SKT Sky Network Television Limited.

[mistaTea]

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.

Mate I think we are Soul Mates.

Where have you been over the last 2 years while I have been getting hammered by most ST contributors?!

😂

[mistaTea]

It’s also damn convenient to have the Freeview channels on the same platform as the premium content.

So you have one place to build up your watch list of the cool BBC shows on TVNZ (for example) as well as premium content like HBO, Sport etc.

Satellite has many many advantages over streaming but right now their packages feel very expensive compared to OTT providers.

$40 a month from the get to to get starter + my Sky - before you have even added the packages you want.

So streaming will be a cheaper way for sky to broadcast (and therefore offer more competitive packages), but I agree that satellite ain’t going anywhere anytime soon.

[huxley]

Hmmm. Will 5g disrupt satellite TV?

[mistaTea]

Hmmm. Will 5g disrupt satellite TV?

No more than fibre broadband has?

5G would be more of a threat to Chorus?

[Ogg]

Mate I think we are Soul Mates.

Where have you been over the last 2 years while I have been getting hammered by most ST contributors?!



I used to be super bearish on Sky.

I knew when Rupert Murdoch sold his holdings back in 2013 that it was a good move. So many stupid retail investors bought into that placement and now they've lost almost everything.

I tried to get my Dad to quit Sky so I bought him an Android TV box. He used it for a bit but somehow that ended up collecting dust and he still has Sky. Most of my extended family and a lot of my friends still have Sky. Some have canceled but surprisingly not that many have cancelled.

It's amazing how the public hate this company so much but yet it still has a massive amount of paying customers and a monopoly.

What's more, is that the entire country is in lock down and almost all businesses have closed and have no revenue. Yet, people are still happily paying for Sky. It's like toilet paper! You just can't live without it. They know if they stop paying the Sky bill it will turn off. Then what will they do?

Seriously, people love to watch crap on TV, over and over again and pay for it. It's a great business. It's just comes down to price. I wouldn't pay $2 per share for Sky, but "Mr Market" is offering 27 cents for this company. Just lol, yes please I'll buy.

[huxley]

hmmm Linear TV may move into production rather than distribution, networks doing TV will probably be more producers of content and change to use Netflix as a distribution hub as long as it's exclusive. We're probably five years away from something like that.

[macduffy]

I knew when Rupert Murdoch sold his holdings back in 2013 that it was a good move. So many stupid retail investors bought into that placement and now they've lost almost everything.

Here's one "stupid investor" who received his SKY shares in exchange for shares in INL - Independent Newspapers Ltd., publishers of the Dominion and the Evening Post. Only held them for a few years and sold at a handsome profit! Never did understand the technological issues sufficiently.

:cool:

[winner69]

Maybe its the declining cash flows that have punters worried

Last year or so under investment and declining dividends has help boost FCF … maybe the $90m and $55m forecasts aren't sustainable?

[winner69]

Hmmm. Will 5g disrupt satellite TV?

Isn’t 5G going to kill us all if the virus don’t get us first

[Ogg]

Maybe its the declinngcash flows that have punters worried

Last year or so under investment and declining dividends has help FCF … maybe the $90m and $55m forecasts aren't sustainable?

That's just one metric used to value the company. Free cash flow can be effected by all sorts of different things.

The main metric is subscriber/customer count.

As per recent half year results, they're on track for one million customers by 2021.

[winner69]

That's just one metric used to value the company. Free cash flow can be effected by all sorts of different things.

The main metric is subscriber/customer count.

As per recent half year results, they're on track for one million customers by 2021.

OGG me old mate ..you are correct ...but are you easily seduced by slick presentations with glossy slides

[Ogg]

OGG me old mate ..you are correct ...but are you easily seduced by slick presentations with glossy slides

The point isn't that they have 1m customers. It's that the narrative that their business is in decline is false. The doomsayers are wrong.

With BlockBuster Video it was obvious. You could clearly see a massive decline and exodus of foot traffic in their stores.

With Sky, what we saw is a small decline, then a flatting of the curve. The total customer numbers are still hovering at around the all time high level.

However, the stock price has gone from $6 to 19 cents. Why?

[steveb]

Customers are no longer prepared to pay the $90+ for a sports package,so that price has been reduced,maybe they have the same number of subscribers.but they are paying less.Also with increased competition they were forced to pay more for their product,so yes they are being squeezed both ends.

Also the debt has to be serviced, their deal with Optus runs out next year,how is the $200m deal to renew going to work?

Perhaps Sky should be looking to merge with TV3 and NZME they are both struggling,but together the cost savings and improved content could be a winner all round.TV3 are providing Sky with their news coverage which is a huge cost to try and provide a quality news production from around the world.

Don,t forget their outside broadcast is one of the best in the world.

[mistaTea]

Customers are no longer prepared to pay the $90+ for a sports package,so that price has been reduced,maybe they have the same number of subscribers.but they are paying less.Also with increased competition they were forced to pay more for their product,so yes they are being squeezed both ends.

Also the debt has to be serviced, their deal with Optus runs out next year,how is the $200m deal to renew going to work?

Perhaps Sky should be looking to merge with TV3 and NZME they are both struggling,but together the cost savings and improved content could be a winner all round.TV3 are providing Sky with their news coverage which is a huge cost to try and provide a quality news production from around the world.

Don,t forget their outside broadcast is one of the best in the world.

They have already renewed their deal with Optus.

They have satellite coverage secured until 2031 I believe.

[steveb]

They have already renewed their deal with Optus.

They have satellite coverage secured until 2031 I believe.
Yes indeed that's why I was asking if anyone knows how the $200m deal is to be paid.

[winner69]

The point isn't that they have 1m customers. It's that the narrative that their business is in decline is false. The doomsayers are wrong.

With BlockBuster Video it was obvious. You could clearly see a massive decline and exodus of foot traffic in their stores.

With Sky, what we saw is a small decline, then a flatting of the curve. The total customer numbers are still hovering at around the all time high level.

However, the stock price has gone from $6 to 19 cents. Why?

I don’t speak Skylingo so don’t know about customers but they use a thing called subscribers

When the share price was $6 in 2015 they had 851k subscribers and that subscriber base generated $283m operating cash flow,

Since then they have invested $341m (investing for growth seems a term they use often)

After that investment subscriber base was 779k (june19) and operating cash flow was only $178m

Subscriber numbers increasing over 2020 but operating cash likely to be significantly(?) less than 2019

I’m trying hard to fall in love with Sky but the trend in subscribers and cash still not looking good ...esp in light of the significant ongoing capex and investment

[Ogg]

Customers are no longer prepared to pay the $90+ for a sports package,so that price has been reduced,maybe they have the same number of subscribers.but they are paying less.

The average revenue per user has dropped, but only slightly.

How does this justify a 96% loss in the capital of the stock over the last few years?

Also, there's almost 40,000 new dwellings consented each year. So over the next 10 years there could be another 400,000 potential Sky customers.

Even if customer numbers stayed the same, over the long term you would be getting 25% dividends at these prices.

[mistaTea]

Yes indeed that's why I was asking if anyone knows how the $200m deal is to be paid.

Well the accounting of it is dealt with differently under IFRS16...

But ultimately it will be paid the same way it has always been paid for? From operating earnings?

Like...you realise they don’t have to pay the full amount upfront right? In a little confused by your question.

[Ogg]

I don’t speak Skylingo so don’t know about customers but they use a thing called subscribers

When the share price was $6 in 2015 they had 851k subscribers and that subscriber base generated $283m operating cash flow,

Since then they have invested $341m (investing for growth seems a term they use often)

After that investment subscriber base was 779k (june19) and operating cash flow was only $178m

Subscriber numbers increasing over 2020 but operating cash likely to be significantly(?) less than 2019

I’m trying hard to fall in love with Sky but the trend in subscribers and cash still not looking good ...esp in light of the significant ongoing capex and investment

I wouldn't worry to much about the cash flow. What matters is these numbers:

851k: 2015
779k: 2019

A small 8.5% decline. The share price therefore should be $5.65 given these numbers.

I think this is why Black Crane have such a strong interest in this stock. The fundamentals are there (subscriber numbers) but the cash flow has decline, likely because of miss-management or other external factors over the last few years.

If Black Crane can scoop up the rest of the shares and then transform the company, they might be able to turn the "cash flow tap" back on to what it was before the decline.

[macduffy]

If Black Crane can scoop up the rest of the shares and then transform the company, they might be able to turn the "cash flow tap" back on to what it was before the decline.

From reading their website Black Crane are investors, not company managers. More likely to look for a buyer once/if they take control of SKY?

[Ogg]

From reading their website Black Crane are investors, not company managers. More likely to look for a buyer once/if they take control of SKY?

I did some more research on them.

