on one user friendly platform...but has to be a reasonable price.

Personally, I would be interested in option 4 if I could get it at a reasonable price. I enjoy both Sky's entertainment and sport offerings...so a larger bundle which would allow me to consume all of the content on a single, user-friendly platform would be ideal.
I don't think I am alone in this desire either, and the more fragmentation we see in the market the more appealing bundles appear to me.

It's just that right now Sky's satellite bundles are very expensive (relative to streaming services) and MySky has really outdated UX. I tried to navigate the OnDemand menu of my sister's MySky a couple of weeks ago - Christ it was difficult compared to the streaming services I am accustomed to now!

[mistaTea]

Two very different articles written today about Sky. Astonishing.

The first is from Chris Keall, who seems to only ever consider the negatives. I don't think he actually knows a lot about broadcasting, so he fills in his knowledge gaps with speculation and personal opinion. In this latest one he makes a huge deal about the $5M paper loss NZ Rugby have observed on their 5% of Sky TV shares. He speculates that they are probably now wishing they just took cash instead for the whole deal.

That is one very negative way to look at it. In reality, with NZ Rugby being such a large shareholder now I doubt very much that they give a tinkers toss that the quoted value of their stock has dipped at the moment. They are more likely to ignore SP and behave as business owners - their focus will be on how the broadcasting company they own can help them with their ambitions to build the sport. An All Blacks centric offering on RugbyPass is one of many ideas they have to grow the brand and sport over the long term.

But don't expect that kind of thinking to ever enter Chris's 'journalism'.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12306355

Then on Stuff I come across a very different article: https://www.stuff.co.nz/entertainment/tv-radio/119226432/lightbox-neon-merger-will-give-netlix-some-strong-competition--media-expert

Points out the challenges of streaming in a crowded market but, quite rightly, also points out that a combined Lightbox-NEON service stands a much better chance of being competitive (as opposed to the current state where they are standalone services competing against each other as well as the Muti-billlion dollar empires like Netflix, Disney etc).

[bull....]

Two very different articles written today about Sky. Astonishing.

The first is from Chris Keall, who seems to only ever consider the negatives. I don't think he actually knows a lot about broadcasting, so he fills in his knowledge gaps with speculation and personal opinion. In this latest one he makes a huge deal about the $5M paper loss NZ Rugby have observed on their 5% of Sky TV shares. He speculates that they are probably now wishing they just took cash instead for the whole deal.

That is one very negative way to look at it. In reality, with NZ Rugby being such a large shareholder now I doubt very much that they give a tinkers toss that the quoted value of their stock has dipped at the moment. They are more likely to ignore SP and behave as business owners - their focus will be on how the broadcasting company they own can help them with their ambitions to build the sport. An All Blacks centric offering on RugbyPass is one of many ideas they have to grow the brand and sport over the long term.

But don't expect that kind of thinking to ever enter Chris's 'journalism'.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12306355

Then on Stuff I come across a very different article: https://www.stuff.co.nz/entertainment/tv-radio/119226432/lightbox-neon-merger-will-give-netlix-some-strong-competition--media-expert

Points out the challenges of streaming in a crowded market but, quite rightly, also points out that a combined Lightbox-NEON service stands a much better chance of being competitive (as opposed to the current state where they are standalone services competing against each other as well as the Muti-billlion dollar empires like Netflix, Disney etc).

neon/lightbox will never compete against netflix. ever declining price off the stock only suggests the end is coming

[Baa_Baa]

neon/lightbox will never compete against netflix. ever declining price off the stock only suggests the end is coming

Five and a half years of capital destruction, over 90% fall in share price, even an arcing down trend line. Monthly chart. https://invst.ly/prm3r
:scared:

[Well Endowed]

neon/lightbox will never compete against netflix. ever declining price off the stock only suggests the end is coming


fully agree. As content owners 'turtle' and current geographical deals start rolling off, there just isn't the quality content available for the likes of Neon/Lightbox that would even come close to justifying a similar monthly charge as Netflix.

This is even more clear with new content, which is increasingly being created for exclusivity on a specific platform.

https://www.stuff.co.nz/entertainment/film/119320743/warner-bros-and-hbo-max-launch-a-mini-label-to-make-streaming-movies

[mistaTea]

fully agree. As content owners 'turtle' and current geographical deals start rolling off, there just isn't the quality content available for the likes of Neon/Lightbox that would even come close to justifying a similar monthly charge as Netflix.

This is even more clear with new content, which is increasingly being created for exclusivity on a specific platform.

https://www.stuff.co.nz/entertainment/film/119320743/warner-bros-and-hbo-max-launch-a-mini-label-to-make-streaming-movies

Perhaps you are right.

Though I still question the economics for the likes of HBO, Showtime, FX etc ripping up their deals with Sky in favour of entering this small market with standalone products.

Disney + was different in my mind because there will be a lot of families that will be prepared to fork out $10/month to get the shows for the kids. Parents will have some pressure from their kids, and there is also a nostalgic pull factor for the grownups.

I don't think the same would apply to the other content creators.

And also, once HBO Max is available - all Kiwi's with a VPN can sign up direct if they want anyway (as much as I might personally be against the practice). So wouldn't they be better off having their cake and eat it too? Get the big cheque from Sky and additional revenue from Kiwis accessing their service via VPN.

On the topic of VPNs... I reckon if our American friends discovered that they could subscribe to NEON for US$9/month and get all that HBO/Showtime/FX content for the equivalent of approx US$2 per week then NEON subs would go through the roof.

The NEON app needs a lot of work, but at NZ$13.95 per month it's a bargain and I am surprised overseas VPN-using bargain hunters haven't discovered it.

[Entrep]

On the topic of VPNs... I reckon if our American friends discovered that they could subscribe to NEON for US$9/month and get all that HBO/Showtime/FX content for the equivalent of approx US$2 per week then NEON subs would go through the roof.

The NEON app needs a lot of work, but at NZ$13.95 per month it's a bargain and I am surprised overseas VPN-using bargain hunters haven't discovered it.

LOL - very true!!

[Preston]

I agree with a comment in one of the articles that just came out. The more competition in the Movie/tv streaming space, the better. I would imagine it would be a lot easier to go into partnership with one of the streaming giants if they knew that they'd have direct access to the Sky subscriber base and wouldn't have to fight in a crowded area. (not that they probably care too much about NZ!) I'm already at the point where I'd like the amazon, Disney and netflix services because of different shows......do I purchase all of them? Is someone going to wrap a couple up in a nice parcel for me and then give me the option to watch the F1 (if they can get it back) Rugby and the Breakers as well? Martin is onto something here. Retail shops all eventually ended up in one big customer milking machine. Wonder if his vision will come true.

Either way, until the Dividend gets reinstated, I don't think there will be a heck of a lot of SP movement. But if it gets back to 15c/year...nice earner at this price.

[mistaTea]

I'm already at the point where I'd like the amazon, Disney and netflix services because of different shows......do I purchase all of them? Is someone going to wrap a couple up in a nice parcel for me and then give me the option to watch the F1 (if they can get it back) Rugby and the Breakers as well? Martin is onto something here. Retail shops all eventually ended up in one big customer milking machine. Wonder if his vision will come true.

Either way, until the Dividend gets reinstated, I don't think there will be a heck of a lot of SP movement. But if it gets back to 15c/year...nice earner at this price.

Yeah as the space gets more crowded, I think aggregation is inevitable. Whether or not Sky ends up being the premium aggregator in NZ is yet to be seen - though, in my view, they are the best placed.
They already have a partnership with Bein Sports for example, so why not be able to tack on Amazon, Netflix etc? They could tack on a couple of new channels that play an assortment of their content for those who still like browsing through the 'TV guide' as well as have their entire catalogues available On Demand. Spark have a wholesale deal with Netflix, so why couldn't Sky do something similar?

With regards to the dividend. Agree that SP would rise if they reinstated it. But I don't see them paying out 15c/share per annum for the foreseeable future...that would equate to approx $65M a year. They still need to invest more into the business and pay down more debt.

It is feasible that they could pay out $20M - $40M per annum though (4.5c - 9c per share). Personally, if they are going to return $$$ to shareholders I would prefer it via share buyback at these current low prices. That would reward long-term holders exponentially.

But in the short term, payment of a dividend would probably push the SP up higher than if they did a buyback...so it will be interesting to see what they do here.

[TideMan]

As Crusaders season ticket holders, we've been offered a Super Rugby season (Feb to Jun) sub for all Sports channels for $160.
Not for me this year, but maybe next year..............
It's shows they're innovating.

[mistaTea]

As Crusaders season ticket holders, we've been offered a Super Rugby season (Feb to Jun) sub for all Sports channels for $160.
Not for me this year, but maybe next year..............
It's shows they're innovating.

Sh1t, that is a bloody good deal. Over 5 months that would only be $32/month or just over a dollar a day.

If they are making that offer to all season ticket holders it should drive subs up a lot I would think. Especially since it sounds like you get access to all 12 sport channels.

[Preston]

Hey MistaTea,

What are your thoughts around Spark Sport and their sport streaming service.

Reading their annual reports it becomes quite clear (imo) that they are not focussed at all on making Sport streaming a core part of their business. There was one note about it in one of the flashy slides, but no real financial information that I could find about how much money it actually brings in for them. Moreso it was classified under "other" (or did I miss it?)

You get the feeling that they know they're not a streaming service and that their shareholders would be asking some pretty serious questions if they started spending profit on rights. (which they have said in the report they won't pay over the top money for...do you want to be the best or just a pain in the ....?)

So given that the lightbox deal went through, do you think Sky might just buy Sparksports rights off them? Could be an easy out for Spark. Would poss need commercial commission approval I'm thinking? It just doesn't add up for me that Spark are into streaming sport.

cheers

Preston

[mistaTea]

Hey MistaTea,

What are your thoughts around Spark Sport and their sport streaming service.

Reading their annual reports it becomes quite clear (imo) that they are not focussed at all on making Sport streaming a core part of their business. There was one note about it in one of the flashy slides, but no real financial information that I could find about how much money it actually brings in for them. Moreso it was classified under "other" (or did I miss it?)

You get the feeling that they know they're not a streaming service and that their shareholders would be asking some pretty serious questions if they started spending profit on rights. (which they have said in the report they won't pay over the top money for...do you want to be the best or just a pain in the ....?)

So given that the lightbox deal went through, do you think Sky might just buy Sparksports rights off them? Could be an easy out for Spark. Would poss need commercial commission approval I'm thinking? It just doesn't add up for me that Spark are into streaming sport.

cheers

Preston

Certainly the new CEO Jolene Hodson appears to be a lot more muted about sports than Simon Moutter was. Their Head of Sport Jeff Latch still makes comments to the media every now and then that indicate Spark Sport is here to stay...but then I am not so sure as the language seems more muted than under previous leadership.

They will issue the first lot of financials as pertains to Spark Sport in their HY results. Then it will be interesting to see what their shareholders make of it. In terms of them saying they will not pay over the odds... well that is absolute bs. They paid way over the odds for RWC. And by the time they won domestic cricket, Martin had already said that anyone who outbids Sky 'will go bust'. A bit of hyperbole there from Martin...but what was clear was that Sky were going to bid until it hurt to keep key sporting rights. Cricket is one of those key sports...so the fact that Spark won it is a pretty good indication that they paid more than the rights are actually worth to get it.

It has never made sense to me that Spark have entered sports streaming. In such a small country like NZ... all this has a achieved is a transfer of wealth from both Spark and Sky shareholders to sporting bodies.

Whether or not the sale of Lightbox is a precursor to Spark finding an exit for their struggling sport service is anyones guess. Obviously Sky would be keen to do a deal, but it would come down to how much Spark expected for it.

Sky would only want to pay a 'fair price' for the rights they hold - but if Spark have paid over the odds for the sport they have, how much of the premium they paid are they willing to eat to ditch the service? Let's watch this space and see where Spark go to from here.

Weirdly, losing the domestic cricket rights will help Sky's finances a lot. It will probably offset the additional $$$ they have agreed to pay NZ Rugby... however it is unlikely they will lose many Sky Sport subs due to the domestic cricket loss because they still hold international cricket (which will feature the Black Caps) as well as all of the other sport.

As much as I would have much preferred Sky to keep domestic cricket...it may actually boost our earnings. I think we would only lose significant subs if we had lost all of the cricket, or the NRL, or the Rugby.

Rugby is locked in until the end of 2025, so is international cricket I think... and no doubt they are negotiating hard with NRL as we speak.

Sky sponsor the Breakers and Silver Ferns so basketball and netball are a given (and growing in popularity).

Personally I think Sky have snookered Spark here, but let's wait and see.

[mistaTea]

It has never made sense to me that Spark have entered sports streaming. In such a small country like NZ... all this has a achieved is a transfer of wealth from both Spark and Sky shareholders to sporting bodies.



I will add one more thought to my previous post...as the bit I am quoting above is not completely fair (it's not the full picture anyway).

Spark entering sports streaming gave Sky a massive kick up the ass. If it was not for Spark Sport we would almost certainly still have FANPASS.

So consumers can thank Spark for that as the competition has forced Sky to dramatically speed up the delivery of a modern sport streaming platform that can be subscribed to for a reasonable price.

[Preston]

I will add one more thought to my previous post...as the bit I am quoting above is not completely fair (it's not the full picture anyway).

Spark entering sports streaming gave Sky a massive kick up the ass. If it was not for Spark Sport we would almost certainly still have FANPASS.

So consumers can thank Spark for that as the competition has forced Sky to dramatically speed up the delivery of a modern sport streaming platform that can be subscribed to for a reasonable price.


:t_up:

cheers

[Bjauck]

If you only have sky for sport - why don’t you cancel your satellite sub and just subscribe to their streaming app - Sky Sport NOW ?

I have fibre so that’s what I subscribe to for my sport. Only costs $39.99/month (12 month contract) or $49.99/month if you don’t want to be locked into a minimum term.

A the moment the Satellite Sky Sport package costs $31.99/month and the sky starter plus sky sport package costs $57.98/month with the included use of the SkyGo app. So Sky Sport Now is not cheap despite just being internet only. I sometimes watch a couple of the sky starter channels too.

So there's still some way to go before my ideal pick and mix internet streaming only option.

[bull....]

this article says sky and spark will be cut out of sport soon

Premier League plans Netflix-style service - which would cut the likes of Spark and Sky out of the loop
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12307249

[mistaTea]

A the moment the Satellite Sky Sport package costs $31.99/month and the sky starter plus sky sport package costs $57.98/month with the included use of the SkyGo app. So Sky Sport Now is not cheap despite just being internet only. I sometimes watch a couple of the sky starter channels too.

So there's still some way to go before my ideal pick and mix internet streaming only option.

That is true if you do not have MySky. Most people with traiditonal Sky have MySky though as the ability to record and watch later is considered the minimum required functionality by many.

So a Sky Sport subscriber who has MySky is paying closer to $73/month.

[mistaTea]

this article says sky and spark will be cut out of sport soon

Premier League plans Netflix-style service - which would cut the likes of Spark and Sky out of the loop


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12307249

I am yet to find anything useful from the vast amouts of speculation Chris Keall pumps out and dresses up as 'news'.

[Bjauck]

That is true if you do not have MySky. Most people with traiditonal Sky have MySky though as the ability to record and watch later is considered the minimum required functionality by many.

So a Sky Sport subscriber who has MySky is paying closer to $73/month. Yes, Mysky does add an extra service with an extra cost that would appeal to many. Both SkyGo and Sky Sport Now have access to the OnDemand sports catalogue. So mysky can be dispensed with provided you don't mind waiting until (and if?) your desired fixture appears in the catalogue - as with the Sky Sport Now.