It looks like they have a new website that is in test mode but you can still view it, just lol. Just type in the IP address instead of the domain name.

http://142.93.43.240/

Here is their fund fact sheet:

http://142.93.43.240/uploads/2020/02/Black-Crane-Capital-Fund-Factsheet-v3.pdf

Also found an unlisted youtube video of him from 2017.


https://www.youtube.com/watch?v=u26nP7JUpDI

I dunno what he's up to but from what I've read he's basically an event driven investor.

https://en.wikipedia.org/wiki/Event-driven_investing

...a hedge fund investment strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as an earnings call, bankruptcy, merger, acquisition, or spinoff...

Their average fund size investment is $10m-$50m. So I assume he's still got some ammunition left and will continue buying Sky shares, especially considering their average is 35c and the stock is trading at 27c. He'll probably keep buying and then hope an "event" happens in the short term.

So in other words, he's just a punter like me but with deeper pockets :eek2:

[mistaTea]

...a hedge fund investment strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as an earnings call, bankruptcy, merger, acquisition, or spinoff...

Their average fund size investment is $10m-$50m. So I assume he's still got some ammunition left and will continue buying Sky shares, especially considering their average is 35c and the stock is trading at 27c. He'll probably keep buying and then hope an "event" happens in the short term.


He could buy up to 19.99% of the company if he wanted to for about $26M total spend at current prices.

One can only speculate on how big a stake he will purchase and what he is going to do... but he may use his experience and connections to help Sky refinance their debt facilities on more favourable terms as a first step.
Ultimately he will want to find a buyer for the company by the looks of things.

I like his consolidated portfolio approach...very Charlie Munger. Go in big for a small set of high conviction stocks that you really understand.

Let's see if Black Crane's interest in the company triggers interest from any of the other Big Boys.

[winner69]

So in other words, he's just a punter like me but with deeper pockets :eek2:

Agree with you there Ogg ...Black Crane just taking a punt and not the white knight riding into town to save Sky

Apparently plenty of black cranes around ...not like black swans ;)

[winner69]

I see that that Black Crane guy used to be with UBS ...must have had a chat with his old mates as they buying as well.

[mistaTea]

Agree with you there Ogg ...Black Crane just taking a punt and not the white knight riding into town to save Sky

Apparently plenty of black cranes around ...not like black swans ;)

I think it is more than a ‘punt’ actually.

His investment style is to consolidate on high conviction stocks. So he researched the sh1t out of them before he starts buying in.

He also takes an active investment style - i.e once he takes control of a large block of shares he rolls his sleeves up and works with the board to make the changes he feels are needed.

We can’t know what his end game is here - but I don’t get the feeling that he has bought Sky as a ‘punt’ just because it is statistically cheap.

[mistaTea]

I see that that Black Crane guy used to be with UBS ...must have had a chat with his old mates as they buying as well.
They were the same trades.

I think black crane facilitated the share purchase via a brokerage account he must hold with his old buddies at UBS.

I posted about this previously - you can see both UBS and black crane announcements shows a share purchase or 3.3M and 7M on the same day...

[winner69]

They were the same trades.

I think black crane facilitated the share purchase via a brokerage account he must hold with his old buddies at UBS.

I posted about this previously - you can see both UBS and black crane announcements shows a share purchase or 3.3M and 7M on the same day...

Not thinking too well on a sunny Sunday but why do they both say becoming Substantial shareholder if they are they are the same trades.

UBS list of transactions interesting ..bit of shorting going on?

[Ogg]

Agree with you there Ogg ...Black Crane just taking a punt and not the white knight riding into town to save Sky

Apparently plenty of black cranes around ...not like black swans ;)

He did work for 10 years in UBS's mergers and acquisitions division, specialising in telecommunication companies.

Their fund has also been long on Chorus since 2014.

I doubt he's put in millions of dollars in Sky without picking up the phone and making some calls to some of his contacts. He's probably actively working on an arrangement now.

Their fund has also been hot on convertible notes. Did a deal with Wellard ASX:WLD.

My guess is that he will keep buying at these levels and work his way up to 10% holdings to block any other take over attempt. Then he will try and find a buyer from Asia (where all his UBS contacts are from). If that all fails he'll likely refinance that $100m bonds into $100m convertible notes.

He'll be looking to screw over retail holders for sure. I'm just lucky my average is a lot lower than his :D

[Ogg]

Not thinking too well on a sunny Sunday but why do they both say becoming Substantial shareholder if they are they are the same trades.

UBS list of transactions interesting ..bit of shorting going on?

UBS is Black Crane's broker.

There trading desk must have gotten wind of it and tried to make some money off the volatile liquidity.

[mistaTea]

He'll be looking to screw over retail holders for sure.

I doubt very much he has bought into Sky to "screw over" retail holders. That may well be the end result, depending on what happens from here...but he will have found an opportunity here and will try to extract as much value as possible for his fund, that's all. Nothing sinister, I doubt.


My guess is that he will keep buying at these levels and work his way up to 10% holdings to block any other take over attempt. Then he will try and find a buyer from Asia (where all his UBS contacts are from). If that all fails he'll likely refinance that $100m bonds into $100m convertible notes.

Anything possible I suppose - but we do need to be careful at this point not to get too carried away with the speculation and second-guessing. It is probably enough at this stage just to recognise that Black Crane have viewed Sky as significantly discounted to intrinsic value from 70c per share. When the price crashed it just became an event that enabled BC to buy even more shares for way cheaper.

Issuing $100M convertible notes would need to get other shareholders on board - like NZ Rugby and RugbyPass. The quoted value of their significant holdings have dived - and I doubt they would be giving Black Crane a sweet convertible note deal, which could ultimately significantly dilute their already-undervalued stock, unless it was an absolute last resort.

Many, many things could happen from here.

If we are to play the guessing game, I speculate a more likely outcome is that he helps get Sky more attractive financing terms (possibly from overseas banks) and then, once that is sorted and the notion that Sky can't pay it's debt and is going to go bust is gone, lock in a buyer.
5 Bagger minimum for him in a year or so. That would be an incredible outcome.

But then again, I am just some guy who doesn't know jack.

[Ogg]

You might be right mistaTea

Found another video of him:

https://finance.yahoo.com/video/elders-favored-short-li-fung-021354483.html

He is almost exclusively long only.

He's focused on "corporate finance renovation turn around stories on the long side."

Seems like he might be in Sky for the long term and is looking to turn it around with some kind of finance arrangement.

[k14]

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.
I totally agree on that point. After being a satellite customer for upwards of 15 years, I got it disconnected in September last year. I subscribed to Sky Sport Now (as sport is all I watched on Sky) in November. It worked ok, but 1 time out of 20 it would take 5-10 mins to get it going with something going wrong with chromecast. I was intending to get satellite hooked back up this month (that obviously is on hold now). Yes the sky box is clunky and the UI is dated but it just works. I am happy with that. Now that SkyGo can be "cast" and it has some time shifting capability I think the best option is satellite sub without MySky.

[winner69]

Sky is one of those companies that would have been heaps more successful in private ownership away from the scrutiny of institutional and investment fund managers who only see SKT as a ticker code and are generally only worried about a squiggly line on a chart .....and not about the long term sustainability of the business.

[blackcap]

. Yes the sky box is clunky and the UI is dated but it just works. I am happy with that. Now that SkyGo can be "cast" and it has some time shifting capability I think the best option is satellite sub without MySky.

That's the bit that I like about it.... it works. And the fact you do not need internet to get the thing going.

[mistaTea]

Sky is one of those companies that would have been heaps more successful in private ownership away from the scrutiny of institutional and investment fund managers who only see SKT as a ticker code and are generally only worried about a squiggly line on a chart .....and not about the long term sustainability of the business.

Agreed 100%. Sky would absolutely do better if they were not a lsited company as they could just get on with aking the changes required to transition the business without the intense scrutiny which is largely unhelpful to management right now.

Regardless of what they seem to do, they get slaughtered for it.

For example, they won the rugby after pretty well everyone said they needed to keep Rugby to have a chance of survival. Immediately there was unfounded speculation that they agreed to pay half a billion dollars over 5 years to hold on to the rights...they Sky had to pay way over the odds and would have no hope of making any money from it etc etc.

However, I know damn well that if Sky had of walked away from rugby sighting the asking price was way more than the value of the content etc etc...they would have been asolutely crucified for that to.

It's riduculous.

[mistaTea]

Sky is one of those companies that would have been heaps more successful in private ownership away from the scrutiny of institutional and investment fund managers who only see SKT as a ticker code and are generally only worried about a squiggly line on a chart .....and not about the long term sustainability of the business.

Yeah its a fair point. If you forgo MySky (a real possibility now that SkyGo can be cast) you could have a comprehensive entertainment package from Sky including Sport for about $76/month now.

That equates to about $2.50 a day...less than a cup of coffee and a huge amount of entertainment.

I am happy with my current Sky Sport NOW/NEON subs... for now...I pay about $54/month ($1.76 per day). However Sky Sport NOW is not as 'live' as satellite... and NEON doesn't give me all of their entertainment content.
So there are pros and cons.