[mistaTea]

Yes, Mysky does add an extra service with an extra cost that would appeal to many. Both SkyGo and Sky Sport Now have access to the OnDemand sports catalogue. So mysky can be dispensed with provided you don't mind waiting until (and if?) your desired fixture appears in the catalogue - as with the Sky Sport Now.

That's a great point you make. Now that SkyGo can be chromecast to the big screen...perhaps traditional satellite packages will now be more attractive than I anticipated.

You could hand back your MySky and just have the 'dumb decoder' for free. That decoder will still allow you to browse the OnDemand catelogue if you connect it to the internet.

To get a number of the MySky-type features you could always log into your SkyGo now and cast it to the big screen.

Also, people paying for multi-room will probably hand back the extra decoder in the bedroom as they can just cast their SkyGo.

So paying the $58ish bucks a month for Starter + Sport is still good if you watch some of the other starter channels. Plus it gives you truly 'live' sport (Sky Sport NOW is delayed about about 30 seconds or so I think).

But will MySky customers consider this and make the savings?

I still think if you watch a lot of sport and just want the Sport content then a $39.99 Sky Sport NOW sub is the way to go.

[Bjauck]

Sky Go on the phone with chrome cast does seem to work well for me on any tv in the house! I have been watching the news channels a fair bit, so the starter pack is still a goer for me. Picture quality is good too.

[mistaTea]

this article says sky and spark will be cut out of sport soon

Premier League plans Netflix-style service - which would cut the likes of Spark and Sky out of the loop


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12307249

Christ, it gets even worse.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12307311

According to the industry expert Chris, not only will football be off the table for the likes of Sky...but super rugby is almost certain to disintegrate and then it really is curtains for Sky!

Sh1t, I better sell quick. Within the next few years all they will have left is their Prime channel! :eek2:

[mistaTea]

Sky Go on the phone with chrome cast does seem to work well for me on any tv in the house! I have been watching the news channels a fair bit, so the starter pack is still a goer for me. Picture quality is good too.

in 2018 there was a net satellite sub loss of 43K.
In 2019 there was a net satellite sub loss of 42K.

It will be interesting to see if the sub losses are materially lower at the next Annual Report. Perhaps the SkyGO casting will be enough of a benefit to make more people think twice about handing their Sky box set back.

Not sure if the HY results will give much of an indication since the SkyGO casting feature was only released recently.

[mistaTea]

https://www.rugbypass.com/news/rpa-warns-of-a-mass-player-revolt-over-seven-nations-plot

It would have been nice if The Herald did a little research before publishing outright speculation. We could at least have a more balanced view.

SA are locked in to the current agreement at least until the end of 2025...and any notion of them joining the Six Nations tournament is far from being a given (yet the stories that were published would make the reader think the whole current state was almost certainly going to come crashing down).

[Jay]

Heard a english commentator the other day on the radio here. He said this is the 4 or 5th time the english papers have been spouting the story. While he thinks it will happen one day, makes sense, not any time soon, as mentioned locked in the agreement until the end of 2025 at least. Did say that Sanzaar and NZ rugby need to make plans for the eventuality and not leave it to the last minute as if it is a big surprise when it happens

[moimoi]

testing testing

[Dlownz]

Predictions for today before half year comes out 😁. Divy no Divy. Profit no profit

[Sideshow Bob]

Sky Reports Growth in Streaming Services
12/2/2020, 8:34 amHALFYR Sky reports growth in streaming services; tracking towards 1 million customers
Key points:
• Sky achieving growth, with total subscribers increased to 795,000, including 74% increase in streaming customer numbers
• Delivering strong progress across all strategic objectives
• Acquisitions of RugbyPass and Lightbox open door for further growth in New Zealand and offshore
• Revenues of $385m with reconfirmation of Full Year 2020 guidance range of $750m and $770m
• EBITDA of $89.7m, with Full Year 2020 guidance confirmed at $170m-$190m
• NPAT of $11.9m
• Business repositioned to be a leading New Zealand multimedia organisation, transforming rapidly to meet current and future needs of customers
• On trajectory to achieve 1 million customers in 2021
Sky has today reported financial results for the six months ended 31 December 2019, delivering strong growth in streaming customer numbers of 74% and overall growth in the customer base to 795,000 from 750,000 a year ago. The Lightbox acquisition will continue the momentum.
Martin Stewart, Sky’s Chief Executive said “We are pleased to have grown our customer numbers and to have made strong progress across all of our strategic objectives. Our ambition is to connect New Zealanders with the sport and entertainment content they love, in ways that work for them.
“Our new and enhanced streaming services are attracting new customers to Sky, and we are also firmly focused on super-serving our satellite customers. One of the pleasing outcomes is seeing the 25% growth in satellite customers who are also streaming our content on Sky Go, and we’ve had excellent feedback about new features like the ability to cast to big screens and download-to-go.
“The Lightbox acquisition and our investment in ground-breaking new digital services gives us confidence that we will continue our growth trajectory. We have reached 925,000 customers this month, an all-time high for Sky, and have now set our sights on reaching the 1 million mark.”
Revenue of $384.8m is down 5% from $403m in the previous period, but with positive signs with satellite churn performance improving from 15% to closer to 13% as a result of initiatives to attract and retain customers.
“Slowing the decline in satellite customer numbers is an important achievement, as it shows that we can manage the transition to a streaming future while continuing to serve satellite customers well and earning their loyalty every day.”
Operating costs, excluding depreciation, have increased 7% in the period to $295.1m, including some one-off expenditure and investments that open the door to future growth. Programming rights have increased as anticipated, as Sky continues to ensure it secures the rights that matter to New Zealand fans. Marketing spend has been boosted after a long period of under-investment.
“Today’s results reflect a business in transformation. In the last year Sky has undergone significant change to reposition for growth in an increasingly competitive market. Many of the one-off costs we report today are a consequence of these changes, and we will continue to maintain the balance between careful control of costs and new investment to position Sky for future growth.”
Investment for Growth
The investment in RugbyPass provides the opportunity to grow Sky’s business beyond New Zealand’s borders, with more than 30 million people engaging with RugbyPass content every month. Initiatives like the launch of the RugbyPass TV channel in a number of Asian markets on 31 January, timed to coincide with the Six Nations and start of the Super Rugby season, shows Sky leveraging its capabilities to expand the RugbyPass customer base. In this example, adding linear TV to the RugbyPass portfolio enables the business to expand its reach in certain markets and create a blended TV and digital experience for rugby fans.
The Lightbox acquisition, which was announced in December and completed on 31 January 2020, accelerates the shift to streaming and enables the development of a super-charged entertainment service combining the best of Neon and Lightbox content.
The development of Sky’s new digital platform is progressing well, with details expected to be released in the next quarter.
Securing the rights that matter, and fuelling sport in New Zealand
The announcement in October of Sky’s revolutionary broadcast deal for SANZAAR Rugby rights was a clear demonstration of the strategy to retain the rights that matter. Sky also extended its partnership with Netball New Zealand, the New Zealand Olympic Committee and IOC, and secured the rights to ICC Cricket and Cricket Australia.
“We have also invested strategically to grow and nurture New Zealand sport at all levels. The strength and sustainability of the sports sector is as vital to Sky as it is to the wellbeing of the communities in which we operate. Our investment in the Sky Sport Next programme helps to grow more than 50 sports across the country, and we are also supporting a number of teams such as the Sky Sport Breakers, Wellington Phoenix, Kiwi Ferns, Warriors Women, Tall Ferns and White Sox.”
Outlook
Sky has confirmed the FY2020 guidance provided in November 2019. FY2020 revenue is expected to be within the guidance range of $750m - $770m, and EBIDTA is expected to be within the guidance range of $170m - $190m.
Capex is expected to remain within the target range of 7-9% of revenue. No dividend will be paid, consistent with the Company’s strategy to reinvest in the business.
“We are pleased to report strong progress across all of our strategic objectives, and investors and customers can expect to see further progress in 2020. We have a clear focus on satisfying the needs of our customers and partners in order to achieve long-term value for our shareholders.”
ENDS
1. All percentage changes compare to the prior comparable period (six months to 31 December 2018) unless otherwise stated.
2. EBITDA is a non-GAAP financial measure and is defined by the Company as Earnings before income tax, interest expense, depreciation, amortisation and impairment, unrealised gains and losses on currency and interest rate swaps. The directors and management believe that this measure provides useful information on the underlying performance of the Group. You should not consider this in isolation from, or as a substitute for, the information provided in the unaudited consolidated financial statements for the six months ended 31 December 2019, which are available at https://www.sky.co.nz/investor-relations/results-and-reports.

[bull....]

terrible as expected , revenue increase due to higher subscriber numbers doesnt mask the fact all other metrics are going backwards. competitor activity only likely to become more intense as more enter the market. only hope long term is someone buying the company in the future for the digital platform.

[Sideshow Bob]

terrible as expected , revenue increase due to higher subscriber numbers doesnt mask the fact all other metrics are going backwards. competitor activity only likely to become more intense as more enter the market. only hope long term is someone buying the company in the future for the digital platform.

When you lead with "Growth in Streaming Services" when the guts of your business is satellite, then you know it ain't going to be good.

[winner69]

Operating cash flow $42m less than half reported last year

That’s bad ...maybe especially bad seeing they spent more than that (investments) to keep going

[Benny1]

Was hoping for a new pricing structure for satellite to be announced...
Time they changed things up... Drop the silly MySky fee and over more attractive packages...

[Jay]

Was hoping for a new pricing structure for satellite to be announced...
Time they changed things up... Drop the silly MySky fee and over more attractive packages...
Agree - but when - surely must a case of when not if???

Maybe revenue neutral - lowering package prices but retaining and/or gaining back customers

[Getty]

schritzophrenic activity here, opens up at 72c on $176000, from 63c yesterday, then back to 63c in ten minutes

[mistaTea]

Agree - but when - surely must a case of when not if???

Maybe revenue neutral - lowering package prices but retaining and/or gaining back customers

I think their goal is to significantly slow down the loss of satelite subscribers. Not stop or reverse the decline.

This will enable a smoother transition to streaming.

But that is where they are moving to - looks like there are two new apps being released in the next few months.

1. The merged NEON-Lightbox service
2. a brand new digital offering. I predict you will be able to subscribe to both sport and all of their entertainment channels.

Once their digital services are up and running they won't mind satellite losses so long as they can convince them to take their digital offering instead (which will be cheaper for the customer, and cheaper for Sky).

[mistaTea]

Overall very pleasing results.

Owner Earnings still on track to be in a range of $90-$100M at the full year results.

Significant spend on transitioning the business, but I like what they have spent the money on so far.

The low HY accounting profit shouldn't be a shock to anyone. They are doing exactly what they said they would.

[RGR367]

Overall very pleasing results.

Owner Earnings still on track to be in a range of $90-$100M at the full year results.

Significant spend on transitioning the business, but I like what they have spent the money on so far.

The low HY accounting profit shouldn't be a shock to anyone. They are doing exactly what they said they would.

I think it's good enough for a punt from 60 and downward.

[Entrep]

This is one helluva case study on the dangers of knife catching

[macduffy]

I think it's good enough for a punt from 60 and downward.

!!!! Would you like to re-phrase that, RGR?

:ohmy:

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12308036

Agree that the low price is divorced from the reality of where the business is currently and how earnings are likely to play out over the next few years.

I did a reverse DCF earlier to get a sense of what would have to happen...from where they are currently...in order for a market cap of $265.6M to be a fair value.

It can be shown that underying Owner Earnings would need to drop by 35% per annum every year from 2020 - 2030 for the current market cap to make any sense.

Is that likely to happen? No, not at all.

[RGR367]

!!!! Would you like to re-phrase that, RGR?

:ohmy:

My speculative money is on buy at 60 cents yesterday and would try to get more if it goes down.

disc: never been a holder of this stock and not a subscriber too

[Entrep]

From Craigs:


even after the catastrophic fall in share price SKT is still trading in-line with its 5 year average historical PE of c10x at Gardiners revised Target Price of 59cps. Catching a falling knife is difficult and Gardiner’s recommendation is Hold, stay on the side-lines for now.

[Preston]

From Craigs:

I also remember hearing Craig’s telling people publicly that of all the retirement stocks, they only recommended Ryman and not the others. So I bought MetLife because like everyone else here it looked actually like it had a lot of upside. That was about 4.30.
Not saying skt will be as straight forward, but on the balance of it they are doing what they said they’d do and they have said there is more pain to come before the investments will deliver. Fellet drove this company into the deep hole it is in and it will take some skillful scrambling to get out. It can be done...but we shall see.

[mistaTea]

Not saying skt will be as straight forward, but on the balance of it they are doing what they said they’d do and they have said there is more pain to come before the investments will deliver. Fellet drove this company into the deep hole it is in and it will take some skillful scrambling to get out. It can be done...but we shall see.

Agreed 100%.

Sky TV are definitely doing the right thing - there are no guarantees in this life, nor are there guarantees in terms of how much the significant investment will pay off, but what is the alternative? They have a large customer base, and still generate significant cashflows...and I personally think the odds are in their favour for transitioning the business and building a sustainable future.

They have responded to all of the criticisms the 'experts' have dished out at them - and done so very quickly.

I do feel bad for the workers at Sky. They are doing an incredible job, and working really long hours to get these projects over the line - yet the company still gets a huge amount of flak. Hopefully only short term noise, and I hope they are celebrating their successes anyway.

[mistaTea]

https://home.nzcity.co.nz/news/article.aspx?id=306559

"Its coverage of last year's Rugby World Cup was marred by technical issues.

But Spark's reporting a four percent revenue increase for 2019 ... to 1.82 billion dollars.

CEO Jolie Hodson says Spark Sport is a part of that - albeit small.

She says her focus is investing in the platform and consumer propositions... then looking at other content rights or partnerships.

Spark says mobile was its stand-out performer in 2019."

Do we know anyone in NZ that might make a good partner?

[tga_trader]

Do we know anyone in NZ that might make a good partner?

Spark could make a tidy side business out of developing products to compete with SKY, and then sell said product to SKY. I wonder if there was a clause in the sale of Lightbox that Spark wouldn't enter the TV/movie streaming market again.

[mistaTea]

See Vocus has now confirmed that the NZ Business is likely to split from the Aussie parent. Not sure if that means they will IPO.

Sky have said they are looking at broadband. They could get a wholesale deal with Orcon - or maybe some other arrangement.

Who knows - but when you see Spark drop a bunch of wedge on Sky Sport...lose money on the endeavour and yet still lift earnings overall it does make you think.

And Martin Stewart is right that they Sky need to keep finding new ways to diversify revenue.

I think 2020 is going to be a big year for telco and media

[Preston]

Might be clutching at straws a little here. Not a heck of a lot else going on. Some divergence on the chart but not a lot on the indicator. One to watch

11041

[airedale]

I think that a monthly chart going back a few years would be a good indicator for a genuine break out on SKT.

[Preston]

I think that a monthly chart going back a few years would be a good indicator for a genuine break out on SKT.

Yep 👍

Agreed.

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12311194

Interesting.

[ados_nz]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12311194

Interesting.

For the people who's dividends dont finance a premium sub yet....

https://www.sportbusiness.com/news/cvc-to-reshape-rugby-after-rights-holder-deals/

[Sideshow Bob]

Sub 60c today.......who is in??

[RTM]

Sub 60c today.......who is in??

No rush.....

[RGR367]

My speculative money is on buy at 60 cents yesterday and would try to get more if it goes down.

disc: never been a holder of this stock and not a subscriber too

Took 12 days of waiting to get hit at 60 yesterday so I'm in. And now try to get some more at much lower sp.
GL to all who are having a punt too.

[RGR367]

Took 12 days of waiting to get hit at 60 yesterday so I'm in. And now try to get some more at much lower sp.
GL to all who are having a punt too.

Got hit again at 50 today so maybe some needed money so let's try one last time at a much lower price to exhaust my budgeted punt money on it.

[winner69]

Got hit again at 50 today so maybe some needed money so let's try one last time at a much lower price to exhaust my budgeted punt money on it.

Jeeez .... thought you were joking about that 50 cents

[flyer]

I thought I was doing good getting more at 56c🙁

[youngatheart]

Thought experiment but wouldn't SKT shares do well as soon there'll be loads of people self isolating themselves at home with nothing to do but watch TV?...

[stoploss]

Thought experiment but wouldn't SKT shares do well as soon there'll be loads of people self isolating themselves at home with nothing to do but watch TV?...
Watch Netflix ......

[mistaTea]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12313136

Never did like that Higgins guy - always seemed to be a bit slimy for my liking.

Nothing at all wrong with hoping to cash in on competition - but the delivery of his message is pretty average. Essentially, "Sky have been a wonderful partner...have helped grow Parker fom nothing into the success (by NZ standards anyway) that he is. However, if we even get a whiff that we might be able to get a few more $$$ then cya later Sky, long-term partnership be damned!".

I doubt Sky make very much money on the Parker fights. I am a boxing fan, and happily forked out the $39.99 for the Fury v Wilder fight but would not pay anything above my normal Sky Sport sub to watch Parker.

So I doubt Sky are going to get into a heated auction to retain Parker.

Personally, I don't know why DANZ don't just buy Sky given it is at a record low market cap. Rugby rights alone are worth $400M and the market cap has been as low as $220M. Rather than enter NZ with their own offering, which will not attract a lot of subs with boxing alone.. they will run at a loss for God knows how long...

They could buy Sky and imemdiately have close to 1,000,000 subs. Obviously they would have to pay a lot more than the current market cap to buy the whole company. Probably US$500M would do it - less than the total value of Sports rights alone that Sky hold and chump change for these guys.

[winner69]

Sad watching the very last cricket test to be shown on SKY

As Smithie and his mates lamented their demise I couldn’t help think I was also watching the demise of SKY

[mistaTea]

Sad watching the very last cricket test to be shown on SKY

As Smithie and his mates lamented their demise I couldn’t help think I was also watching the demise of SKY

There will absolutely be a need for a good content aggregator now and in the future imo. It’s already hard to keep track of what is on each platform.

Imagine if Hulu, Showtime, FX, HBO, Vice, History Channel and all of their other content partners decided to go OTT.
Few of them would be able to make any money as standalone offerings and it would become a nightmare for consumers.

It is yet to be seen whether Sky are able to transition effectively and become that aggregator of choice in NZ - but they are giving it their best shot, and I think the odds are strongly in their favour.

Time will either prove that I am very wise...or incredibly foolish.

[k14]

There will absolutely be a need for a good content aggregator now and in the future imo. It’s already hard to keep track of what is on each platform.

Imagine if Hulu, Showtime, FX, HBO, Vice, History Channel and all of their other content partners decided to go OTT.
Few of them would be able to make any money as standalone offerings and it would become a nightmare for consumers.

It is yet to be seen whether Sky are able to transition effectively and become that aggregator of choice in NZ - but they are giving it their best shot, and I think the odds are strongly in their favour.

Time will either prove that I am very wise...or incredibly foolish.
The other massive benefit is that Sky has their satellite network. Go and talk to a motorhome/caravanner (or someone that lives in rural areas) and see what they think of now not being able to watch any cricket without expensive data plans (that's if their holiday destination even has cell coverage). I think Sky has got a big advantage in being able to reach 100% of the country without any middle man or requirement for additional infrastructure. NZ Cricket have missed the mark with this call and they will suffer for it long term. I think Sky will still be round for a while yet and I am saying this as someone who had them disconnected in September (after being a 15+ year subscriber) and has used sky sport now for the last 3 months. Streaming over broadband/4G is ok but satellite is so much easier and reliable.

[mistaTea]

The other massive benefit is that Sky has their satellite network. Go and talk to a motorhome/caravanner (or someone that lives in rural areas) and see what they think of now not being able to watch any cricket without expensive data plans (that's if their holiday destination even has cell coverage). I think Sky has got a big advantage in being able to reach 100% of the country without any middle man or requirement for additional infrastructure. NZ Cricket have missed the mark with this call and they will suffer for it long term. I think Sky will still be round for a while yet and I am saying this as someone who had them disconnected in September (after being a 15+ year subscriber) and has used sky sport now for the last 3 months. Streaming over broadband/4G is ok but satellite is so much easier and reliable.

Agreed - satellite is still a [narrow moat] competitive advantage for the reasons you point out. It is the only way to get 100% coverage of NZ in a reliable way. People will be quick to point out that you do get 'atmospheric conditions' errors with satellite - but that it very much the exception to the rule. As a whole it is very very reliable.

The problem is that it is now very expensive relative to streaming. John Fellet pointed out a couple of years back that he would love to be able to wave his magic wand and turn off the satellite - he would reduce his OPEX (pre-IFRS 16) by $50M or so. That would include all of the lease costs plus other supporting infrastructure.

Then you have to consider the cost of setting up new customers. Sending out a STB and a technician to get the customer sorted is another cost.

All of these costs add up and ultimately push the price of the bundles up. To make it worth Sky's while they also have to insist on a compulsory Starter package for $25. That is another hurdle for customers (it just would not be worth their while to sell SOHO for $9.99/month as a standalone...).
So even though satellite is very reliable etc, people are still leaving in droves because OTT providers have such cheap offerings that are 'good enough'.

That will all change soon though. Within the next couple of months we will see the two new offerings. The merged NEON-Lightbox... and the other platform that will allow you to stream entertainment and sport.

It is this second option that interests me most. As they will no longer have to send technicians out with set top boxes etc... the bundles they offer should be more competitively priced.

They should also have no issue offering SOHO as a standalone etc.

So yeah - satellite still has advantages but the business model can't compete effectively anymore. NZ Cricket made a big call ditching Sky after such a long partnership. Cricket fans now need to pay $60/month minimum (between Sky Sport NOW and Spark Sport) if they want to watch the cricket. So I can imagine there are some very unhappy people out there.

[Stranger_Danger]

There will absolutely be a need for a good content aggregator now and in the future imo. It’s already hard to keep track of what is on each platform.

.

There are multiple good content aggregators. Type "best torrent sites 2020" or similar into Google and it brings up a list of them.

Generally you will find, near the top of the list at least, everything is on every platform.

[mistaTea]

Type "best torrent sites 2020" or similar into Google and it brings up a list of them.


I am referring to legal streaming of course.

Theft has always been a problem for the industry and there will always be people who prefer to steal no matter how good or cheap Sky (or any other provider for that matter) make their offerings.

Why you would take on the moral hazard of theft when you can get a wide selection of great content on NEON for $13.95/month (only 47 cents per day!) is beyond me.

Those are not the people that they will be able to appeal to. It's more people like me who refuse to steal and don't want to p1ss around torrenting or using a VPN to try and find a free provider.

I just want to use a great app with a great selection of content for a reasonable price.

[Arbroath]

As a rural Sky satelitte subscriber and keen cricket fan how happy do you think I am?
No NZ cricket on Sky anymore and limited broadband means NZ cricket have lost me....d1ckheads
As my wife is an Aussie I think I'll have to just watch the sandpaper scrubbers

[winner69]

As a rural Sky satelitte subscriber and keen cricket fan how happy do you think I am?
No NZ cricket on Sky anymore and limited broadband means NZ cricket have lost me....d1ckheads
As my wife is an Aussie I think I'll have to just watch the sandpaper scrubbers

Sad day the other day eh (even though we did win the cricket)

Seemed to be another step closer to the demise of SKY

[steveb]

just a bit off topic but NZME have lost the radio broadcast rights as well.One has to ask if NZ cricket know what they are doing!

[mistaTea]

just a bit off topic but NZME have lost the radio broadcast rights as well.One has to ask if NZ cricket know what they are doing!

Well, they went for the bigger payday. Their long-term relationship with Sky or what is ultimately best for the cricket fan's back pockets didn't come into the equation really.

Spark Sport needed a top tier sport like Cricket and were prepared to pay a lot more money than Sky to gain the rights.

NZ Cricket's line that 'streaming is the future' is the reason they went with Spark is nonsense. Sky have a great streaming platform too - so they can distribute NZ Cricket's content via a modern streaming platform or satellite...whatever the consumer prefers based on their own personal circumstance.

If Spark Sport was the only streaming platform in NZ then fine, I could understand that argument. But it is not the case.

I would have had more respect for them if they were just honest to the fans and said "Yeah, you will have to pay more and watch all of the cricket over two different platforms...but we got a very big cheque doing it this way, and ultimately that is what mattered. Earnings maximisation."

Nothing at all wrong with maximising your earnings - but just be honest about it and accept the negatives (in terms of fan reaction) with the positives (more money).

[Jay]

When will it dawn on some people that subscribing to all these platforms is/will be costing an arm and leg - I "only" have sky - by satelittle- basic + sport and use Spark for the FI and WRC and maybe the local cricket this year now.
As mentioned above need a legal content provider, hang on there is was/one called Sky :)
If sky want to save a bit of money, why do they need 27 "commentators" at the Super rubgy/test games - 3 main commentatotrs, then another 1 or two do interviews then another 2-3 give half time/full time analysis and so it goes....
have they never heard of multi-tasking :confused:

[blackcap]

When will it dawn on some people that subscribing to all these platforms is/will be costing an arm and leg - I "only" have sky - by satelittle- basic + sport and use Spark for the FI and WRC and maybe the local cricket this year now.
As mentioned above need a legal content provider, hang on there is was/one called Sky :)
If sky want to save a bit of money, why do they need 27 "commentators" at the Super rubgy/test games - 3 main commentatotrs, then another 1 or two do interviews then another 2-3 give half time/full time analysis and so it goes....
have they never heard of multi-tasking :confused:

The same could be said for Radio Sport with their cutting the cricket commentary. I remember back 30 years ago when Bryan Waddle would commentate solo the whole day. There were a few ad breaks (time for him to have a drink etc) from time to time, but heck it would have been a whole lot cheaper than the plethora of comms with them switching around every 20 minutes like they are doing currently.

[Dlownz]

You have to wonder if sky could be a takeover target. Just for the sports rights alone. But when the rugby rights do come up for renewel in years to come are they even going to be offer the same sum as last time. I don't see any major rise in share price till August when there next results due. But also would anyone want to try to take over such product this year with everything being so unstable

[mistaTea]

You have to wonder if sky could be a takeover target. Just for the sports rights alone. But when the rugby rights do come up for renewel in years to come are they even going to be offer the same sum as last time. I don't see any major rise in share price till August when there next results due. But also would anyone want to try to take over such product this year with everything being so unstable

I am surprised that there have not been any takeover offers. DAZN, for example, could buy Sky right now and immediately have close to 1 million customers. They have ambitions to go far beyond boxing, and RugbyPass would come with the deal. If they didn't want to keep the entertainment arm they could split that off and focus on sports.

It would make more sense in my mind for DAZN to buy Sky since it's SP is in the toilet rather than compete for rights against both Sky and Spark (and therefore pay premium pricing)

Then there is CVC partners who also want to make a big move into sport.

It could be that there have been expressions of interest - but no offers made, and the indicitive prices given may be so low that the board have already said no.

Market cap closed yesterday at $222.4M. Any thoughts on how much an offer would need to be to take the company private?

Given the value of the rights held alone, I think a serious buyer would have to offer 3 to 4 times the current SP to realistically succeed.

[Sideshow Bob]

I am surprised that there have not been any takeover offers. DAZN, for example, could buy Sky right now and immediately have close to 1 million customers. They have ambitions to go far beyond boxing, and RugbyPass would come with the deal. If they didn't want to keep the entertainment arm they could split that off and focus on sports.

It would make more sense in my mind for DAZN to buy Sky since it's SP is in the toilet rather than compete for rights against both Sky and Spark (and therefore pay premium pricing)

Then there is CVC partners who also want to make a big move into sport.

It could be that there have been expressions of interest - but no offers made, and the indicitive prices given may be so low that the board have already said no.

Market cap closed yesterday at $222.4M. Any thoughts on how much an offer would need to be to take the company private?

Given the value of the rights held alone, I think a serious buyer would have to offer 3 to 4 times the current SP to realistically succeed.

Could make an on-market takeover? Most of the major shareholders are custodial services and nominees - accounts for more than 50% of the shares and at least 7 of the top 20 shareholders.

Not sure what this would mean for a potential takeover, would think it would mean any party couldn't get a large block of shares easily?

[mistaTea]

Could make an on-market takeover? Most of the major shareholders are custodial services and nominees - accounts for more than 50% of the shares and at least 7 of the top 20 shareholders.

Not sure what this would mean for a potential takeover, would think it would mean any party couldn't get a large block of shares easily?

Not sure about on market buying. Possible - but trading volumes are low so it would be a slow process. Once 5% was achieved they would have to declare, and that would cause the SP to explode as speculation of a takeover offer spread.

Will have to wait and see if anything happens - but it would be a relatively cheap entry into top tier sport for a company like DANZ. Let's say, for arguments sake, they offered US$500M (which would equate to about NZ$1.82 per share). Chump change for these guys - but they would get close to 1 million subs right away, RugbyPass and a huge inventory of content. The content rights that have been secured over the next 5 years alone would be worth over NZ$1B. Over hald of that would be sport.

And, of course, they would be taking out a major competitor to sports rights - making it easier to win content at a reasonable price in the future.

If they are going to compete against both Sky and Spark, they would end up spending more than US$500M anyway over the next 5 years or so. Would seem like a much harder and more expensive path to me!

[Entrep]

Buying or holding a share in hopes of a takeover never ends well IMO

[mistaTea]

Buying or holding a share in hopes of a takeover never ends well IMO

Agreed - and I am not actually 'hoping' for anything in terms of a takeover.

I am just pointing out that it is a bit of a surprise that nobody has launched a takeover offer for Sky (given the record low SP) and for companies like DAZN who are looking to enter the market...it would seem like the path of least resistence. But I could be wrong.

Nobody should be buying Sky (or any other company) based on a prayer that someone else will come along later with a juicy takeover offer. You only buy if you think the business has merits as an investment.

[flyer]

Down and touched 40c. If I had to stay home to isolate then SKY would be a no brainer to have ( which I do).
Disc: hold shares and will get more at these prices.

[blackcap]

Down and touched 40c. If I had to stay home to isolate then SKY would be a no brainer to have ( which I do).
Disc: hold shares and will get more at these prices.

I just topped up some more at 41. Seems too good a price to ignore.

[moimoi]

The $100M bond due in 12 months potentially unable to be refinanced in full in the current volatile credit environment....

[Ogg]

The $100M bond due in 12 months potentially unable to be refinanced in full in the current volatile credit environment....

They make more than that every year.

The issue is that all sports events maybe canceled for the next year.

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12316374

[moimoi]

Profit for the 6 months to 31 December 2019 was $11.8M

It will be even less than that in the second half as increased programming costs kick in...

[Ogg]

Profit for the 6 months to 31 December 2019 was $11.8M

It will be even less than that in the second half as increased programming costs kick in...

EBITDA is 240m.