I live in a new sub division that only has fibre. I don't want to instal a satellite dish on my house, and streaming is the way most entertainment is consumed now.

I am just waiting for Sky to release their new digital offerings. I would be very keen to cancel my NEON and Sky Sport NOW subs in favour of a more comprehensive streaming bundle. If they can give me 'everything' for $70-$80/month I would be keen.

[Sideshow Bob]

Agreed 100%. Sky would absolutely do better if they were not a lsited company as they could just get on with aking the changes required to transition the business without the intense scrutiny which is largely unhelpful to management right now.

Regardless of what they seem to do, they get slaughtered for it.

For example, they won the rugby after pretty well everyone said they needed to keep Rugby to have a chance of survival. Immediately there was unfounded speculation that they agreed to pay half a billion dollars over 5 years to hold on to the rights...they Sky had to pay way over the odds and would have no hope of making any money from it etc etc.

However, I know damn well that if Sky had of walked away from rugby sighting the asking price was way more than the value of the content etc etc...they would have been asolutely crucified for that to.

It's riduculous.

Sky is a company everyone loves to hate.

[winner69]

It all started going downhill for Sky TV when Derek Handley somehow squirmed his way on to the Board.

[mistaTea]

Sky is a company everyone loves to hate.

Yeah, and previous management caused a lot of that sentiment because they were effectively a monopoly and certainly acted like one.

I think the new team are making progress repairing relationships with content partners AND customers. But they won't be able to fix the negative perception issues overnight.

For many years consumers felt they were getting ripped off with excessively expensive bundles but had no other choice if they wanted premium TV. Remember, in the bad old days... just to get hooked up with what I would consider 'the essentials' you had to purchase Sky Basic + My Sky + HD Ticket.

That was $49 + $15 or $20 (depending on hard drive size)+ $10 = $74 or $79 per month from the get go. Before you had even added Sport or any of the premium entertainent channels you actually wanted to watch!

It's no wonder they never penetrated the majority of households even back then. No skin off their nose at the time though because they were raking in huge profts and paying huge dividends. It all worked out well for years...until it didn't.

[Traderx]

Hi all, interested in your take on the balance sheet "strength" and the ability to repay the bonds due 31 March next year - $100m

There is essentially no cash on the balance sheet, appears that the use the bank facilities as a from of revolving credit. As at 31 Dec they appeared to have c. $84m of headroom in this facility (limit $200m, $114m of non bond borrowings). The facility reduces to $150m in July 2021 (i.e just after bond due). The whole facility expires in July 2022.

Cashflow appears positive, and may remain so over coming 1-3 months.

My questions

If sport gets cancelled long term will SKT receive any compensation for rights? What is the ability to pay from sports? Have they paid upfront or is there a run rate component?

What is scenario where SKT cant repay the bonds?

What is ability for SKT to screw bondolders in some way other than in a receivership or other process?

I'm consider buying bonds at current 60-70% yield for next 12 months

Interested in your thoughts?

[Ogg]

Hi all, interested in your take on the balance sheet "strength" and the ability to repay the bonds due 31 March next year - $100m

There is essentially no cash on the balance sheet, appears that the use the bank facilities as a from of revolving credit. As at 31 Dec they appeared to have c. $84m of headroom in this facility (limit $200m, $114m of non bond borrowings). The facility reduces to $150m in July 2021 (i.e just after bond due). The whole facility expires in July 2022.

Cashflow appears positive, and may remain so over coming 1-3 months.

My questions

If sport gets cancelled long term will SKT receive any compensation for rights? What is the ability to pay from sports? Have they paid upfront or is there a run rate component?

What is scenario where SKT cant repay the bonds?

What is ability for SKT to screw bondolders in some way other than in a receivership or other process?

I'm consider buying bonds at current 60-70% yield for next 12 months

Interested in your thoughts?

-I'm not too sure about the sports situation. I assume it's the sporting clubs that are taking the hit as they are the ones that have taken pay cuts and have asked the government for bail outs. I doubt Sky would pay them upfront or would pay them money if no game happens. Interesting situation though. It depends how long it goes on for. 12 weeks isn't a long time considering the rights are for 5 years or so. At the moment, most sports fans aren't grumpy, but as more time goes on they will loose patience. Once the country drops back down to level 3, I would think some games could happen again with no crowds. Or games could be moved to areas of the country with less covid cases etc.

-The bond holders will get paid, just a matter by whom, either the existing shareholders or by a new owner.

-Bondholders can't get screwed over.

-60% yield looks tempting but I'm looking to make more than that with the equity.

[winner69]

Jeez these bonds now 80% (NZX)

$1 for $1.80 odds better than backing WINX.AU last year

[blackcap]

Jeez these bonds now 80% (NZX)

$1 for $1.80 odds better than backing WINX.AU last year

Come on winner, you know you want to have a go. 80% is looking pretty tempting.. Yeah that WINX was an amazing bet. As was the BCVA but that left a bit earlier.

In all seriousness, I would almost be tempted taking the bonds at 80% over the equity at 27 cents.

[winner69]

Traderx ....I’d get in quick if you want those bonds

I sense every man and his dog will want them and that 80% won’t last long.

[Arbroath]

Ogg

Be careful with statements like "Bondholders can't get screwed over" as they very definitely can. Why do you think they are trading at 55c in the $1.00
That price may or may not be too pessimistic but bondholders could definitely end up with either an outright loss or possibly effectively forced to take equity at maturity or risk Sky going under. Personally I'd rather own the bonds than the equity as it is higher up the foodchain but it is not immune from a haircut of some description.

[Traderx]

Ogg

Be careful with statements like "Bondholders can't get screwed over" as they very definitely can. Why do you think they are trading at 55c in the $1.00
That price may or may not be too pessimistic but bondholders could definitely end up with either an outright loss or possibly effectively forced to take equity at maturity or risk Sky going under. Personally I'd rather own the bonds than the equity as it is higher up the foodchain but it is not immune from a haircut of some description.

Hi there thanks for your comment. Interested in the mechanism that would have to occur for bondholders to be forced to take equity/haircut? Surely bondholders can take over the assets of the company (such as they are) to be paid in full?

Thanks

[Traderx]

Traderx ....I’d get in quick if you want those bonds

I sense every man and his dog will want them and that 80% won’t last long.

Haha still haven't pulled the trigger - there is a stand off at roughly 60 to 80% S/B!!

[Ogg]

Ogg

Be careful with statements like "Bondholders can't get screwed over" as they very definitely can. Why do you think they are trading at 55c in the $1.00
That price may or may not be too pessimistic but bondholders could definitely end up with either an outright loss or possibly effectively forced to take equity at maturity or risk Sky going under. Personally I'd rather own the bonds than the equity as it is higher up the foodchain but it is not immune from a haircut of some description.

Why would you buy the bonds. If the company fails the bonds fails. If the bonds fail the company fails.

If the stock doubles from here, it's still way below it's intrinsic value, not to mention the possibility of further upside on a take over deal.

Why risk putting your money in bonds which has the same risk as equity at the moment.

It's probably just nervous-nellie boomer retail holders selling the bonds now. Thinking that the world is ending. Those were the type of people who bought them in the first place. They're super defensive, penny counting investors.

The yield seemed to have spiked on the covid-19 situation, if it was related to the business, then we would have seen a gradual rise in the yield over the last year but that's not the case. It's just ballooned on low volume all of a sudden.

[airedale]

I just got a call from a Sky rep who offered me 6 months of movies for half price about $10.60 per month. I took the deal but cancelled my Rialto sub.

[mistaTea]

I just got a call from a Sky rep who offered me 6 months of movies for half price about $10.60 per month. I took the deal but cancelled my Rialto sub.

They have started adding some Rialto content to NEON. Nice addition of content imo.

[moimoi]

Banks are in front of the Bond Holders..

[winner69]

Converting those bonds into equity doesn’t seem to be an option.

[Traderx]

Banks are in front of the Bond Holders..

What makes you think that? Note 7 in most recent accounts says shared security

[moimoi]

What makes you think that? Note 7 in most recent accounts says shared security

Take a look @ page 22 of the SKY Network Television Limited Simplified Disclosure Prospectus 2014 under "Consequences of insolvency".

The Bonds are unsecured.

[blackcap]

Take a look @ page 22 of the SKY Network Television Limited Simplified Disclosure Prospectus 2014 under "Consequences of insolvency".

The Bonds are unsecured.

Agree with that. Also normally bonds would be better than equity by a long shot. You can still grab the "NTA" and sell it and get back your money. Problem with SKY is that they have no "NTA" to grab as a debt holder. So in that event there is less protection for bond holders. But it is also feasible that in the event of windup or receivership, bondholders end up with 50 cents in the $ or 80 cents in the $ whilst equity holders get zilch.