Debt isn't an issue. Borrowing costs are dropping too.

[Ogg]

The problem is, in a downturn, will people pull back on spending like paid TV and just stick to regular free to air TV.

Also, if the entire rugby season is canceled will everyone drop sky?


Dicsl: Non holder.

[ratkin]

May as well cancel the sports channel, going to be nothing to watch

[steveb]

May as well cancel the sports channel, going to be nothing to watch
they would have thousands under contract for various time periods which would offset the subscribers jumping ship or changing plans.That is as long as Sky can enforce these contracts,and get away with it

[Sgt Pepper]

Agreed - and I am not actually 'hoping' for anything in terms of a takeover.

I am just pointing out that it is a bit of a surprise that nobody has launched a takeover offer for Sky (given the record low SP) and for companies like DAZN who are looking to enter the market...it would seem like the path of least resistence. But I could be wrong.

Nobody should be buying Sky (or any other company) based on a prayer that someone else will come along later with a juicy takeover offer. You only buy if you think the business has merits as an investment.

Sometimes a company has both underlying strong performance and additionally offers the prospect of a takeover at a premium. Tower Insurance , I believe, falls into this category

[mistaTea]

New travel restrictions will have massive impact on Super Rugby, NRL etc now.

Will be interesting to see how this unfolds.

Current market cap is now equal to the low range of the FY20 EBITDA guidance given.

Unreal.

[GR8DAY]

........my take........ subscriptions will skyrocket with self isolation and the general fear of socializing etc. Prospects of a take over at current SP just gone up several notches.

[stoploss]

........my take........ subscriptions will skyrocket with self isolation and the general fear of socializing etc. Prospects of a take over at current SP just gone up several notches.

A lot of sport being cancelled , so maybe they take up Netflix instead ????

[k14]

Does anyone have an idea what the clauses in the rights deals Sky has might say for situations when the sporting event is cancelled? Will Sky still have to pay the sporting org the rights fee if the event doesn't take place? Same for advertisers, will the advertisers still pay Sky the ad fees?

[Sideshow Bob]

A lot of sport being cancelled , so maybe they take up Netflix instead ????

Sky is a pretty unappealing product for me without sport.

Self-isolation comes, could put me into a stupor watching the Living Channel for 2 weeks......

[Beagle]

This "we must win rugby coverage at any price" stratagy and that's the panacea of all our troubles was always a very high risk and poorly conceived one in my opinion.
Its clear the board and the CEO are sports enthusiasts who have no idea that people tune in for many other reasons including movies, CNBC, news e.t.c.

They are the author's of their own demise and while this is a thread I seldom comment on I made the comment several times late last year that this stock is un-investable with the current board and strategy. A substantial number of people couldn't care less about sport but the board has no understanding of this basic fact.

[Entrep]

Sky TV closed at 30.5c (-22%) and is now -57% YTD. SKT now trades with negative equity (market cap of $133m, net debt of c$200m) (Craigs)

[blackcap]

Sky TV closed at 30.5c (-22%) and is now -57% YTD. SKT now trades with negative equity (market cap of $133m, net debt of c$200m) (Craigs)

That negative equity is a bit of a misnomer. Yes their market cap is less than their debt. However when their market cap was higher than debt, from an accounting perspective their NTA was still negative. Their assets are not affected by the SP. It may make it more difficult for them to raise equity should they require it.
If I was an entrepreneur with limitless pockets, I would buy SKY now at these prices, not invest in the business but just take the future cashflows that will well exceed the Market Cap that I had to pay for the business.

[mistaTea]

One thing investing in Sky TV has taught me - I clearly have no idea how low this stock can go.

Just incredible.

Current market Cap is $126.4M - below the low range of forecast adjusted EBITDA for FY20 ($170M - approx $30M Optus lease = $140M).

No doubt there will be some impact on earnings - but how much is far from clear. It looks like NZ Rugby are collaborating with Sky to keep a NZ derby tournament going so fans can still enjoy some live rugby.
Super Rugby will probably be cancelled for 2020, but that is not certain yet. I think I read that they could delay for up to 5 weeks and still be able to finish the season.
The constant barrage of coronavirus stories makes it seem unlikely things will have calmed down enough in 5 weeks. But we shall see.

And the Warriors are staying in Australia so they can strill participarte in the NRL.

Sport subs will be affected I am sure, but it is also reasonable to think that Sky's entertainment offerings will pick up to some degree if people are going to be staying at home more often. Might pick up more NEON subs and lower churn of existing entertainment package customers cancelling their subs. Customers who do decide to suspend their Sport package may spend some savings by picking up other content like SOHO, Rialto etc.

Not all doom and gloom imo, and depending on how it all plays out the earnings guidance provided previously may not change significantly.

[Sideshow Bob]

One thing investing in Sky TV has taught me - I clearly have no idea how low this stock can go.

Just incredible.

Current market Cap is $126.4M - below the low range of forecast adjusted EBITDA for FY20 ($170M - approx $30M Optus lease = $140M).

No doubt there will be some impact on earnings - but how much is far from clear. It looks like NZ Rugby are collaborating with Sky to keep a NZ derby tournament going so fans can still enjoy some live rugby.
Super Rugby will probably be cancelled for 2020, but that is not certain yet. I think I read that they could delay for up to 5 weeks and still be able to finish the season.
The constant barrage of coronavirus stories makes it seem unlikely things will have calmed down enough in 5 weeks. But we shall see.

And the Warriors are staying in Australia so they can strill participarte in the NRL.

Sport subs will be affected I am sure, but it is also reasonable to think that Sky's entertainment offerings will pick up to some degree if people are going to be staying at home more often. Might pick up more NEON subs and lower churn of existing entertainment package customers cancelling their subs. Customers who do decide to suspend their Sport package may spend some savings by picking up other content like SOHO, Rialto etc.

Not all doom and gloom imo, and depending on how it all plays out the earnings guidance provided previously may not change significantly.

Indeed, I have no idea either! It is pretty incredible that holders are looking to get out at this level......presumably many would have bought at anywhere between 1-6 x this price - or possibly even more!! :scared:

Just like Spark making Spark Sport free, I think some sort of carrot for subscribers would go along way - like a couple of free movie channels. I bet a few people at Sky are busily looking up contracts and whether they still have to pay while almost all major sports are cancelled and no live games.

Otherwise I'm due to give them a call and cancel sport or similar.

[bull....]

without sport im afraid ... the end is near

[Sideshow Bob]

Update today:

Sky withdraws guidance for year ended 30 June 2020
18/3/2020, 8:59 amMKTUPDTE Sky withdraws guidance for year ended 30 June 2020
18 March 2020
Due to increasing uncertainty surrounding the Covid-19 outbreak, Sky Network Television Limited (NZX/ASX:SKT) has today announced that it is withdrawing its Revenue and EBITDA guidance for the year ended 30 June 2020.

The responsible actions taken by the New Zealand Government and sports administrators to combat the spread of Covid-19 has impacted upon a number of the live sporting events for which Sky holds broadcasting rights. While several sports such as the NRL, the A-League and the ANZ Premiership Netball are currently adapting by playing without fan attendance, and New Zealand Rugby is looking at innovative ideas for a short-term local derby, Sky recognises the potential for further disruption.
While the company has options to recover some costs associated with sports content rights, Sky is aware of the crucial role it plays in the sport ecosystem in New Zealand. Decisions made now have the likelihood of impacting on the health and sustainability of New Zealand sport for some years to come.
As a business with a strong focus on delivering sport content to its customers, the sustainability of New Zealand sport is an important consideration. In the first instance, Sky is working closely with its content partners to develop the best possible package to deliver to customers. Sky is also able to draw upon its extensive library of marquee sporting events covering a range of codes and tens of thousands of hours of premium content, documentaries and original production.
Sky’s entertainment offerings, available through both the Sky satellite platform and its Neon and Lightbox streaming services, continue to deliver a high-quality line-up of content.

Chief Executive Officer, Martin Stewart commented: “In these unprecedented times, our focus remains on working with our sport partners and the wider network of rightsholders and suppliers to deliver on our promise of connecting New Zealanders with the sport and entertainment content they love in ways that work for them. The Sky team is working hard to deliver content our customers value to keep them connected, entertained and inspired during this challenging period.”
“Sky fully supports the New Zealand Government’s response to the current situation which is in the best interests of our communities.”
Sky is taking decisive actions including the reduction of operating expenses, deferring non-essential capital projects and implementing a travel and hiring freeze. Appropriate measures are in place to protect the health and wellbeing of Sky people, following best practice and the guidelines provided by the Ministry of Health.
Sky expects to host an Investor Day when the Covid-19 impacts are better understood.
ENDS

[blackcap]

Otherwise I'm due to give them a call and cancel sport or similar.

I'm in that boat too. But if I give up sport I would cancel my whole sub and that is at $98 per month. SKY need to come to the party fast to subscribers before it is too late. I am giving them another week. If I don't get movies or such like for free its bye bye to your $98 per month from me. No use putting on a whole host of past sporting events. That kinda **** does not flow with me.

[mistaTea]

I'm in that boat too. But if I give up sport I would cancel my whole sub and that is at $98 per month. SKY need to come to the party fast to subscribers before it is too late. I am giving them another week. If I don't get movies or such like for free its bye bye to your $98 per month from me. No use putting on a whole host of past sporting events. That kinda **** does not flow with me.

Will be interesting to see what they are able to do here. Adding movies for free for a month or two would be a great gesture to existing customers I agree.

And for customers that already pay for Starter + Entertainent + Movies/SOHO + Sport... give them MySky for free for a couple of months.

They don't have to bankrupt themselves with freebies, but a nice gesture would go a long way for sure.

Martin is very customer-focussed, so let's see what he does next.

[blackcap]

They don't have to bankrupt themselves with freebies, but a nice gesture would go a long way for sure.

.

Would it though? Because surely the marginal cost of providing movies to extra customers is zero? As it would be for sport or any other channel. Or have I read the situation incorrectly? Any goodwill they can generate now will be beneficial if they survive as a going concern. Because the current share price to me indicates the market things SKY is gone burger.

[mistaTea]

Would it though? Because surely the marginal cost of providing movies to extra customers is zero? As it would be for sport or any other channel. Or have I read the situation incorrectly? Any goodwill they can generate now will be beneficial if they survive as a going concern. Because the current share price to me indicates the market things SKY is gone burger.

There are some incremental costs they have to pay to their entertainment content owners on a per subscriber basis.

So if they started giving movies etc away for free there will be a cost to Sky. I can’t quantify how much though.

[RTM]

I am a sailor and enjoy watching sailing on TV.
The 18's in Sydney are a good watch.
This is streamed on facebook live. And 18footers.com.au
https://www.18footers.com.au/18-footers-sailing/18-footers-tv/
This, or a variant, seems to be the future to me.
Not sure how long it will take, but yes, SKY looks like gone burger to me.
Without sport....why would I pay to subscribe to SKY ?

[mistaTea]

I am a sailor and enjoy watching sailing on TV.
The 18's in Sydney are a good watch.
This is streamed on facebook live. And 18footers.com.au
https://www.18footers.com.au/18-footers-sailing/18-footers-tv/
This, or a variant, seems to be the future to me.
Not sure how long it will take, but yes, SKY looks like gone burger to me.
Without sport....why would I pay to subscribe to SKY ?

The majority of their subscribers currently subscribe to Sky for their entertainment offerings.

Sport is a significant minority of their subs, and without sport there would be a big hole in their offering for sure - but I also think we need to keep some perspective here too.

Why do you think that Sky Sport will be permanently damaged by current events? We don't know how severe the impact will be - and I am pretty sure life will go on and professional sport will continue once this blows over.

Unless coronavirus causes Sky to go bankrupt (not likely), then I don't see how current events affect the Business Case long term.

[moimoi]

What a woeful level of information provided in this announcement for current or potential owners to base decisions on..

The company needs to provide disclosure on what the following are...

"the company has options to recover some costs associated with sports content rights"

And disclose the level of cancellations being received both in total and package by package, and signups. (if there are any...)

They could take a leaf out of the SKC Covid announcement, also provided today, which has provided a line by line breakdown of month to date impacts.

[steveb]

Sky should press NZ Rugby to bring forward the Mitre 10 cup.They don't get huge crowds so the loss of gate reciept's would not be huge.Sky could keep their large outside broadcast team gainfully employed,and hey you never know,but with the lack of sport around they could even sell some overseas rights!

[winner69]

Sky should press NZ Rugby to bring forward the Mitre 10 cup.They don't get huge crowds so the loss of gate reciept's would not be huge.Sky could keep their large outside broadcast team gainfully employed,and hey you never know,but with the lack of sport around they could even sell some overseas rights!

…..even that must be in danger of not going ahead

TV said last night that club rugby (except nippers grade) been cancelled until late April

[Sideshow Bob]

I'm in that boat too. But if I give up sport I would cancel my whole sub and that is at $98 per month. SKY need to come to the party fast to subscribers before it is too late. I am giving them another week. If I don't get movies or such like for free its bye bye to your $98 per month from me. No use putting on a whole host of past sporting events. That kinda **** does not flow with me.

They aren't doing anything on sport in terms of specials etc. I called them.

They said there was still live NRL and netball.

FFS :mad ;:

[RTM]

The majority of their subscribers currently subscribe to Sky for their entertainment offerings.

Sport is a significant minority of their subs, and without sport there would be a big hole in their offering for sure - but I also think we need to keep some perspective here too.

Why do you think that Sky Sport will be permanently damaged by current events? We don't know how severe the impact will be - and I am pretty sure life will go on and professional sport will continue once this blows over.

Unless coronavirus causes Sky to go bankrupt (not likely), then I don't see how current events affect the Business Case long term.


"The majority of their subscribers currently subscribe to Sky for their entertainment offerings."

I am imagining you mean entertainment excluding sport with this statement.
Really ? Even with the plethora of other options at much cheaper rates ? Sky is about the last thing I consider for entertainment. Without Sport....I would not even consider SKY.

I added the Sailing link as an example of how an individual sport can control their own destiny. This may become the future for sport. Or some variation of.

During this dearth of Live Sport on our TV's, people will find other options to amuse them. For some, the changes found might well be permanent.

Of course I am just one punter.

[mistaTea]

"The majority of their subscribers currently subscribe to Sky for their entertainment offerings."

I am imagining you mean entertainment excluding sport with this statement.
Really ? Even with the plethora of other options at much cheaper rates ? Sky is about the last thing I consider for entertainment. Without Sport....I would not even consider SKY.



Yes the vast majority have Sky for solely entertainment (no sport) or Entertainment + Sport. I remember John Fellet pointed this out 2 or 3 years back, and it is reflected in the satellite ARPU being $83/month. Someone just taking Starter + Sport pays about $56/month. If they take MySky then it is about $70.

If the majority of subs just signed up for Sport... with a minority who just signed up for Starter + Entertainment + Movies (SOHO is generally tacked on for free) that would be approx $70/month with a basic decoder and $85 with MySky.

Drop the Entertainment component and it becomes $45/month basic decoder and $60/month MySky.

So one would expect ARPU to be much lower if your suspicion was correct that the vast majority of people sign up to Sky to only get the sports channels...

What is very clear to me is that this business is all about relationships. No broadcaster has the same level of great relationships that Sky currently has with its partners - both sport and general entertainment.

Sky have a massive opportunity to prove their worth to the Sporting codes while they are really hurting - to show them that they have a symbiotic relationship. Sky does not do well when they hurt - and they do not do as well when Sky hurts.

For what it's worth, my prediction is that once we get out the other side of this difficult time, these relationships will be even stronger than ever.