The receiver could just let existing subscriptions run their due course without any new investment and take the cashflows on offer as a worst case scenario? (with a skeleton staff to cover IT)

I should premise my post in saying that in no way do I think Sky will fall over is a given. Just offering up hypothetical's.

[mistaTea]

Another million or so shares traded today.

Gee, I wonder who might have bought the majority of those 😅

[Ogg]

https://www.stuff.co.nz/business/120848390/soaring-yield-on-sky-tv-bonds-a-sign-of-strange-times

[Ogg]

Price enquiry for the bond yields.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351392/320475.pdf (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351392/320475.pdf)

Must have been that stuff article yesterday.

[mistaTea]

Price enquiry for the bond yields.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351392/320475.pdf (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351392/320475.pdf)

Must have been that stuff article yesterday.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351392/320476.pdf

Well, Blair's response was short and sweet!

Nothing material to report to the market.

They do need to remember that the bond trading volumes are incredibly low. Not Sky's problem if a tiny fraction of current bondholders are willing to sell their bonds for pennies on the dollar.

[Balance]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/351392/320476.pdf

Well, Blair's response was short and sweet!

Nothing material to report to the market.

They do need to remember that the bond trading volumes are incredibly low. Not Sky's problem if a tiny fraction of current bondholders are willing to sell their bonds for pennies on the dollar.


Saw same thing happened with Skellerup* bonds all those years ago - yield went through the roof to over 75% and the eager beavers piled in, to find the bonds worthless when Skellerup went into receivership.

Old Skellerup under Murray Bolton, bright eyed bushy tail executive of BIL.

[mistaTea]

Saw same thing happened with Skellerup* bonds all those years ago - yield went through the roof to over 75% and the eager beavers piled in, to find the bonds worthless when Skellerup went into receivership.

Old Skellerup under Murray Bolton, bright eyed bushy tail executive of BIL.

Are you implying that the writing is on the wall for Sky, yet Blair is not disclosing important information to the market?

Having met the man on a number occasions, I would be truly shocked if that was the case.

[Ogg]

I bought more today.

There are over 6000 individual share holders in Sky.

A couple of week ago I owned nothing.

I'm now in the top 50.

Pray for me :ohmy:

[mistaTea]

I bought more today.

There are over 6000 individual share holders in Sky.

A couple of week ago I owned nothing.

I'm now in the top 50.

Pray for me :ohmy:

Welcome to the club!

[Ogg]

Welcome to the club!

lol.

I'm at 150k @ 23.6c average.

Still in the green but for how long?

[winner69]

lol.

I'm at 150k @ 23.6c average.

Still in the green but for how long?

Probably never be in the red from here.

Jeez top 50 shareholder - congratulations .... but that in itself says something about SKT

[Ogg]

Probably never be in the red from here.

Jeez top 50 shareholder - congratulations .... but that in itself says something about SKT

It tells you that the entire share registry is basically "mom and pa" retail holders who were living off the dividends for the last 20 years.

When the stock started to fall the institutional investors were smart enough not to buy in.

But at $100m market cap you would think it's at or close to bottom, at least Black Crane thinks so.

[mistaTea]

lol.

I'm at 150k @ 23.6c average.

Still in the green but for how long?

I hold about 350k.

Plan to add more very soon. Maybe take my holding to 400K.

[Ogg]

I hold about 350k.

Plan to add more very soon. Maybe take my holding to 400K.

Holy moly :eek2:

[moimoi]

It tells you that the entire share registry is basically "mom and pa" retail holders who were living off the dividends for the last 20 years.

When the stock started to fall the institutional investors were smart enough not to buy in.

But at $100m market cap you would think it's at or close to bottom, at least Black Crane thinks so.

According to the 2019AR.

67 holders held 90.32% of the company....

[Gerald]

I hold about 350k.

Plan to add more very soon. Maybe take my holding to 400K.


lol.

I'm at 150k @ 23.6c average.

Still in the green but for how long?

You brave boys :cool: (https://bebetterproject.files.wordpress.com/2016/04/bigstock-bigger-balls-1533170.jpg?w=584)

[mistaTea]

You brave boys :cool: (https://bebetterproject.files.wordpress.com/2016/04/bigstock-bigger-balls-1533170.jpg?w=584)

Woah! Woah! Woah!

Mate can I just clarify - I’m the one on the right with the larger testicles, correct?

Otherwise your post is just downright offensive!

[Snoopy]

lol.

I'm at 150k @ 23.6c average.

Still in the green but for how long?




I hold about 350k.

Plan to add more very soon. Maybe take my holding to 400K.


A word from some-one who lost big time on a 'sure thing'. You guys need to 'get out more' and look seriously at another investment opportunity with a different company. I am not saying quit your position with SKT. But the more money you put into SKT, the more convinced you seem to be that you are right. You may be right. But there are always factors out there that you cannot control and cannot reasonably estimate. Having an alternative investment prospect to look at in parallel to SKT will widen your investment horizon and may just save you big bucks. Stay in the SKT silo and your confirmation bias will increase.

From a fellow sharetrader who has been in a similar position (not with SKT), and doesn't want to see others fall into the same trap!

SNOOPY

[klid]

Yeah I think the odds are good on this one but it's still obviously extremely risky. I'd like to be calling the shots and would feel pretty confident if I were. But there's hope.

The merged Lightbox/Neon service will be a big driver I think so hopefully that gets done right and they survive.

[kiora]

A word from some-one who lost big time on a 'sure thing'. You guys need to 'get out more' and look seriously at another investment opportunity with a different company. I am not saying quit your position with SKT. But the more money you put into SKT, the more convinced you seem to be that you are right. You may be right. But there are always factors out there that you cannot control and cannot reasonably estimate. Having an alternative investment prospect to look at in parallel to SKT will widen your investment horizon and may just save you big bucks. Stay in the SKT silo and your confirmation bias will increase.

From a fellow sharetrader who has been in a similar position (not with SKT), and doesn't want to see others fall into the same trap!

SNOOPY

I second that Snoopy,been there,tried that. Didn't work
Important to limit to % of portfolio,higher risk,higher unrealized potential ,yeah no thanks,better slower & steadier
I always find better risk/reward is waiting around the corner if patient

[mistaTea]

A word from some-one who lost big time on a 'sure thing'. You guys need to 'get out more' and look seriously at another investment opportunity with a different company. I am not saying quit your position with SKT. But the more money you put into SKT, the more convinced you seem to be that you are right. You may be right. But there are always factors out there that you cannot control and cannot reasonably estimate. Having an alternative investment prospect to look at in parallel to SKT will widen your investment horizon and may just save you big bucks. Stay in the SKT silo and your confirmation bias will increase.

From a fellow sharetrader who has been in a similar position (not with SKT), and doesn't want to see others fall into the same trap!

SNOOPY

You are 100% correct that investors need to be careful not to fall into the confirmation bias trap. I think if you were to go back through many of my previous commentary I have pointed out both the issues/challenges as well as the positives for Sky TV. I definitely do not have 'rose tinted' glasses on for Sky, and am fully aware of the challenges faced by the company.

Sky TV is a company I am able to understand. My investing style is one of a consolidation approach. To me it makes no sense to diversify and put a bunch of money in my, say, 30th 'best idea' when I have an opportunity to acquire more of my 1st best idea at a large discount to intrinsic value. In that respect I am a worshiper of the Church of Munger, and Charlie is my Cult Leader.

It is also important to note that risk != volatility.
Risk = not knowing what you are doing. Time will either prove that I do know what I am doing when it comes to Sky, or that perhaps I didn't understand the business as well as I thought I did.

I continue to like the business, and the story has not changed at all from when I first invested in the company. If the story changes, naturally I will review my position. Until then, if Mr Market keeps offering equity in the company for what I believe are low prices relative to intrinsic value, I will keep buying more.

[Ogg]

Mr Market keeps offering equity in the company for what I believe are low prices relative to intrinsic value

This.

Even ASB securities agrees. They say it's intrinsic value is worth $1.

It's got that nice green bar around the buy button on the stock platform :D

[Stranger_Danger]

Sky TV is a company I am able to understand. My investing style is one of a consolidation approach. To me it makes no sense to diversify and put a bunch of money in my, say, 30th 'best idea' when I have an opportunity to acquire more of my 1st best idea at a large discount to intrinsic value. In that respect I am a worshiper of the Church of Munger, and Charlie is my Cult Leader.



With the greatest of respect, I'm not sure you understand Sky TV as well as you think you do. You may understand it as a company, a balance sheet, a management team, all of these things in and of themselves, but the key to how this investment is performing and will likely turn out is to understand Sky TV in relation to the world around it.

When I've raised piracy options, you typically respond to it as a moral issue. And as a moral issue, you win, piracy is stealing etc etc.

But, instead of seeing it as a moral issue, have you had a crack at exploring this alternative way to obtain content? Have you tried streaming, torrenting, installed Kodi or similar? Got hold of an Android phone, downloaded the apps that give you, for free, a vast ocean of on demand content at a price point Sky can never match - zero.

Have you taken the time to see how teenagers use a mobile phone? Watched how 5 year olds make their way around a tablet instinctively? Seen the confused look when a kid is visiting their grandma and 5 different people are watching this big box in a room, the timing of the content chosen by someone miles away they've never met, and their varied tastes meaning that 4 of them aren't watching what they want to watch?

If a man from mars came to Earth knowing nothing, and all he wanted was the widest range of content, available on the widest range of platforms, before even considering cost (once he considers cost, things get much worse for Sky obviously), do you honestly think, even with price not a consideration, the answer he'd land on is Sky TV?

Look, I see myself as a deep value investor. I've watched it all the way down. I've nearly bought the damn thing. By any fundamental valuation measure, it has looked cheap for a long time.

The answer isn't to look deeper at Sky TV. The answer is to look away, and look at the rest of the world, and how it has changed.

At best, you're in a business of collecting money from lazy, old people until they die. At best. Is that really the business you want to be in?

Go and talk to a hundred eighteen year olds going flatting. In my circle, back in the dark ages, there was a list of essentials - bed, stereo, couch, TV....Sky subscription.

Talk to the equivalent circle, a hundred eighteen year olds today. How many will sign up with Sky? My guess is zero.

[Ogg]

With the greatest of respect, I'm not sure you understand Sky TV as well as you think you do. You may understand it as a company, a balance sheet, a management team, all of these things in and of themselves, but the key to how this investment is performing and will likely turn out is to understand Sky TV in relation to the world around it.

When I've raised piracy options, you typically respond to it as a moral issue. And as a moral issue, you win, piracy is stealing etc etc.

But, instead of seeing it as a moral issue, have you had a crack at exploring this alternative way to obtain content? Have you tried streaming, torrenting, installed Kodi or similar? Got hold of an Android phone, downloaded the apps that give you, for free, a vast ocean of on demand content at a price point Sky can never match - zero.

Have you taken the time to see how teenagers use a mobile phone? Watched how 5 year olds make their way around a tablet instinctively? Seen the confused look when a kid is visiting their grandma and 5 different people are watching this big box in a room, the timing of the content chosen by someone miles away they've never met, and their varied tastes meaning that 4 of them aren't watching what they want to watch?

If a man from mars came to Earth knowing nothing, and all he wanted was the widest range of content, available on the widest range of platforms, before even considering cost (once he considers cost, things get much worse for Sky obviously), do you honestly think, even with price not a consideration, the answer he'd land on is Sky TV?

Look, I see myself as a deep value investor. I've watched it all the way down. I've nearly bought the damn thing. By any fundamental valuation measure, it has looked cheap for a long time.

The answer isn't to look deeper at Sky TV. The answer is to look away, and look at the rest of the world, and how it has changed.

At best, you're in a business of collecting money from lazy, old people until they die. At best. Is that really the business you want to be in?

Go and talk to a hundred eighteen year olds going flatting. In my circle, back in the dark ages, there was a list of essentials - bed, stereo, couch, TV....Sky subscription.

Talk to the equivalent circle, a hundred eighteen year olds today. How many will sign up with Sky? My guess is zero.

Just lol.

Not this argument again.

Go back to the 2nd page of this thread. Yes, all the way back to 2008 - over 13 years ago!

Here's the link:

https://www.sharetrader.co.nz/showthread.php?4216-SKT-Sky-Network-Television-Limited&p=208079&viewfull=1#post208079

The argument that Sky is dead seems to never die. The irony is that Sky never dies.

This is why I'm making a huge bet on this stock because the fundamentals of this stock hasn't changed but the market keeps buying into this "netflix" doomsday story that never eventuates. The reason is because satellite and the internet are two different things.

The company was doing fine and paying dividends for ages. Then all of a sudden the market falsely believed the streaming story and it caused the stock price to collapse.

The funny thing is that the stock used to make about $200m per year and it basically still does today.

And just lol about the alien analogy. How do you think space ships work? Do you think they use cat5 ethernet wire or a wifi access point in space. No, it's satellite technology!

The point is, is that the business is not in decline. It's actually growing customers. It's also well position in the streaming market plus still has the monopoly of traditional pay TV.

No one is saying that this company is worth billions but it's a good cash cow that is selling for only $100m.

[bung5]

Just lol.

The funny thing is that the stock used to make about $200m per year and it basically still does today.



You sure about that?

[Stranger_Danger]

Just lol.

The argument that Sky is dead seems to never die. The irony is that Sky never dies.

This is why I'm making a huge bet on this stock because the fundamentals of this stock hasn't changed but the market keeps buying into this "netflix" doomsday story that never eventuates.

A doomsday story that never eventuates? The stock is down from around $6 to 26.5 cents. How much more doomsday are you looking for?

The fundamentals of the stock, and the outlook for the future, have profoundly changed. I'm no doubt leaving plenty out but

- Netflix, Apple, Amazon, Disney, Hulu and many many others are engaged in a content producing land grab where they are willing to pour billions into making unique content in order to sign up customers to a streaming service.

- Some kid wrote some software so they steal content from the xbox in their bedroom, which their parents presumably thought was just for playing games. This morphed into the Kodi project, and there are thousands of others, for mobile and desktop platforms. More than providing the software that allowed TV viewers to "cut the cord", the real easier to miss revolution was a change in receiving content as a family unit at a set time, to each individual choosing their device, platform, time and content.

- Realising that providing pre recorded content by satellite is a business with no future, the businesses like Sky TV have been cutting each others throats paying over the odds for live content such as sports. For example, witness the insane amounts paid for WWE content - the product is getting worse, the ratings are getting lower, but for he TV network, it is live and they can sell ads around it, so they've paid silly amounts.

I could go on but in 2008 you didn't have the biggest companies in the world creating new content and selling it as a loss leader, you didn't have thousands of kids writing software to make piracy easier, not just cheaper, than the legal alternative, and you didn't have the pay TV providers paying truly insane sums for live content believing, correctly, that this was the only part of the industry they hadn't already lost.

The fundamentals have profoundly changed. The share price is telling you that. The actions of young people - eg where business growth needs to come from - are absolutely screaming it.

Now you, Ogg, may well have got close to the "bottom" price and you may get a puff out of this cigar butt. Even I was sorely tempted at the price you paid. But you're kidding yourself if you think the fundamentals have not changed.

[Stranger_Danger]

No one is saying that this company is worth billions but it's a good cash cow that is selling for only $100m.

I like a cash cow as much as the next man - a business that churns out cash and returns it to the shareholders.

2020 : 0.00cps
2021 : 0.00cps
2022 : 0.00cps
2023 : 0.00cps
2024 : 0.00cps
2025 : 0.00cps

Those are my projections for the "milk" to be delivered in dividends by this cash cow in the near term.

What are yours? Check back in 2025?

[huxley]

I’m in my early 30’s and attempted to become a Sky customer as an experiment. Looking through their website, I just can’t find anything compelling about the product. Everyone I know could easily afford to purchase a sky sub, but they don’t. Instead they use a chromecast and stream content on demand. I lived in a flat with Sky once, this was in 2010. We got it to watch the football World Cup and cancelled it shortly afterwards. The only group of people I do know who have a traditional Sky sub are in their 60’s. Granted this is just a personal perspective, but I just can’t see any longevity in SKTs traditional business model. It’s streaming services look more promising but are currently such a small percentage of earnings. Interesting times, but I can’t buy the product or the share. Good luck to holders.

[winner69]

I like a cash cow as much as the next man - a business that churns out cash and returns it to the shareholders.

2020 : 0.00cps
2021 : 0.00cps
2022 : 0.00cps
2023 : 0.00cps
2024 : 0.00cps
2025 : 0.00cps

Those are my projections for the "milk" to be delivered in dividends by this cash cow in the near term.

What are yours? Check back in 2025?

..at least the projected divies aren’t declining ;)

[Snoopy]

Sky TV is a company I am able to understand. My investing style is one of a consolidation approach. To me it makes no sense to diversify and put a bunch of money in my, say, 30th 'best idea' when I have an opportunity to acquire more of my 1st best idea at a large discount to intrinsic value. In that respect I am a worshiper of the Church of Munger, and Charlie is my Cult Leader.


I am a bit of a Munger/Buffett disciple myself. I agree that it doesn't make much sense to put a lot of effort into your 30th best idea. But what about your second best idea? I don't see Buffett and Munger going all in on one horse.



It is also important to note that risk does not equal volatility.
Risk = not knowing what you are doing. Time will either prove that I do know what I am doing when it comes to Sky, or that perhaps I didn't understand the business as well as I thought I did.

I continue to like the business, and the story has not changed at all from when I first invested in the company. If the story changes, naturally I will review my position. Until then, if Mr Market keeps offering equity in the company for what I believe are low prices relative to intrinsic value, I will keep buying more.