[macduffy]

For what it's worth, my prediction is that once we get out the other side of this difficult time, these relationships will be even stronger than ever.

Perhaps, but meanwhile, how many of those subscribing for sports will be happy paying for repeats and, possibly, games played in empty stadiums?
Personally, I subscribe for live sports and the BBC World news. Without the former I'll be saving my money, at least until things get back to resembling something like "normal".

[mistaTea]

Perhaps, but meanwhile, how many of those subscribing for sports will be happy paying for repeats and, possibly, games played in empty stadiums?
Personally, I subscribe for live sports and the BBC World news. Without the former I'll be saving my money, at least until things get back to resembling something like "normal".

Yeah fair point. For me, I would rather watch the local derbie matches in empty stadiums as opposed to having no rugby at all. It is far from ideal - but this situation we are in is not ideal.

Depending on how many sports are cancelled, and how long Sky has a reduced offering - I imagine there will be a reasonably number of subs who want to either cancel altogether or put the sport component of their package on hold.

Sky may need to look at what sweeteners they can offer to keep their sports fans relatively happy.

I certainly don't have all the answers - and the Sky team are much smarter than I am. All I do know is that, from what I can see, a number of people are jumping to worst-case scenarios.

In my experience, that is pretty typical when it comes to Sky though! Ha!

[mistaTea]

Personally, I subscribe for live sports and the BBC World news...

Just picking up on a particular part of your comment...

Just to be clear - when a broadcaster refers to their ​live sports offering...it has absolutely nothing to do with whether or not there are any spectators in the stands. Live sport just means that the match is being played in real time.

Appreciate the viewing experience is not as good for the fan at home when the stands are empty...but spectator attendance is a separate issue.

At this moment in time, Sky are set to still have a number of live sports on offer. The punters will have to decide whether it is enough to keep them engaged.

Of course, if a large number of people do decide to pull the plug on the sport offering...the downstream affect is that they will be directly taking money away from the very sports they, presumably, want to support and see more of in the long-term. This probably wouldn't even occur to the average man on the street - but if Sky are forced to start exercising their contractual rights in terms of rebates etc...it will be devastating for NZ sport.

So if you are a sports fan - I would be hoping that it all works out well for all parties, and that Sky does not see a big drop in subs because of coronavirus. Rooting for this to be the final nail in the coffin would achieve somewhat of a pyrrhic victory for the Sky haters in my view.

[blackcap]

For me currently I have a $98 a month sub. But I really only have SKY for sport. I cannot be bothered getting rid of the other stuff, and sometimes i do watch CNBC, the Mrs likes the MYSky ability to record channel 1, 3 etc and I do also like Fox and CNN. So I reluctantly pay the $25 extra. But if there is no live sport that I want to watch on the offering, I am going to cancel the whole lot. SKY better come up with a sweetner, and all Movie channels would be a bare minimum or else its bye bye sub. You have 1 week SKY. This email I got about having past sporting events that I could watch and a lot of archive footage blah blah blah and its a difficult time at present... IS just not good enough.

[mistaTea]

For me currently I have a $98 a month sub. But I really only have SKY for sport...

To be fair mate, and with nothing but kindness in my heart...it is ridiculous (in my very humble opinion!) that you are paying damn near a hundy a month when the only content you really care for is Sport. Your other half doesn't need MySky for TV1 and 3 as there are apps for both where you can watch On Demand.

From a pure profit maximisation perspective I thank you for kicking so much money in the tin each month. But dude, you could get a NEON/Sky Sport combo for $53.94 per month (damn near half what you are paying). You get a great Sport streaming app with the sport you like (outside of coronavirus times) as well as access to HBO, Showtime, FX, Rialto which I am sure your lady would enjoy.

I can't see why you haven't just done that anyway if you truly value the rest of the content you only occasionally watch (CNBC etc) so little.

I have the old FANPASS pricing for my Sky Sport NOW sub ($38.95 per month). No doubt that helps me be a bit more philosophical than you about Sky's partners being forced to reduce their offerings in the short-medium term!

[ratkin]

Sky need to follow spark and make sport free for a while.
If they do not people are going to cancel, and will probably not come back.

[mistaTea]

Sky need to follow spark and make sport free for a while.
If they do not people are going to cancel, and will probably not come back.

Sky is in a completely different situation to Spark. Not a reasonable comparison at all imo.

[ratkin]

Sky is in a completely different situation to Spark. Not a reasonable comparison at all imo.

It up to Sky, but if they do not they will lose a lot of subscribers, many permanently

[blackcap]

To be fair mate, and with nothing but kindness in my heart...it is ridiculous (in my very humble opinion!) that you are paying damn near a hundy a month when the only content you really care for is Sport. Your other half doesn't need MySky for TV1 and 3 as there are apps for both where you can watch On Demand.

From a pure profit maximisation perspective I thank you for kicking so much money in the tin each month. But dude, you could get a NEON/Sky Sport combo for $53.94 per month (damn near half what you are paying). You get a great Sport streaming app with the sport you like (outside of coronavirus times) as well as access to HBO, Showtime, FX, Rialto which I am sure your lady would enjoy.

I can't see why you haven't just done that anyway if you truly value the rest of the content you only occasionally watch (CNBC etc) so little.

I have the old FANPASS pricing for my Sky Sport NOW sub ($38.95 per month). No doubt that helps me be a bit more philosophical than you about Sky's partners being forced to reduce their offerings in the short-medium term!

Totally agree with your sentiments. It is a combination of apathy and the Mrs just likes the remote that is so familiar. She would be frustrated with having to stream. My TV does offer streaming but I find it slower and the quality not as good as the SKY product so am willing to perservere for now. Till... they offer no sport when the whole lot goes out the window. So they would have to offer something good. We also have Netflix (via a vodafone offer) so not sure what SKY can do to come to the party except offer the movies. (Or a good discount on the sub)

[mistaTea]

Totally agree with your sentiments. It is a combination of apathy and the Mrs just likes the remote that is so familiar. She would be frustrated with having to stream. My TV does offer streaming but I find it slower and the quality not as good as the SKY product so am willing to perservere for now. Till... they offer no sport when the whole lot goes out the window. So they would have to offer something good. We also have Netflix (via a vodafone offer) so not sure what SKY can do to come to the party except offer the movies. (Or a good discount on the sub)

If you have a decent internet connection, you would much prefer Sky Sport NOW. The UI is much better than MySky. If your TV isn't up to snuff on the streaming front you can get a Chromecast 4K and it will do the job nicely. If you want an even better user experience you could get an Apple TV 4K (that's what I use and I have never looked back). HD quality live broadcasts, and I have not had any issues.

Only downside compared to satellite is that there is an approx 30 second or so delay. So if your mates are watching a match on traditional satellite be careful not to get any spoilers.

Then you can decide if you want to take the entertainment offering for $13.95. I stream NEON - the app is a bit average to use, but it is still a bargain for the amount of content.

OK that's enough of my sales pitch! - I genuinely hope you decide to make the change at some point and save some money mate. It is important that you feel you are getting a fair deal for the content you consume is important. Otherwise, when issues like the coronavirus occur 'The HULK' comes out thrashing because I suspect there is an underlying feeling all along that you are getting ripped off!

[flyer]

Sky are asking the question to current subscribers with possibility of showing a movie channel for free now there is stuff all sports.

[mistaTea]

Sky are asking the question to current subscribers with possibility of showing a movie channel for free now there is stuff all sports.

Did you get an email from them?

This will be music to blackcaps ears!

[blackcap]

Did you get an email from them?

This will be music to blackcaps ears!

That would be great.. have not heard anything from SKY yet but will keep my antenna alert tomorrow.
Might have a look at sky.co.nz for more info.

[Entrep]

Market capitalisation $111,237,762.09

I always thought that talk of Sky being a case study one day were a meme. This is astonishing!!

[blackcap]

The yield on Sky TV’s $100m bond has blown out to 11.5% as concerns rise about the fragility of the company’s balance sheet.

The 6.25% coupon $100 bond matures in March next year but last traded on the NZDX at $94.91.

https://www.nbr.co.nz/story/sky-tv-bond-yield-goes-though-roof?utm_medium=email&utm_source=NBR%20Today

Heavily discounted rights issue coming up according to article. Banking facility reduced to 150m and 100m bond issue are the pressers.

[moimoi]

rights issue?

[mistaTea]

rights issue?

I will assume you are asking what a rights issue is.

A rights issue is essentially a capital raise from existing shareholders. The company work out how much money they want to raise, and do so by issuing new shares to existing shareholders.

So shareholders who want to maintain their current % ownership of the business will exercise their rights and will buy the new shares. Shareholders who don't want to participate (or don't have the $$$ to do so...) forgo their option to buy the new shares and their ownership % is diluted correspondingly.

Assuming the raised capital is used effectively, then exiting shareholders who are able to exercise their full rights are not any worse off (and actually most likely end up better off long term).

However, with the SP being so low...those that are unable to participate could see their shareholding diluted so much that they end up worse off. So if they do go down this path it will be interesting to see how they structure it.

This is another reason why Sky being taken private would probably be best for the company. The current SP has completely divorced from earning power. But because the market cap is so low...it makes it impossible for them to secure new finance on decent terms. As has been pointed out, existing debt is higher than the value the market has put on the entire company. So what bank would want to lend more money to a company like that?

The ever-falling SP has been a self-fulfilling prophecy in many ways. If Sky was not a listed company I believe they would have a much easier time of it with their debt facilities.

Based on current Market Cap, a buyer could pay $335M to buy the entire company and clear all of the debt. Projected underlying earnings would have Sky earn the new owner the $335M back in 5 - 7 years.

Ok, so a buyer would not be able to buy the whole company for the current SP - they would need to pay a premium for control, and the price paid would ultimately need to be somewhat reflective of the value of the rights held etc.

But with the SP being in the toilet for so long, many existing shareholders will have been softened to the idea of selling the company for less than it is objectively worth.

[steveb]

How is sky in the uk doing?

[winner69]

Wonder what a “merged’ Sky/Vodafone would have looked like today?

[mistaTea]

Wonder what a “merged’ Sky/Vodafone would have looked like today?

Yeah, as things have transpired it has made the Comcom decision look even more questionable in my view.

I remember at the time Fellet and co got a bunch of flack for the proposed merger - commentary along the lines of Sky management waking up one day and thinking "OTT SVOD has arrived, we have no idea what to do about it...oh, I know! Let's do a merger!". As though it was a knee-jerk, panic move.

In reality, merging with the likes of Vodafone was a well considered plan to ensure the company's reslience as a value-add in the age of fast internet.

But what is done is done. As they say - wish in one hand, sh1t in the other - see which one fills up first!

I think a capital raise at this point in time would be too destructive in wealth to those shareholders who have supported the business over the years yet would not be able to participate.

My hope is that they can either:

1. Issue new bonds on reasonable terms to refinance the maturing $100M
2. Pay back the maturing $100M bonds using working capital and the remainder of their existing banking debt facility (which drops to $150M in July 2021.)
3. Actively work with the investment banking community to locate some buyers. Infratil, Foxtel, NBC, DAZN etc would all be viable candidates. With a large parent owning the company privately, refinancing debt would no longer be an issue.

On one hand I would be gutted if another NZ company was taken private (potentially by an overseas corporate) but the constant barrage of negative media commentary and general sentiment in the markets has potentially forced this outcome.

[mistaTea]

How is sky in the uk doing?

With Comcast as their new owners, I imagine Sky TV UK are fine and dandy.

[macduffy]

I will assume you are asking what a rights issue is.


I don't think so. Moimoi has been a member longer than any of us - since 2000! I think he/she was mulling the likelihood of a rights issue at this time.

[mistaTea]

I don't think so. Moimoi has been a member longer than any of us - since 2000! I think he/she was mulling the likelihood of a rights issue at this time.

In which case, sincere apoligies for teaching anyone how to suck eggs!

:scared:

[mistaTea]

Just increased my existing position by 12 percent @26c per share.

Unbelievably cheap at these prices in my view. But then I have been buying for the last couple of years and I keep saying that!

[blackcap]

Well done SKY for coming to the party. From the 25th March, they are giving me 3 months of the movie channel for free. That is a good move because i was nearly gone. So I will hang around a bit longer.
Not surprised they took this move but a little perplexed it took this long.

[blackcap]

Just increased my existing position by 12 percent @26c per share.

Unbelievably cheap at these prices in my view. But then I have been buying for the last couple of years and I keep saying that!

Make sure you keep some powder dry for the inevitable capital raise. 1:1 at 15 cents to raise $60m is not out of the realms of possibilities.

[steveb]

Well done SKY for coming to the party. From the 25th March, they are giving me 3 months of the movie channel for free. That is a good move because i was nearly gone. So I will hang around a bit longer.
Not surprised they took this move but a little perplexed it took this long.
Makes you wonder if they are not missing a trick by not giving open access to all channels for 3 months.After the 3 month period they could well find that their customers would want to keep the full coverage type of plan.

[ratkin]

Covid-19 has had a big impact on live sport. As we have been working through the changes to the Sky Sport schedule, we’ve been hearing from many of you about what you’d like to see us do. The overwhelming request is for more entertainment while we all wait for live sport to resume.
So, we’ve added 4 complimentary Sky Box Office Movies on demand per month to your subscription for the next three months.

The other half is happy, has some new movies to watch

[blackcap]

Interesting that you get a different deal Ratkin. I get the following:

So, we’ve added complimentary Sky Movies to your subscription for the next three months. There’s a great range of movies to keep you entertained. This will be available to view by Wednesday 25 March if not before. A change like this takes us a little while to roll out through our system!

[Entrep]

Where are you getting these messages?

[blackcap]

Where are you getting these messages?

Email.........

[mistaTea]

Make sure you keep some powder dry for the inevitable capital raise. 1:1 at 15 cents to raise $60m is not out of the realms of possibilities.

Given Martin Stewart was lamenting the low SP a few weeks back when it was above 65c...it would seem absolutely incredible to existing shareholders if a rights offer was contemplated now.

There will be many shareholders who are unable to participate in the offer. Some of these shareholders would have paid over $2/share.

To have their shareholding diluted by 50% for the sake of raising $60M would be criminal.

[blackcap]

Given Martin Stewart was lamenting the low SP a few weeks back when it was above 65c...it would seem absolutely incredible to existing shareholders if a rights offer was contemplated now.

There will be many shareholders who are unable to participate in the offer. Some of these shareholders would have paid over $2/share.

To have their shareholding diluted by 50% for the sake of raising $60M would be criminal.

You may call it criminal. But these times are unprecedented. What is the alternative? I cannot see anything but a rights issue and with the SP where it is currently it might have to be a 1:1 at 15 cents. No one is going to lend them any money in the current state. (I hope to be proven wrong)

[mistaTea]

You may call it criminal. But these times are unprecedented. What is the alternative? I cannot see anything but a rights issue and with the SP where it is currently it might have to be a 1:1 at 15 cents. No one is going to lend them any money in the current state. (I hope to be proven wrong)

I suppose it will depend on a number of factors.

The bonds are due in 12 months - so they don't have to do anything rash. If a capital raise is really the only possible way of getting their hands on more money, then they should at least wait until the end of the year.

Coronavirus should (hopefully!) be well and truly over by then....plus if their next annual report shows strong progress in streaming (their new streaming products will have been released...) then we might expect a bump in SP.

If the SP has risen significantly from where it is then it might be a no brainer to do a capital raise. If it is still sitting at where it is now due to ongoing issues with the virus and/or poor performance by the company...and they have truly exhausted all other options (including actively pursuing a buyer...) then I guess it is something we would all have to live with.