I am not suggesting that you don't know what you are doing MistTea. FWIW, I don't accept the 'Stranger Danger' theory that because 18 years olds are not signing up you should get out of Sky. I do accept the macro argument that SD makes that 'eventually' Sky in its current format will disappear. But I do think there is money to be made by Sky in the transition phase (which might be twenty years). And, of course Sky is adapting to the new environment. The Sky business model is not set in stone.

Where I think your 'laser focus' on Sky is letting you down MistaTea is that this COVID crisis has thrown up other opportunities in other industries. These opportunities were not there a month ago. But you can't see them, because you are not looking. By not looking at other opportunities you are increasing your 'portrfolio' risk in a way that is not only unnecessary, but is also not prudent, IMO.

SNOOPY

[mistaTea]

With the greatest of respect, I'm not sure you understand Sky TV as well as you think you do.
You may well be right.


You may understand it as a company, a balance sheet, a management team, all of these things in and of themselves, but the key to how this investment is performing and will likely turn out is to understand Sky TV in relation to the world around it.
One cannot claim to 'understand' the business unless they also understand the wider industry, who the customers are, changing attitudes and tastes etc. It is not enough to just understand the Balance Sheet, I agree. To the best of my ability I have tried to build up as big a picture as I can about Sky TV, including issues around piracy.


When I've raised piracy options, you typically respond to it as a moral issue. And as a moral issue, you win, piracy is stealing etc etc.
It sure does baffle me when I think you can get HBO, Showtime, FX and much more legally from Sky for 45c per day. Why anyone would want to take on the moral hazard of stealing when content has never been so cheap is bizarre.
But it can baffle me all it likes - the reality is people do steal content (either by outright stealing by torrenting on sites like Pirate Bay etc or using VPNs to grab content that sits behind a paywall in NZ but is free in other jurisdictions).

A few years back I think it was John Fellet who pointed out that Netflix is not Sky's biggest competitor - piracy is. Hence Sky taking legal action to try and stamp it out (futile imo - and new management has been a lot quieter on this front than the previous gang). At the time I remember people just giving the polite smile we reserve for dotards - it didn't suit the narrative at the time about Netflix being the Cable TV Killer (in our case, Satellite TV).
But it remains true, Piracy is the largest competitor. And it's not just the stereotypical pimply faced 18 year old who is holed up in his room hacking websites instead of going out drinking and trying to get a leg over with some girl! I know people in their forties who have exploited software like Plex to provide a very user friendly platform to surface their stolen content. They are then able to share their libraries with their mates.

It is a problem. It always has been a problem, and it always will be.

But...

I also think it is a mistake to think that because Piracy is a real issue that therefore Sky TV has no future. Not every 'young person' has the ability nor inclination to maintain feeds that pull in content (of varying quality sometimes) from a range of sources. Paying someone a 'reasonable' (low) fee to guarantee quality and provide the content in a nice UI is still the preference of many I believe. Netflix has been an amazing success despite the fact that people can easily Pirate.

My view is that, with the plethora of individual Netflix-style services entering the market - there is still a place for a good content aggregator. Time will tell if Sky become that aggregator for NZ - but you would have to say that they are in the best position compared to others to become that player. They are right to invest heavily in streaming - it will provide them an ability to integrate with the likes of Netflix and also sell their traditional bundles for cheaper.

If they could increase subs between their NZ operation and RugbyPass to 1.5M customers, even if the ARPU was only $50 that would still be $900M of revenue a year.
And that is not ridiculous in my view, because despite Piracy being a major problem, Sky is actually growing their customer base.

2015: 851,561
2016: 852,679
2017: 824,782
2018: 767,727
2019: 778,740
2020: 950,000? (Big jump in part from Lightbox acquisition - 130,000 subs - but also more organic growth as people ditch satellite in favour of streaming).

If everyone under a certain age was pirating and refused to pay for their content I think Sky TV subs would only go one way - down. Regardless of whether they stream or stick to satellite.

On a final note - my expectation is that their streaming services will continue to grow (especially when their new services are rolled out soon) but at the same time I think they will maintain hundreds of thousands of satellite customers. The 'oldies' you refer to. You are right that they are far less likely to ditch the satellite service they are used to for a new streaming service. That provides Sky with a large base of high-paying subscribers which ease the financial pressure that comes from transitioning to a cheaper streaming business until you hit a critical mass of subscribers.

I really enjoy the discussion! Thanks for taking the time to post a thoughtful and well-articulated argument.

[bung5]

IMO SKYTV best bet is to buy a cheap ISP and use their retail to sell/support

[mistaTea]

I am a bit of a Munger/Buffett disciple myself. I agree that it doesn't make much sense to put a lot of effort into your 30th best idea. But what about your second best idea? I don't see Buffett and Munger going all in on one horse.

Munger often brags that he only owns 3 investments - Berkshire, Costco and Li Lu. A little disingenuous given Berkshire is a massive holding company, but I still take the man's point! :D
You only need a handful of really good ideas to do well over time in this business.



Where I think your 'laser focus' on Sky is letting you down MistaTea is that this COVID crisis has thrown up other opportunities in other industries. These opportunities were not there a month ago. But you can't see them, because you are not looking. By not looking at other opportunities you are increasing your 'portrfolio' risk in a way that is not only unnecessary, but is also not prudent, IMO.

SNOOPY

That is one possibility, sure.

[sb9]

Fascinating arguments from an investment point of view both for and against. I for one loathed them as a customer especially when Fellet was in charge where they missed the trick by not aligning themselves to be proactive and be future ready. Instead they just been greedy with their monopolistic situation and hung onto their dollars. And paid price over recent years and got themselves into current debacle. Not their customer anymore, but the new CEO Martin seem to be making his best effort to turn this around, but is it too late? time will tell.

Disc-Not a holder.

[ScrappyO]

An issue is also the way the content is disappearing for sky....Disney...Netflix (who make there own content)….What happens when the BBC finally decided to setup there own streaming service, all those over 60s will have nothing to watch.

[k14]

An issue is also the way the content is disappearing for sky....Disney...Netflix (who make there own content)….What happens when the BBC finally decided to setup there own streaming service, all those over 60s will have nothing to watch.
No different to NZ Cricket. Have no idea how they are going to get coverage to the non-tech savvy population now with the demise of radiosport and all NZ based cricket from next summer forward being broadcast on spark sport.

Great discussion, as I have already mentioned in this thread, I have previously been a satellite subscriber, tried Sky Sport Now over summer but will head back to satellite when sport starts up again as the product is superior. Going to put my money where my mouth is as I just put in a small buy order for SKY :) Lets see how this pans out.

[mistaTea]

An issue is also the way the content is disappearing for sky....Disney...Netflix (who make there own content)….What happens when the BBC finally decided to setup there own streaming service, all those over 60s will have nothing to watch.

Absolutely - Sky live and die by the relationships they are able to maintain with premium content creators. Clearly, if everyone decided to 'go it alone' and launch their own Netflix-style offerings in NZ then Sky would not have a business at all.

As each new player enters the market it becomes more difficult (if not impossible) to make any money though. There is a limit to the number of subs a person is willing to juggle. When you subscribe to multiple services you very soon start paying in total what you used to pay for the satellite bundle.

In NZ we already have a range of offeirngs including Netflix, NEON, Lightbox, Amazon Prime, Disney+, AppleTV+...

Will HBO, Showtime and now HULU break their profitable deal with Sky to also enter the already-crowded and relatively small NZ market? Look, anything is possible - but I don't think the economics would stack up.

I for one currently juggle Netflix, Lightbox, NEON, TVNZ On Demand and Sky Sport NOW. If the new service Sky is about to release allows me to subscribe to most of those for a reasonably-priced bundle I would much prefer to switch to a single platform that aggregates all of that content. If they also managed a deal with Netflix that allowed me to surface Netflix Content next to the Sky content that would be even better - it would make it so much easier for me to work out what to watch.

[Ogg]

will head back to satellite when sport starts up again as the product is superior.

/thread

This guy gets it.

Still plenty of buffs left in this cigar.

[klid]

If you manage to buy enough shares, let the board go - do some management reshuffling, let me advise - we'll be all go.

There is a distinct difference between a channel broadcast and fetching on-demand content. For me: there is something nice about being able to watch the same thing that you don't fully control, that thousands/millions of other people are all watching at the same time, that you just don't get from Netflix.

The answer here is to be a pioneer and go super online with a combined "On Demand" AND "Channel broadcast" AND "Pay per view" AND "Box office" (whilst of course retaining the legacy satellite television broadcast).

Boom.

But I don't see it happening. I have small hope.

[mistaTea]

The answer here is to be a pioneer and go super online with a combined "On Demand" AND "Channel broadcast" AND "Pay per view" AND "Box office" (whilst of course retaining the legacy satellite television broadcast).


Yes, Agreed. The new service should ultimately provide all of those options so people can watch the way they prefer.

My personal opinion is that the service should have a heavy On Demand focus - since this seems to be the way the majority like to consume their content now. Still have an easy-to-use Linear Broadcast for those who like to channel surf though.

I think this is part of where VodafoneTV has gone wrong. Their system is very clunky and still has a Linear TV focus with On Demand as a secondary feature.

They need to flip that on it's head if they want to be the streaming platform of choice. I did give feedback to them when I used their system for a year...the response I got back was "thanks for your feedback, but our analysis shows that the majority of people still watch TV via linear".

Well, sure...that is currently the case because the main offerings of Sky and Freeview still deliver their content that way. I don't think that is the way most people want to watch TV now though, and certainly not where trends are heading. So I think Vodafone have missed a trick there.

[mistaTea]

Low trade volumes again today.

Black Crane will need to open up the cheque book a bit if they want to keep adding material amounts to their position.

They can currently pick up about 650K shares for under 33c...

[Entrep]

Plenty of funds have plenty of positions in plenty of shares. Not all of them are correct. What's the big deal with Black Crane?

For me there's a very simple test if I've bought a share and it's gone down from my buy in price. That is, would I buy at this price if I didn't have my existing holding? If yes, keep considering it. If no, then absolutely do not average down.

[mistaTea]

For me there's a very simple test if I've bought a share and it's gone down from my buy in price. That is, would I buy at this price if I didn't have my existing holding? If yes, keep considering it. If no, then absolutely do not average down.

I take the exact same approach :t_up:

[Ogg]

An old article from 18 months ago.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12143301 (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12143301)

What's the possibility of this actually happening, given that the stock price has lost 90% of it's value since that date?

[mistaTea]

Low trade volumes again today.


I spoke too soon!

[mistaTea]

Interesting viewrship stats for NZ for 2019:

http://www.digitaltvnews.net/?p=34431 (http://www.digitaltvnews.net/?p=34431)

Netflix still King, but even Sky TV managed to reach more eyeballs (through organic growth in streaming services NEON and Sky Sport NOW outstripping satellite sub losses). Lightbox did well too - I know of people who pay for the service and don't just get it as part of a Spark package. Given Lightbox is the second most popular streaming service in New Zealand, Sky's acquisition makes sense imo.

Let's just hope that the merged 'NEONBOX' service is a far cry from clunky NEON and more of a 'LIGHTBOX on steroids' :t_up:

If Spark maintains a wholesale deal for the new service and assuming the new app is high quality - you just watch subscriptions explode for the service.

All services reaching more viewers despite the Pirates being a pain in the ass too I might add.

Only issue Netflix and other streamers have to think about as the market becomes more saturated is how to manage account sharing.

[winner69]

Crane pretty excited

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12324429

[allfromacell]

This is good news, SKY really need some NZ sports teams playing again ASAP.

https://www.newshub.co.nz/home/sport/2020/04/nrl-2020-government-reportedly-gives-nz-warriors-permission-to-fly-to-australia.html

[Sideshow Bob]

This is good news, SKY really need some NZ sports teams playing again ASAP.

https://www.newshub.co.nz/home/sport/2020/04/nrl-2020-government-reportedly-gives-nz-warriors-permission-to-fly-to-australia.html

Even though I hate the NRL, bloody hell I might almost be forced to watch it....

[blackcap]

Even though I hate the NRL, bloody hell I might almost be forced to watch it....

Haha if there is some live NRL on offer I will be balls deep. I have resorted to watching Trackside lately.... yeah in Australia the horses are still going around.

[Zaphod]

Over lockdown to date, I have heard plenty of chat about what to watch on Netflix and pretty much zero about things to watch on SKY.

Had enough of Netflix. Plenty of content, but only some of it watchable. Very overrated. We ended up with multiple subscriptions just to watch the things we wanted, totally close to the Sky sub.

[Ogg]

Here's my Sky TV habits if anyone's interested :D

91 - CBNC. My go to channel after work. Normally I watch Squawk Box every night at 7pm. It has some sports content on the weekend but it's mostly crap. Nightly business report is OK. Has Mad Money but it's never on at a good time and I don't have MySky to record it.
87 - CNN. My go to news channel but has become way too liberal. I normally try and catch the news headlines on the hour.
85 - Sky news. Will watch sometimes but too many Aussie's trying to be American. Can only handle a few minutes at a time.
86 - Parliament TV. Will watch this sometimes if there's a life debate on. Most of the time the channel is dead.
74 - BBC Earth. Will watch David Attenborough stuff if it's on.
73 - History. One of my favourite channels on Sky. Lot of repeats on it though.
72 - National geographic. Also good. Watching "Cosmos: A personal voyage" recently. Good channel.
123 - MTV Classic. Normally watch this when I'm waiting inbetween other shows. Will try and catch the odd good song.
17 - Living Channel. Some OK shows on here. Will watch the odd property show. Never spend more than 15mins at a time here tho.
11 - Comedy Channel. ​Brain dead TV that I find myself watching too much of.
5 - Five. I watch Pawn stars regular on here. Also there's a Simpson marathon every Saturday afternoon that for some reason I watch if I'm dead bored.

Other channels that I check.
UK TV and Jones. Just for the lols and Monty python stuff. Vice, has the odd old-school movie. Food TV when I'm hungry. Turbo, wheeler Dealers reruns. RTV, and Aljazeera for different point of view on news. Fox news, after watching too much CNN. Nick, will watch the odd Spongebob.

[Sideshow Bob]

Here's my Sky TV habits if anyone's interested :D

73 - History. One of my favourite channels on Sky. Lot of repeats on it though.


And here I was thinking history never repeats.....:p

I blame lockdown. :mellow:

[nztx]

Low trade volumes again today.

Black Crane will need to open up the cheque book a bit if they want to keep adding material amounts to their position.

They can currently pick up about 650K shares for under 33c...

they had better get their act into gear fast, if they want to beat Parker & the tinkering fumbling Beehive Busy bodies
looking at pulling a 'Copy Australia & Shut the Door hard' trick..

[youngatheart]

NRL Rugby to start 28 May and may include the Warriors...
https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12325905

[youngatheart]

Hmmm. I noticed on Friday just after 4pm someone bought 150,000 shares which is quite a lot all at once for this share. Perhaps someone had a whiff of the news already?

[youngatheart]

Ohgawd, someone's mentioned SKT in a thread on the Sharesies fb page, please let's not have another AIR experience, lol.

[blackcap]

Athletics Nz doing their bit to help SKY:

Kia ora Athletics fans,

Hopefully you're still able to get your athletics and sporting fix at home, as we all do the right thing and stay home to look after each other. Way to go NZ!

If you need a little more entertainment, our good mates from Sky Sport are offering free trials for Lightbox & Neon, showing blockbuster movies and award-winning TV. They have also thrown in the chance to win 1 of 10 Neon 12 month subscriptions when you subscribe.

Sky has been a big supporter of athletics this year, live streaming the Jennian Homes New Zealand Track & Field Championships, Porritt Classic, Capital Classic and Sir Graeme Douglas International on the Sky Sport NEXT Youtube channel, as well as broadcasting the Sir Graeme Douglas International and Day 1 of Nationals live on Sky Sport TV.

Now is the chance to sign up, enjoy the free trials and show Sky some love from the athletics community, so we can see more athletics on TV in the future (and free trials are pretty sweet too, so why not!?)

[Ogg]

Ohgawd, someone's mentioned SKT in a thread on the Sharesies fb page, please let's not have another AIR experience, lol.

This is what I've noticed happens on SKT.

Stock gets pushed up in the morning by Sharesies users.
Stock gets dumped when ASX opens.
Stock gets pumped at 1pm when Asian traders first appear.
Stock peaks at around 3pm.
Stock gets sold off at around 4pm.
Stock closes below VWAP.

Rinse Repeat.

[youngatheart]

I've seen this too. It's very annoying! Peak SP seems to be 11am and 1.30pm...

[Ogg]

It hit 34.5 on the ASX. Equivalent to 36 on the NZX.

Trading bots must be glitching.

[steveb]

Well I hope you are right Ogg I have a small partial trade left over from friday at .295 will let it stand!

Wonder what will happen to the price if we comeout/stayin lockdown.They must be picking up new customers whilst in lockdown,but coming out might bring sport a bit closer.

[Ogg]

Well I hope you are right Ogg I have a small partial trade left over from friday at .295 will let it stand!

Wonder what will happen to the price if we comeout/stayin lockdown.They must be picking up new customers whilst in lockdown,but coming out might bring sport a bit closer.

https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio/bosses-in-lockdown-sky-tvs-martin-stewart/

I believe they've churned some sport subscribers but have offset this with more Lightbox and Neon subscribers.

Key would be seeing if those sport subscribers returned when the lock down lifts.

Also might be able to convert some of the movie channels when the free period ends.

Most important thing is that cash is flowing through the business, unlike most businesses in NZ right now.