But I would be very disappointed if they go through with pushing ahead with a capital raise within the next 6 months given where the SP sits.

Do you have a view on what timings might be if they go down this path?

[moimoi]

Mista,

In my view sometimes one needs to look beyond what the company is saying, particularly if invested in the company.

A week or two ago you expressed surprise that no one had made an offer to take SKY over.

The value of the equity in SKY has fallen from $6 at the start of 2015 to 26 cents today.

Directors, neither past nor present, have been buying and there hasn’t exactly been a flood of folk trying to take the company private in that timeframe. Both are telling imo.

Poster Ogg told us a week ago the $100m bond wasn’t a problem.

IMO In the current environment that bond is quite possibly unable to be refinanced. (At least not in full)

The recent accelerating decline in the share price, (in spite of a reasonably logical view that if folk are quarantined at home for 14 days then you’d have to figure they would watch a bit of telly) coupled with increasing volume, suggesting knowledgeable and informed institutional investors, simply does not bode well.

They can’t leave the Bond refinancing until the end of the year. No board can sit there in December with a $100m debt repayable in March having not done anything about it.

A rights issue, assuming they could even get one away at this depressed level, would effectively mean many shareholders are going to be diluted out of existence. The catastrophic decline in the share price over such a long period (and it’s been one way traffic for a long time) is likely to mean many existing holders wouldn’t contribute funds to a cap raise.

There was a very well regarded poster on here about a decade ago. I periodically review one of his / her posts which is below.

(1)Don't buy stocks that are in a downtrend.
(2) Don't buy without first setting a point at which you will accept that you have made a mistake.
(3) When/if this point is hit, SELL. Immediately. You can always buy back when/if the trend reverses.
(4) Never add to a losing position. Don't average down. EVER.
(5) Be very careful not to get caught up in other peoples enthusiasm for a particular stock.
(6) Meticulous calculations of a stocks "worth" are meaningless if the market disagrees with you.
(7) Remember, if your opinion is at variance with market sentiment, YOU are wrong, not the market!

All the best with your investment.
GLTA.

[trackers]

Mista,

In my view sometimes one needs to look beyond what the company is saying, particularly if invested in the company.

A week or two ago you expressed surprise that no one had made an offer to take SKY over.

The value of the equity in SKY has fallen from $6 at the start of 2015 to 26 cents today.

Directors, neither past nor present, have been buying and there hasn’t exactly been a flood of folk trying to take the company private in that timeframe. Both are telling imo.

Poster Ogg told us a week ago the $100m bond wasn’t a problem.

IMO In the current environment that bond is quite possibly unable to be refinanced. (At least not in full)

The recent accelerating decline in the share price, (in spite of a reasonably logical view that if folk are quarantined at home for 14 days then you’d have to figure they would watch a bit of telly) coupled with increasing volume, suggesting knowledgeable and informed institutional investors, simply does not bode well.

They can’t leave the Bond refinancing until the end of the year. No board can sit there in December with a $100m debt repayable in March having not done anything about it.

A rights issue, assuming they could even get one away at this depressed level, would effectively mean many shareholders are going to be diluted out of existence. The catastrophic decline in the share price over such a long period (and it’s been one way traffic for a long time) is likely to mean many existing holders wouldn’t contribute funds to a cap raise.

There was a very well regarded poster on here about a decade ago. I periodically review one of his / her posts which is below.

(1)Don't buy stocks that are in a downtrend.
(2) Don't buy without first setting a point at which you will accept that you have made a mistake.
(3) When/if this point is hit, SELL. Immediately. You can always buy back when/if the trend reverses.
(4) Never add to a losing position. Don't average down. EVER.
(5) Be very careful not to get caught up in other peoples enthusiasm for a particular stock.
(6) Meticulous calculations of a stocks "worth" are meaningless if the market disagrees with you.
(7) Remember, if your opinion is at variance with market sentiment, YOU are wrong, not the market!

All the best with your investment.
GLTA.

Good post and great advice. Are you talking about Phaedrus? :)

[mistaTea]

Mista,

In my view sometimes one needs to look beyond what the company is saying, particularly if invested in the company.

A week or two ago you expressed surprise that no one had made an offer to take SKY over.

The value of the equity in SKY has fallen from $6 at the start of 2015 to 26 cents today.

Directors, neither past nor present, have been buying and there hasn’t exactly been a flood of folk trying to take the company private in that timeframe. Both are telling imo.

Poster Ogg told us a week ago the $100m bond wasn’t a problem.

IMO In the current environment that bond is quite possibly unable to be refinanced. (At least not in full)

The recent accelerating decline in the share price, (in spite of a reasonably logical view that if folk are quarantined at home for 14 days then you’d have to figure they would watch a bit of telly) coupled with increasing volume, suggesting knowledgeable and informed institutional investors, simply does not bode well.

They can’t leave the Bond refinancing until the end of the year. No board can sit there in December with a $100m debt repayable in March having not done anything about it.

A rights issue, assuming they could even get one away at this depressed level, would effectively mean many shareholders are going to be diluted out of existence. The catastrophic decline in the share price over such a long period (and it’s been one way traffic for a long time) is likely to mean many existing holders wouldn’t contribute funds to a cap raise.

There was a very well regarded poster on here about a decade ago. I periodically review one of his / her posts which is below.

(1)Don't buy stocks that are in a downtrend.
(2) Don't buy without first setting a point at which you will accept that you have made a mistake.
(3) When/if this point is hit, SELL. Immediately. You can always buy back when/if the trend reverses.
(4) Never add to a losing position. Don't average down. EVER.
(5) Be very careful not to get caught up in other peoples enthusiasm for a particular stock.
(6) Meticulous calculations of a stocks "worth" are meaningless if the market disagrees with you.
(7) Remember, if your opinion is at variance with market sentiment, YOU are wrong, not the market!

All the best with your investment.
GLTA.

That is a really good post, thank you so much for sharing. I particularly like the 7 points you share at the end - I will steal some of that add to my checklist.

I shared some sentiments on HotCopper the other day, that went a little like this...

"And time will tell if I am a brilliant investor, unswayed by market sentiment - only ever looking at the facts and forming my own views, Mr Market be damned.

Or a complete f*cking idiot who thinks too highly of himself and should stop destroying his family's wealth and just invest in the S&P 500."

I have done all my buying now, and am sitting at an average price of about $1 per share. That would give Sky a market cap of approx $436M - not much more than the value of the SANZAAR rights they hold for 2021 - 2025 (inclusive).

So let's see how we go - if it all goes horribly wrong for me, no doubt a period of deep self-reflection will be in order.

[blackcap]

Good post and great advice. Are you talking about Phaedrus? :)

I believe it was KW.

[mistaTea]

Before asking existing shareholders for more $$$ while the SP is so low and everything looks so grim with sport being postponed or cancelled, I would be negotiating with Westpac to see if the loan facility reduction can be delayed by 12 months. With a condition that no dividends can be paid until the loan facility is reduced to $150M (not that we were in any danger of that happening! Ha!)

Given the COVID-19 havoc that is being wreaked across the economy, banks seem to be playing their part in supporting business.

If they did that then the bonds could be repaid with earnings and the existing banking facility.

Raising capital now would really need to be an absolute last resort.

[Jay]

Interesting that you get a different deal Ratkin. I get the following:

So, we’ve added complimentary Sky Movies to your subscription for the next three months. There’s a great range of movies to keep you entertained. This will be available to view by Wednesday 25 March if not before. A change like this takes us a little while to roll out through our system!

I got the same blackcap, may be ratkin already has movies, as I did not

[mistaTea]

I got the same blackcap, may be ratkin already has movies, as I did not

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12318684

Yes the offer you receive is dependent on what packages you already have.

If you already have Sport + Movies, but not Entertainment then they will offer Entertainment for 3 months.

If you subscribe to the whole shebang, then they will give you 4 Box Office movies on the house (for three months I assume).

Condition will obviously be that you don't unsubscribe from Sport. Warrior playing today...and there is a good chance they will still have a NZ ruby comp at this stage.

So current sport subscribers could do ok out of this...still get a reasonable amount of live sport given the circumstances and some other content to try for free for a few months.

[trackers]

I got the same blackcap, may be ratkin already has movies, as I did not

Aww whatttt, I only got Entertainment and Soho lol

[mistaTea]

Aww whatttt, I only got Entertainment and Soho lol

Christ, that's like $35 a month worth! Lucky you.

I have Sky Sport NOW and have been offered zilch :eek2: They can't really give me a PROMO code for 3 months free NEON because I could take the offer and then end my sport sub anyway!

Different for satellite customers - they can control that more easily.

[moimoi]

Phaedrus, who in a post about downtrends was re-educating Tricha. ;-)

4 Box Office movies on the house per month for 3 months.

Caution warranted with comparing price paid for value of SANZAAR rights (or any other rights) against market cap. Price paid for sporting rights negotiated 3 months ago, won't equate to rights value now with said sports not being played.

GLTA.

[Entrep]

$85 million market cap. This is absolutely astonishing. Selling is relentless. I personally think SPK will come in and take this over when everything is said and done.

[steveb]

there's a lot of entertainment dollars out there not getting spent with a lockdown in 48 hrs this could be a boon for streaming services

[mistaTea]

Closing market cap $82M! Much lower trading volume but Christ Sky shares have been savaged!!

Fascinating times! Terrible times...but fascinating nonetheless!

[Ogg]

I finally caved today. Bought my first parcel of 72k shares at 19.4c.

It's likely to go lower tomorrow, do I average down?

[Entrep]

They will Need to cap raise via rights issue

[Ogg]

They will Need to cap raise via rights issue

That would be last resort. At least 6-9 months away. Lot of other options available. Interest rates only dropping.

Having said that, I would love them to do it now. I would subscribe in full. Dividends would likely resume soon after.

[mistaTea]

I finally caved today. Bought my first parcel of 72k shares at 19.4c.

It's likely to go lower tomorrow, do I average down?

26% return for you in one day!

Buffett could only dream!!!

[Ogg]

26% return for you in one day!

Buffett could only dream!!!

lol, yeah kind of ridiculous.

Wanted to buy some more though.

This has a tendecy to bounce and re-test the lows.

Only profit when you sell!

[mistaTea]

lol, yeah kind of ridiculous.

Wanted to buy some more though.

This has a tendecy to bounce and re-test the lows.

Only profit when you sell!

You aren't the only one who can brag mate! It's a great day for me today too! Instead of being down 80%, I am only down 75%!!

:t_up::D:t_up:

[Ogg]

Back to 19, lol. Might get the chance to top up after all.

[mistaTea]

I wonder if there is a big opportunity here for Sky with the Warriors/NRL.

If Sky choose not to claw back any of the money paid on the understanding that the NRL will sign back on for another 5 years from next year on the same terms as the last 5 years...

Win-win?

The warriors get to not go bankrupt...and Sky secure another very popular sporting code for another half decade...

[Playa]

I really hope Sky survive this,a lot of people knock them but they have been a great platform for watching sport for many years.

[mistaTea]

I really hope Sky survive this,a lot of people knock them but they have been a great platform for watching sport for many years.

I think their FY20 results will still be decent enough. If you think about it, the clamp down for sport really started in earnest mid March.

So they had already earned most of what they were going to earn for FY20 (which reports to June). There will be subscriber losses from this for sure, but they will have reatined many Sport existing subs by offering some freebies for the next few months.
And they do have a lot of replays and other features on at the moment for old matches - they have a large catalogue and some of the stuff could be worth a watch for nostaligia sake.

Assuming things can go 'back to normal' within the next few months, FY21 should be decent enough. The Sporting codes will want to get back to it ASAP (they need to start earning again!) and fans will be hungry for it too.

I see the SP did a big yo-yo yesterday. Up 30% only to crash back down to 19c. To suggest that the entire business could theoretically be purchased for $83M baffles me.

But you can probably all tell from now - it doesn't take ahelluva lot to baffle me! :t_up:

[steveb]

they would have quite a large catalogue of product on the rugby channel that they could start showing on sky sport.Perhaps a 4 week pass would be popular given the current 4 week isolation period starting tomorrow.Perhaps i'm wrong but I do see this as an opportunity for Sky to reach out to new and old customers,with good specials,and offers to keep people occupied, especially the kids who could well be driving their parents nuts fairly quickly.

[macduffy]

they would have quite a large catalogue of product on the rugby channel that they could start showing on sky sport.Perhaps a 4 week pass would be popular given the current 4 week isolation period starting tomorrow.Perhaps i'm wrong but I do see this as an opportunity for Sky to reach out to new and old customers,with good specials,and offers to keep people occupied, especially the kids who could well be driving their parents nuts fairly quickly.

I don't know about that. Unless one is a rugby "tragic" I think old games quickly pale - how many 2005 Lions tour games are enough? Personally, I've cancelled Sky Sport for the meantime, although SKY are slow to react to my cancellation. I'll give them the benefit of the doubt and blame circumstances.

[Crisis]

Loved some old contents that we missed previously. Nothing much to watch anymore. Some entertainment freebies are good but not enough. Sky may look for alternative ways of engaging young people, e.g. a sports channel for online play.

[Ogg]

Back up 30% now. What a ride, lol.

[mistaTea]

Back up 30% now. What a ride, lol.

Crazy times!

[airedale]

In a statement to the NZX today, Sky says that it has offered domestic customers a range of options during this period. This domestic customer has not heard anything from them. Has anyone else?

[flyer]

In a statement to the NZX today, Sky says that it has offered domestic customers a range of options during this period. This domestic customer has not heard anything from them. Has anyone else?

Yeah, they are meaning free movie channels to those that had the sports channels and cant watch sports.

[mistaTea]

In a statement to the NZX today, Sky says that it has offered domestic customers a range of options during this period. This domestic customer has not heard anything from them. Has anyone else?

Do you subscribe to Sky Sport? Only sport customers have been impacted...so they are the ones being offered some free add-ons if they keep their sport sub going.

I have Sky Sport NOW and as of yet have not heard anything. Not sure if they will add any kind of subsidy for me yet.

I pay so little I don't really care at this stage tbh.

Not like Blackcap! Christ Almighty! A hundy a month! Not only would I expect free movies, but I would also expect Martin Stewart to lick my bloody ass for that!

:eek2:

[blackcap]

Not like Blackcap! Christ Almighty! A hundy a month! Not only would I expect free movies, but I would also expect Martin Stewart to lick my bloody ass for that!

:eek2:

Haha!!

I am quite enjoying the selection of movies from the 7 channels. Have the MySky and been taping some of the ones on offer. So plenty to do during the 4 weeks, although I think markets will keep me pre-occupied most of the time.
Thanks again to Sky for coming to the party. Just in the nick of time as far as I am concerned.

[Ogg]

Hit 30 on the ASX today. Seems like there's more demand and less supply over there.

Was hoping to average down, but should I average up?

[Ogg]

Sky offers customers 'holidays' from Sport packages until July 1

https://www.stuff.co.nz/sport/rugby/super-rugby/120625303/coronavirus-sky-offers-customers-payment-holidays-on-sport-packages-until-july-1 (https://www.stuff.co.nz/sport/rugby/super-rugby/120625303/coronavirus-sky-offers-customers-payment-holidays-on-sport-packages-until-july-1)


" A very small number have ended up with a pause on their Sky Sport subscription, although we're finding the majority of customers are very keen to have Sky at the moment while they're at home and looking for entertainment."


"Almost everyone is keen to keep their Sky services at this time, given the huge range of content we are offering during the lockdown period, and there will be more to come."

[winner69]

I see Sky are starting an Olympics Channel

That’s cool

[morphs]

The bond market seems to think they might go bust. SKT020 bonds due for repayment 31/3/2021 now trading at 40% yield. Thoughts?

[Ogg]

The bond market seems to think they might go bust. SKT020 bonds due for repayment 31/3/2021 now trading at 40% yield. Thoughts?

I think what happened was that the market cap dropped below the total value of the bond level, which triggered automatic algorithmic selling.

Also, with the exception of Friday, volume has dried up, making it difficult to make a market, thus causing volatile pricing.

There's definitely uncertainty, but I don't think the market is (not yet anyway) thinking Sky will go bust.

[mistaTea]

The bond market seems to think they might go bust. SKT020 bonds due for repayment 31/3/2021 now trading at 40% yield. Thoughts?

Well, clearly those who are selling their bonds for such a low price (thereby pushing up the yield so fantastically) are worried that Sky won't be able to repay the $100M in a year.

At this time I don't think you can look to market behaviour and 'price action' in the financial markets for any kind of sense though.

After all, on Monday the market said Sky TV was only worth about $80M (only a little more than Sky paid to purchase RugbyPass!). By Friday the market said Sky TV was actually worth $130M (an increase of 62.5%) - even though nothing had really changed.

I am pleased that Sky seem to have limited the subscriber losses. I can see how existing customers would be keen to keep their existing packages if they can get more entertainment channels 'on the house' for the next 3 months. When things go back to normal, some customers may even choose to continue to subscribe to those extra packages if they enjoyed the content.

A friend of mine who subscribes to Sky Sport NOW received an email with a promo code from Sky to get 3 months of NEON for free due to coronavirus.

Still waiting for my email with promo code.

[blackcap]

I think what happened was that the market cap dropped below the total value of the bond level, which triggered automatic algorithmic selling.

Also, with the exception of Friday, volume has dried up, making it difficult to make a market, thus causing volatile pricing.

There's definitely uncertainty, but I don't think the market is (not yet anyway) thinking Sky will go bust.

They are now trading at a 50% yield. Interesting times. Plenty available at 50% as well. Does that mean the market is giving SKY about a 50% chance of folding? Sounds about right actually. At 30 cents per SKY share that is probably pricing in a 50% probability of collapse. If SKY were to survive then the SP should be above the 60's. IF you were going to enter into SKY what would be the best instrument now?
Really enjoying my free movies though. Good on you SKY.

[mistaTea]

I wonder if they will still sell OSB.

That would give some extra cash and also reduce OPEX moving forward.

Their ability to produce live local events is no longer a competitive advantage. Or a very narrow one.

[mistaTea]

https://www.rbnz.govt.nz/news/2020/04/longer-term-funding-to-support-business-lending

Hopefully these measures will make the possibility of Sky working with the banks to ensure it can use banking facilities to repay the bonds a real possibility.

As I have mentioned before, I think a capital raise at this point in time would be far too destructive to current shareholders who can't participate.

For the record, should Sky do a discounted rights offer - I would personally be in a position where I can fully participate. And, no doubt, it would probably be to my financial advantage to do so.

However I have a genuine concern for the poor b@stards who have paid north of, say, $1.50 a share... and have supported the company over the years yet would be absolutelty decimated by a capital raise with the SP being so low if they don't have available funds to participate.

I don't feel like I really 'win' if my business partners lose so heavily.

[RTM]

You are of course assuming that Sky survive MistaT.
They were already under pressure prior to the virus issue with other providers chipping away at their Sport offering.
No live sport.
People with no/lowered income will need to carefully assess where they spend their $’s.
Most I think will consider they need broadband.
But SKY with no live sport.....not so sure.
Especially with so many lower cost options. Netflix DISNEY YouTube etc.
Not for me.





https://www.rbnz.govt.nz/news/2020/04/longer-term-funding-to-support-business-lending

Hopefully these measures will make the possibility of Sky working with the banks to ensure it can use banking facilities to repay the bonds a real possibility.

As I have mentioned before, I think a capital raise at this point in time would be far too destructive to current shareholders who can't participate.

For the record, should Sky do a discounted rights offer - I would personally be in a position where I can fully participate. And, no doubt, it would probably be to my financial advantage to do so.

However I have a genuine concern for the poor b@stards who have paid north of, say, $1.50 a share... and have supported the company over the years yet would be absolutelty decimated by a capital raise with the SP being so low if they don't have available funds to participate.

I don't feel like I really 'win' if my business partners lose so heavily.

[moimoi]

SKY's near term future potentially foreshadowed by the recent KMD announcement...

[mistaTea]

SKY's near term future potentially foreshadowed by the recent KMD announcement...

Yeah you could be right mate.

[mistaTea]

You are of course assuming that Sky survive MistaT.


Yes, my previous comment is based on the view that Sky will survive long-term.

Obviously, if I did not think that then I would not participate in any discounted rights offer.

In fact I would be dumping my shares as we speak as 28c is a hell of a lot more than 0.

[mistaTea]

If I am wrong and Sky goes bankrupt then I will have a lot of egg on my face.

If I am right though, and Sky will continue as a going concern (however with much reduced earnings)...then the current market cap makes zero sense, and a capital raise at this point should be an absolute last resort.

Let's say the GAAP earnings fall all the way to $10M a year. We know that, due to the massive depreciation and amortisation charges Sky are able to charge, you can conservatively add $40M to the GAAP earnings to get a view of how much the underlying earnings are for the business owner. In this example, it Owner Earnings would = $50M.

Even if the market was incredibly pessimistic about the business and was only prepared to pay 5 times the underlying earnings... that would be $250M. Over double the current market cap.

Hell, Mr Market could only be prepared to pay 3 times underlying earnings that the market cap would still be higher than what it is now.

Given my confidence that Sky will survive their current challeges, do I think they will be able to generate GAAP earnings of at least $10M a year out into the future. Why yes, yes I do.

[steveb]

They agreed to paid $62m for rugby pass in august last year seems a lot of money now,does anyone know how it's going?

[mistaTea]

They agreed to paid $62m for rugby pass in august last year seems a lot of money now,does anyone know how it's going?

Not sure what their exact sub numbers were since Sky do not break them out separately.

However it would be fair to say that their subs will have taken a big hit due to COVID since they only stream rugby... and there is zero live rugby at the moment. Not sure if RugbyPass have offered their service free for the next 3 months like Spark Sport.

RugbyPass was a long-term play. 2020 is going to be an absolute write-off for the service I think, but if things get back to normal from 2021 there is no reason to believe RugbyPass cannot still be a success.

Half of that $62M was paid with shares...shares that are now worth about a quarter of what they were when the deal was done. So, that $31-odd million worth of shares issued are now only worth about $7M. I imagine RugbyPass are very motivated to turn things around ASAP to help lift the quoted price of their shares.

In my opinion, it does highlight how crazy things have gotten though. At one point Sky was valued as having a Market Cap of about $80M only. Even if they overpaid for RugbyPass... let's say for arguments sake RugbyPass was only actually worth half what they paid - $30M given where it is now in terms of subs. Forget the hype about the large upside etc...

Well, when the Market Cap of Sky was $80M that would imply that Sky TV's entire NZ operation is only actually worth $50M. I think that is absurd. If $62M was a fair value for RP the it would mean the rest of Sky was only worth $18M!!

I just took a peek at the current Market Cap = $118M. Using the same argument as above ('real' value of RP = $30M), the Market is effectively saying that Sky TV's NZ operation is only worth $88M. I think that is nuts when you consider the quantity and value of rights held from 2021, a satellite base with over half a million customers, and growing NZ-based streaming platforms - which now includes the popular Lightbox.

Do I think a rational owner would sell Sky TV's NZ operations for only $88M? Nope. Realistically, I think a rational owner would expect at least 5 times that for the NZ operations. Plus a 'fair value' for RugbyPass.

And of course it goes without saying - in my view the world would be a much more orderly place if everyone just saw things my way! :D

[youngatheart]

UBS bought in. Must be a good sign!

https://www.nzx.com/announcements/351202

[macduffy]

UBS bought in. Must be a good sign!

https://www.nzx.com/announcements/351202

Not just buying. A lot of "derivative contracts" there as well. Options to buy/sell? Borrowing stock to short?

[blackcap]

Could this be the lifeline SKT needs?

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12322344

"Debts will be able to be placed in hibernation until companies resume trading normally, if the majority of creditors accept."

I guess the onus is still on the creditors accepting though. But no problems for directors and insolvency, so may stave off a capital raise? Then again the SKT020's are trading at a 60% yield today!

[Ogg]

Could this be the lifeline SKT needs?

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12322344

"Debts will be able to be placed in hibernation until companies resume trading normally, if the majority of creditors accept."

I guess the onus is still on the creditors accepting though. But no problems for directors and insolvency, so may stave off a capital raise? Then again the SKT020's are trading at a 60% yield today!

Sky don't need a life line.

I averaged up today. Holding 100k shares :eek2:

[blackcap]

Sky don't need a life line.

I averaged up today. Holding 100k shares :eek2:

That is either brave or stupid :) Hope it works out well for you. Are you not concerned about the debt being at 55%?

[Ogg]

That is either brave or stupid :) Hope it works out well for you. Are you not concerned about the debt being at 55%?

Not really.

The maturity date is 1 year from now. That's an eternity. The stock was well north of $1 a year ago. It's also likely that this virus will pass by then.

The yield on the bonds is bazaar but it's low volume.

Even if they have to do a rights issue, I don't think it will be that bad for investors who are getting in at these levels. Let's say it's at 10c, I would fully participate and average down. Sky would then be in even better shape long term.

People aren't going to be canceling their Sky subscription. That opposite would be true. More people are watching TV now in this lock down. Sport will return one day. Sky did have problems, but look at the share price over 5 years! It's been smashed. Way over sold. Looks ripe for a take over but if that doesn't happen dividends will return in the medium term.

Risky yes, but you need to take some risk to make decent money in this market.

[Ogg]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351256/320330.pdf

Black Crane just bought 18m shares in the last 3 weeks. Wonder what they're up to?

[youngatheart]

I bought 47,000 shares this week too OGG. Let's see how this pans out :)

[mistaTea]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351256/320330.pdf

Black Crane just bought 18m shares in the last 3 weeks. Wonder what they're up to?

Looks to me like Black Crane are the mysterios 'Beneficial Owner' that was declared in the UBS announcement?

UBS London declared purchases of 3.3M shares on 30 March and 7M shares on 31 March.

Exactly the same as Black Crane's announcement. So he must have purchased those shares via a brokerage facility his fund has with UBS I assume.

Black Crane has been buying in when the stock was around 70c and doubled down when the price got crazy-low recently. From what I can see the founder is ex-UBS and a big Ben Graham/Warren Buffett fan. So he clearly formed the view that 70c represented a significant discount to the companies intrinsic value. I share his sentiment.

Good on them, I think they are going to make a lot of money on this investment.

[Ogg]

Looks to me like Black Crane are the mysterios 'Beneficial Owner' that was declared in the UBS announcement?

UBS London declared purchases of 3.3M shares on 30 March and 7M shares on 31 March.

Exactly the same as Black Crane's announcement. So he must have purchased those shares via a brokerage facility his fund has with UBS I assume.

Black Crane has been buying in when the stock was around 70c and doubled down when the price got crazy-low recently. From what I can see the founder is ex-UBS and a big Ben Graham/Warren Buffett fan. So he clearly formed the view that 70c represented a significant discount to the companies intrinsic value. I share his sentiment.

Good on them, I think they are going to make a lot of money on this investment.

They bought 20% of ASX:MMA recently.

https://www.asx.com.au/asxpdf/20200323/pdf/44g9qft7g8yvqh.pdf

Also bought up big stake in ASX:TPS.

https://www.asx.com.au/asxpdf/20191205/pdf/44c9rn9rcxh2rv.pdf

Black Crane is a deep value fund manager with significant corporate finance expertise, focused on small/mid cap companies in the Asia Pacific region. Black Crane partner with the boards and management teams of their investments to create value for all shareholders.

Looks like these guys pray on struggling companies, by building up a large stake in them, and then put their own guys on the board.

CEO Martin Stewart might be out of the job soon!

[mistaTea]

They bought 20% of ASX:MMA recently.

https://www.asx.com.au/asxpdf/20200323/pdf/44g9qft7g8yvqh.pdf

Also bought up big stake in ASX:TPS.

https://www.asx.com.au/asxpdf/20191205/pdf/44c9rn9rcxh2rv.pdf

Black Crane is a deep value fund manager with significant corporate finance expertise, focused on small/mid cap companies in the Asia Pacific region. Black Crane partner with the boards and management teams of their investments to create value for all shareholders.

Looks like these guys pray on struggling companies, by building up a large stake in them, and then put their own guys on the board.

CEO Martin Stewart might be out of the job soon!

Things could definitely become very interesting.

They may buy an even larger share and end up pushing The Board for a discounted capital raise. They will fully participate of course...further lowering their average price paid for the company.

Clear the $100M bonds and then see if the company gets a re-rate with a stronger balance sheet. All else being equal their debt would drop to $115, below forecast EBITDA (a metric I loath yet the investment community seem to love).

Peter Kennan won't care if existing shareholder wealth is destroyed in the process (I doubt, anyway!). If doing a capital raise is a mechanism for Black Crane making the most money then they will go for it (and there is absolutely nothing wrong or immoral about profit maximisation I might add. I certainly want to maximise my profits when I make an investment too!).

So the odds of a capital raise happening this year has just gone up in my mind. I better keep some powder dry as Blackcap has suggested!

[Ogg]

Things could definitely become very interesting.

They may buy an even larger share and end up pushing The Board for a discounted capital raise. They will fully participate of course...further lowering their average price paid for the company.

Clear the $100M bonds and then see if the company gets a re-rate with a stronger balance sheet. All else being equal their debt would drop to $115, below forecast EBITDA (a metric I loath yet the investment community seem to love).

Peter Kennan won't care if existing shareholder wealth is destroyed in the process (I doubt, anyway!). If doing a capital raise is a mechanism for Black Crane making the most money then they will go for it (and there is absolutely nothing wrong or immoral about profit maximisation I might add. I certainly want to maximise my profits when I make an investment too!).

So the odds of a capital raise happening this year has just gone up in my mind. I better keep some powder dry as Blackcap has suggested!

I don't think much will happen in the short term. They will keep shaking the tree by churning the stock. I suspect it will trade sub 30 for some time.

They know "Accident Compensation Corporation" need to offload their holdings as they're not allowed to hold companies like this. So they'll wait for them to dump again so they can pick up the rest of their 26m.

Also, more retail holders will continue to sell as they look for cash during the downturn.

The plan would be to find a buyer by years end who has the liquidity to buy both the company and clear the bonds. I would say a rights issue is now less likely and a hostile take over more likely.

I am going to buy more but only if it stays at this level or lower. I won't be averaging up if it does start to rise.

[mistaTea]

I don't think much will happen in the short term. They will keep shaking the tree by churning the stock. I suspect it will trade sub 30 for some time.

They know "Accident Compensation Corporation" need to offload their holdings as they're not allowed to hold companies like this. So they'll wait for them to dump again so they can pick up the rest of their 26m.

Also, more retail holders will continue to sell as they look for cash during the downturn.

The plan would be to find a buyer by years end who has the liquidity to buy both the company and clear the bonds. I would say a rights issue is now less likely and a hostile take over more likely.

I am going to buy more but only if it stays at this level or lower. I won't be averaging up if it does start to rise.

That is a very interesting insight, and also very plausible.

Thanks for the thoughtful posts mate - it is going to be fascinating to see what happens over the next few months that’s for sure!

[blackcap]

They know "Accident Compensation Corporation" need to offload their holdings as they're not allowed to hold companies like this. So they'll wait for them to dump again so they can pick up the rest of their 26m.

.

Why are ACC not allowed to hold SKT? Just curious but I do not see SKT as a sin stock or a fossil fuel stock.

[Ogg]

Why are ACC not allowed to hold SKT? Just curious but I do not see SKT as a sin stock or a fossil fuel stock.

Cause it doesn't fit their investment strategy. Which is, to my understanding, to invest in stable companies that provide regular income for them to pay for injuries.

https://www.acc.co.nz/about-us/our-investments/

We favour long-term investments that can deliver relatively certain income streams over long periods of time. These investments match our long-term cash flow requirements, and also help offset the risk of declines in interest rates.

They'll be dumping more soon. I'll have my pan ready.

[blackcap]

Cause it doesn't fit their investment strategy. Which is, to my understanding, to invest in stable companies that provide regular income for them to pay for injuries.

https://www.acc.co.nz/about-us/our-investments/

We favour long-term investments that can deliver relatively certain income streams over long periods of time. These investments match our long-term cash flow requirements, and also help offset the risk of declines in interest rates.

They'll be dumping more soon. I'll have my pan ready.

Not so sure I agree with you on that one. ACC pretty much has holdings in every NZ company (the larger ones). I do know that the govt has legislated that they are not allowed in fossil fuel companies ie NZO and have to exit them. But I think they are ok to invest in SKT. They may have been selling some recently but I do not think it is because of the mandate. Probably more because they though the prospects were looking bleak.

[Ogg]

Not so sure I agree with you on that one. ACC pretty much has holdings in every NZ company (the larger ones). I do know that the govt has legislated that they are not allowed in fossil fuel companies ie NZO and have to exit them. But I think they are ok to invest in SKT. They may have been selling some recently but I do not think it is because of the mandate. Probably more because they though the prospects were looking bleak.

Perhaps. The point is that it's a defensive fund with an appetite for low risk.

They'll selling so they can reallocate the cash and rebalance the funds exposure to risk.

It's like a passive fund. I don't think an analyst sat down and looked into Sky's future and thought it was bleak.

They just take the loss and move on.

[mistaTea]

I think the biggest learning I have taken from investing in Sky over the last couple of years is to pay much more focus to debt.

Obviously debt is something on my checklist that I look at for all potential investments.

However, I think if I viewed Sky more through an EV lens earlier in the piece I probably wouldn’t have bought in so early. I think the first shares I purchased was a parcel of about 5000 shares for around $2.

I believe this might end up being a case where my general understanding of the business and most-likely future prospects are correct (or close enough anyway) but I got my timing wrong with the initial shares I purchased. I paid too much initially given the challenges the business was clearly going to need to face.

I probably would have only started paying sub $1 if I did that - and my average price would now probably be around 40- 50c per share by now.

Whereas right now I am on the table for $1.06 overall. And $1.06 fees like a hell of a long way from $0.27!!

[Grimy]

Whereas right now I am on the table for $1.06 overall. And $1.06 fees like a hell of a long way from $0.27!!

Most of us have been there at least once with a less than great share, or timing...…..

[Ogg]

I think the biggest learning I have taken from investing in Sky over the last couple of years is to pay much more focus to debt.

Obviously debt is something on my checklist that I look at for all potential investments.

However, I think if I viewed Sky more through an EV lens earlier in the piece I probably wouldn’t have bought in so early. I think the first shares I purchased was a parcel of about 5000 shares for around $2.

I believe this might end up being a case where my general understanding of the business and most-likely future prospects are correct (or close enough anyway) but I got my timing wrong with the initial shares I purchased. I paid too much initially given the challenges the business was clearly going to need to face.

I probably would have only started paying sub $1 if I did that - and my average price would now probably be around 40- 50c per share by now.

Whereas right now I am on the table for $1.06 overall. And $1.06 fees like a hell of a long way from $0.27!!

I wouldn't beat yourself up because of this. I first looked at this stock when it was at 90c. It looked good back then but I had other things on my horizon so I didn't buy.

From a value prospectus, $1.06 is a good buy. The problem is that the market over the last few years (2015-2019) has been over enthused with growth stocks. We're now seeing a huge shift globally from over priced growth stocks back to value companies with actual good earnings and balance sheets.

Sky has suffered more because the market has wrongly assumed that streaming (Netflix phenomenon) would grow and capture the entire TV market. The truth is that traditional satellite TV still has a future and will never disappear.

One thing I don't like about Sky's new CEO Martin Stewart, is that he's been overly aggressive in thinking that streaming and sport are the only future for Sky. These are important but the focus should be on going back to basics and providing more traditional entertainment in Sky's line up. Over paying for sporting rights or buying dud streaming platforms like Lightbox are mistakes. The focus should be on doing what Sky does best, providing a wide variety of diverse content for all demographics at a reasonable price. The key has always been to "bundle" channels and give the consumer a huge amount of content. This is what keeps them happy and subscribes for life. The sooner they get back to basics, the sooner the dividends will return and then the capital value will reflect that. When the dividends return, so will good quality hedge funds like ACC come back, and low quality vulture funds like "Black Crap" will be gone.

[Ogg]

Just calculated Black Crane's position.

22,356,578 shares for a total consideration of $7,845,246.

Average price of 35c per share.

So they're sitting on a $1,808,969 paper loss as of today's closing price.

Ouch!

Their average was 61c just 3 weeks ago, so they've been averaging down hard.

Will they keep averaging down?

[Stranger_Danger]

Just calculated Black Crane's position.

22,356,578 shares for a total consideration of $7,845,246.

Average price of 35c per share.

So they're sitting on a $1,808,969 paper loss as of today's closing price.

Ouch!

Their average was 61c just 3 weeks ago, so they've been averaging down hard.

Will they keep averaging down?

Black Crane are not idiots, nor are they passive investors. I haven't checked, but it wouldn't surprise me if they have an interest in the bonds. They'll be looking to get actively involved in a debt restructuring, the current price of their 22mil ordinary shares will be of minor interest to them.

[Ogg]

Black Crane are not idiots, nor are they passive investors. I haven't checked, but it wouldn't surprise me if they have an interest in the bonds. They'll be looking to get actively involved in a debt restructuring, the current price of their 22mil ordinary shares will be of minor interest to them.

Why is everyone going on about the debt? Interest rates are zero worldwide. Debt is cheaper now than it has been ever before. Companies are even getting free loans.

Sky isn't a zero revenue oil company or a retail company in full lock down with no revenue. Sky is making money and can service it's debt fine.

I checked, Black Crane don't have an interest in the bonds. Even if they did have an interest, what kind of debt restructure could possibly happen? You can buy the company for almost the same value of the bonds now. So why buy bonds when you can get equity now?

Let's just say the bonds are due next month. As an essential service, the government would likely bail Sky out with a free $100m loan anyway.

You need to think of the debt as a positive, not a negative. Yes, there's a risk of default, but if Sky can come out of this by restructuring the debt on favorable terms, then it leverages the long term value going forward. As it stands now the market cap is ridiculously low, as it's been leveraged by the debt. The stock will bounce hard once this is sorted, hence why Black Crane are buying equity now.

[Snoopy]

Why is everyone going on about the debt? Interest rates are zero worldwide. Debt is cheaper now than it has been ever before. Companies are even getting free loans.

Sky isn't a zero revenue oil company or a retail company in full lock down with no revenue. Sky is making money and can service it's debt fine.


Sky is getting positive cashflow because they have paid for their broadcast rights 'up front' and they are currently collecting revenue from their customers in anticipation of what they thought they had signed up to. But whether Sky are 'making money' (i.e. profit) is another question.



Let's just say the bonds are due next month. As an essential service, the government would likely bail Sky out with a free $100m loan anyway.


I guess we have moved on from the basic food clothing and shelter paradigm which were the traditional measures of 'essential'. But you might consider that long form journalism is an essential service. And with they closing down of Bauer in NZ, and the death of North and South , Metro and The Listener, the government didn't seem too concerned that critical long form journalism is now wiped out in NZ. Sky is in no way essential. There are other providers out there that supply movie and cultural content. Spark can do sport in the future.



You need to think of the debt as a positive, not a negative. Yes, there's a risk of default, but if Sky can come out of this by restructuring the debt on favorable terms, .....


Debt as a "positive"??? I think you still have to be able to service your debt and even with a zero interest rate, that means an ability to pay your capital back. If you aren't making a profit, then you don't have that.

SNOOPY

[blackcap]

No way the government bail out SKY with a loan as being an essential service. Totally not now that we have Free to air TV anyway and there are so many other streaming possibilities.

Debt is still the huge problem for companies even in these times of zero interest. If you cannot pay back your debt when it is due... you are at the mercy of the creditor who can do anything you like with you.

SKY needs to make sure that they have the $100m when it falls due. Otherwise they are toast. Well not SKY per-se, but current equity holders will be.

[mistaTea]

I think everyone here is making some really solid points.

My reference earlier to debt (as part of an EV view...) is more to acknowledge that I needed to demand a much bigger margin of safety when I started to buy in. My hurdle rate for % return of Owner Earnings/EV should have been higher for a company like Sky. Lesson learned.

Though I am not sure I would necessarily view the current debt levels as a "positive" - and I wouldn't put too much hope in government assistance...

I think Ogg does make a fair point about debt being so cheap these days, and refinancing being a real possibility. Sky have been servicing $100M with a 6% coupon for 4 years no worries. They could get better terms with the banks I think.

My wife works at one of the big 4 banks and new lending has pretty well dried up. Not only that, but many homes and businesses are going on repayment holidays at the moment. Sure, interest still accrues...but their cashflows are going to be shot for the next 6 months or so.

In that light, it is entirely possible that a syndicate of banks could be more open now to helping Sky out with its current finance structure.

Or they may go ahead with a capital raise. But as I have said before, I would want that to be an absolute last resort with the SP being in the toilet. Especially if there are viable and relatively cheap lending facilities available to Sky now.

[macduffy]

In that light, it is entirely possible that a syndicate of banks could be more open now to helping Sky out with its current finance structure.

Perhaps, but banks don't just lend because they have the funds. Propositions need to stack up, to show that they have the ability to service the debt, however low the interest rate may be - and I would think that Sky would be considered to be higher risk and would need to pay a relatively high rate. Then there is the thorny question of ability to repay the loan. Would Sky stack up?

[winner69]

Fron F19 Annual Report SKT Free Cash Flow (operating less capex less investment) has total $737m over the last 5 years

Where has all that free cash gone ....seeing many are calling their demise in near future

[mistaTea]

Perhaps, but banks don't just lend because they have the funds. Propositions need to stack up, to show that they have the ability to service the debt, however low the interest rate may be - and I would think that Sky would be considered to be higher risk and would need to pay a relatively high rate. Then there is the thorny question of ability to repay the loan. Would Sky stack up?

Of course the banks need to be confident they will get their money back - that goes without saying. I am just suggesting that the banks may be prepared to take another look at Sky now (where before when everything else was booming Sky may have been a flat 'no').

We will never know because we aren't in the discussions that Blair Woodbury and co will be having with the various parties. We don't know what the banks are thinking now, and there may also be Sky developments that aid or detract from the Business Case for lending.

Some contributors have taken the position that there is no chance of refinancing and capital raise is their only viable option. It may well be that a capital raise I required in the next few months, but I don't believe that is a certainty. And refinancing could still be an option.

[mistaTea]

Fron F19 Annual Report SKT Free Cash Flow (operating less capex less investment) has total $737m over the last 5 years

Where has all that free cash gone ....seeing many are calling their demise in near future

Most of that would have been paid out as dividends to shareholders.

[mistaTea]

IOver paying for sporting rights or buying dud streaming platforms like Lightbox are mistakes. .

Agree they need to be careful not to overpay for Sporting rights...though that is easier said than done. Clearly they have to retain certain 'key sports' if they want to retain their branding as the Home of Sport. And with competition in the market now with Spark Sport (and soon DAZN) the price they need to pay to retain will go up.

I disagree with the notion that buying Lightbox was a mistake.

Lightbox is popular, most people I have spoken to who have used it have had positive things to say. As a platform it is far better than NEON.
They also have some decent content on there.

Buying Lightbox and merging it with NEON should work out well for Sky I believe. It will give them a beefed up SVOD service which should be more attractive to consumers. Plus a wholesale agreement with Spark which gives them hundreds of thousands of potential customers.

I just hope the 'new' platform they release is significantly better than NEON from a usability perspective. The new service needs to be slick...if it has any of the issues that plague NEON right now it would not be well received by the market.

NETFLIX has not only set the bar in this area...NETFLIX are the bar. So Sky will need to pull their socks up in a big way if they want the new service to be popular. Sky have the best content...they are just let down by the platform.

[winner69]

Most of that would have been paid out as dividends to shareholders.

So shareholders have bled the company dry with little left for a rainy day

[mistaTea]

So shareholders have bled the company dry with little left for a rainy day

It’s a legitimate criticism that Martin Stewart has made. He is now trying to make up for years of underinvestment.

Previous management kept paying huge dividends each year ($100M+) even after Netflix became a phenomenon back in 2014.

Sure would have been nice if management didn’t give almost all FCF as dividends and made some key investments earlier.

But I think they were afraid to go into streaming too quick a sit would cannibalise their satellite base. In the meantime they took a few more big paydays.

That turned out to be stupid imo. They refused to cannabilise themselves so others came in and started to eat them anyway.

Anyway, that’s all history now. This is why Martin has such a big task ahead of him. I am broadly supportive of the moves he has been making. He won’t get everything right, but I think his aim to transition to streaming is right.

Sky still need to keep to their core competency of being an excellent content aggregator. However they need to be able to offer cheaper and more convenient packages. And that requires streaming.

Even if you want a traditional Sky package - nobody wants to have to wait for a technician to come and do an install. Not when you can sign up to NETFLIX and start watching in 2 mins.

I wonder if COVID will cause much of a delay in terms of the new streaming services sky are going to release? I think in their last announcement they indicated they would release in April? At least the merger Lightbox-NEON service?

[Ogg]

SKT Free Cash Flow (operating less capex less investment) has total $737m over the last 5 years



This is all investors need to know. Over the past 5 years Sky has made loads of cash. The question is, what will happen in the next 5 years.

The market is pricing the stock as if it is the next "BlockBuster Video" that will collapse. If that was the case, why hasn't it happened already? BlockBuster filed for bankruptcy in 2010.

The reason Sky is still around and always will be is because Satellite Television has good latency, reliability and high bandwidth (when transferring one way data to large audiences). Different technology has different benefits and draw backs. There's no perfect system. Streaming has downsides too.

There's also a certain social aspect of watching direct TV as opposed to streaming content on demand. People like to watch what other people are watching at the same time. People also like it when someone else (like SKY) decided what to show and what not to show. People like to switch on the TV and not have to think - especially older audiences.

Furthermore, broadband speeds aren't getting any faster in New Zealand, and we're already at unlimited data plans. We've reached the peak in terms of penetration of streaming. The numbers are showing that satellite subscription cancellations are slowing, and will likely in my opinion, reverse and start to grow again.

Here's a good example. My sister got Disney+ a few months ago. She said it's great, but sometimes their modem plays up and it disconnects. She also had to buy a new TV because of the App. It does work on the kids tablets but sometimes that can be difficult for them to navigate on the computer. Sometimes it logs out etc or the wifi drops out. Where as with Sky you just flick on Cartoon Network and it goes. The point is, she has both Disney+ and Sky because they're both good value.