Also interesting is that Sky claimed the wage subsidy for their broadcasting.

OUTSIDE BROADCASTING LIMITED
32 employees
$224,947.20

[mistaTea]

Also interesting is that Sky claimed the wage subsidy for their broadcasting.

OUTSIDE BROADCASTING LIMITED
32 employees
$224,947.20

Makes sense - Outside broadcasting Ltd not operating at all given there is zero live sport. So their revenue will be $0.

If Sky have not applied for it for the rest of their business then that is very promising as it means revenue has not taken a hit of >=30% for April 2020 relative to what it earned in April 2019.

[youngatheart]

Well sports could be back on the menu sooner than we know it :)

[mistaTea]

Well I hope you are right Ogg I have a small partial trade left over from friday at .295 will let it stand!

Wonder what will happen to the price if we comeout/stayin lockdown.They must be picking up new customers whilst in lockdown,but coming out might bring sport a bit closer.

With US oil crashing below $0 last night and the general negative market sentiment they usually follows oil price crashes...

Hopefully your offer at 0.295 is fulfilled.

I’m going to grab some more today too.

[youngatheart]

This is what I've noticed happens on SKT.

Stock gets pushed up in the morning by Sharesies users.
Stock gets dumped when ASX opens.
Stock gets pumped at 1pm when Asian traders first appear.
Stock peaks at around 3pm.
Stock gets sold off at around 4pm.
Stock closes below VWAP.

Rinse Repeat.

Curious to see if this plays out as planned today. However may Jacindas yesterday's late afternoon announcement drive up demand at opening?
Watching...

[Dlownz]

http://www.stuff.co.nz/business/121137864/sky-tvs-top-brass-take-25-pay-cut-but-company-not-eligible-for-wage-subsidies?cid=app-android.
So they haven't lost 30% revenue compared to other media. Wonder what it will be

[blackcap]

http://www.stuff.co.nz/business/121137864/sky-tvs-top-brass-take-25-pay-cut-but-company-not-eligible-for-wage-subsidies?cid=app-android.
So they haven't lost 30% revenue compared to other media. Wonder what it will be

It would be a stretch to think that 20-30% of subscribers cancelled due to Covid lockdown. Effectively that is where they derive their revenue. (albeit they do have some advertising as well which may have diminished) They do not rely so much on advertising as other media do and that may be their saving grace?

[Ogg]

http://www.stuff.co.nz/business/121137864/sky-tvs-top-brass-take-25-pay-cut-but-company-not-eligible-for-wage-subsidies?cid=app-android.
So they haven't lost 30% revenue compared to other media. Wonder what it will be

Was about to post this link.

Unlike other media companies, Sky's revenue isn't falling. In fact, the pandemic could be a positive as more people watch TV. The streaming part of their business is likely off setting any declines.

Sport will return shortly. People are happy with the free movie deal and also happy to watch old sport replays in the mean time.

Management taking paycut likely because of the long term stock performance.

Why the stock price fell 50% in March is bazaar. Sky is a great little cash cow that has a future.

It will never be a billion dollar company again but it's a joke that it's trading at just over $100m. If this isn't ripe for a take over I don't know what is.

[mistaTea]

It will never be a billion dollar company again...

For me, I think a more accurate comment might be that Sky may never be a billion dollar company again...

Long term, if RugbyPass is the success they hope it will be that alone could push Sky's market cap north of NZ$1B.

If Sky become a telco in the future (either through aquisition/merger or otherwise) that could also push Sky TV into the billion-dollar club again.

I am not attempting to make any predictions here and I agree that, regardless, a market cap below $NZ140M is just ridiculous even for where the company is currently.

But for the true investor, who does not care at all about quoted market value, and is only ever interested in the underlying performance of the business he owns...Sky has a lot of opportunity at the moment to attempt to exploit.

[Ogg]

Sky's market cap north of NZ$1B.


It's very possible.

However, the satellite business probably has a ceiling of about $1b in today's market. Maybe 10 years from now, $1.5B.

Like you said, for Sky to go past $1B it would need to venture into different markets. Streaming has the potential but there is just too many competitors in the market for it to succeed long term. It would also require more capital going forward.

I think it's best for Sky to stick with it's 'bread and butter' satellite business and get that to full value in the short to medium term.

What I see likely happening is a company like Comcast doing a take over. Comcast is entering the streaming wars this year with it's new Peacock platform. Comcast bought out Sky UK 18 months ago. They could very easily combined the companies together and then merge LightBox and Neon users into the new Peacock platform.

[steveb]

Sky TV in the uk seem to have taken advantage of the lockdown by putting their prices up not so sure sky would get away with such blatant price gouging here.

But does this not suggest a possible rise in subs?

[Ogg]

Comcast buys Sky UK for $38B

https://www.cnbc.com/2018/09/22/sky-comcast-fox-36-billion-takeover-auction.html (https://www.cnbc.com/2018/09/22/sky-comcast-fox-36-billion-takeover-auction.html)

Comcast streaming service

https://www.cnbc.com/2019/11/01/nbc-peacock-may-be-free-for-all-users.html

This is what I see happening.

Comcast buys Sky NZ. Then merges LightBox and Neon into the new streaming platform Peacock. The service will then be free for all users on an ad supported basis but Sky subscribers would get it with no ads.

Sky would then have NBC shows and Universal movies shown on satellite channels for no extra cost as the company would be virtual integrated.

OSB would be sold off to NEP.

DYOR.

[mistaTea]

What I see likely happening is a company like Comcast doing a take over. Comcast is entering the streaming wars this year with it's new Peacock platform. Comcast bought out Sky UK 18 months ago. They could very easily combined the companies together and then merge LightBox and Neon users into the new Peacock platform.

I agree that the most logical outcome for Sky TV is a takeover. Could there end up being a tussle between the likes of Comcast and DAZN? Possibly.
Could Foxtel look at buying the company too? Quite possibly.

Though the current market capitilisation looks like a 'no brainer' for a takeover, clearly that is not anywhere near what someone would have to pay to purchase the whole business. It would all boil down to how much one of these outfits would be prepared to pay and if that would be enough to get support from key shareholders like RugbyPass and NZ Rugby.

If someone was able to pick up the entire business for, say, $1.50 a share (~NZ$650M or ~US$390M) I think that would be a bargain for the likes of DAZN considering the assets and large customer base they would acquire and the avoidance of an expensive bidding war to get hold of rugby, league, netball etc.

Time will tell I suppose as to whether or not any of these 'big boys' will recognise the value/opportunity that Sky presents. It would be sad though for another business to disappear from the NZX. But thems the breaks.

[blackcap]

If someone was able to pick up the entire business for, say, $1.50 a share (~NZ$650M or ~US$390M) I think that would be a bargain for the likes of DAZN considering the assets and large customer base they would acquire and the avoidance of an expensive bidding war to get hold of rugby, league, netball etc.


If someone wanted to they could get the whole lot for $1 a share right now. No need to pay $1.50. (They might not get your shares MT, but they would get the 90% easy.)

[mistaTea]

If someone wanted to they could get the whole lot for $1 a share right now. No need to pay $1.50. (They might not get your shares MT, but they would get the 90% easy.)

Look, anything is possible I suppose.

But I have reservations about $1/share being enough.

If they went by Scheme of Arrangement (which, as we know blackcap from NZOG is 'all or nothing') I think it would fail. Of the shareholders who bothered to vote, getting 25% to vote NO would not be too hard particularly given RP and NZR would be unlikely to sell their shares in a strategic partnership with Sky for less than what the shares were worth when they did their deals with Sky not too long ago.

A suitor could try to do a hostile takeover and just start buying up the shares I suppose. But I doubt they would be able to hit the magical 90% unless they offered a price that was a better representation of 'fair value' for the business. RP and NZR alone have over 11% of the shares outstanding and I doubt they would let go of their shares too easily. There will be other long term investors who arent too bothered by the current low SP, but would be open to sell for a reasonable price (like me).

I stand to be corrected, but my view is that the current SP is so far divorced from the realistic price shareholders would get if they sold the business to someone who wanted to take it private - like in the order of 5x minimum.

[Ogg]

Have you bought any more on market MistaTea? :D You got half a million shares yet?

[steveb]

There are so many shareholders way under water on this that $1.00 a share is just not going to cut it.Quietly accumulate then go in at your $1.50 and hope like hell the commerce commission gives the green light.
But yes you are quite right Blackcap that $1.00 should be enough normally a 40-60% premium would secure most companies.

[k14]

Was about to post this link.

Unlike other media companies, Sky's revenue isn't falling. In fact, the pandemic could be a positive as more people watch TV. The streaming part of their business is likely off setting any declines.

Sport will return shortly. People are happy with the free movie deal and also happy to watch old sport replays in the mean time.

Management taking paycut likely because of the long term stock performance.

Why the stock price fell 50% in March is bazaar. Sky is a great little cash cow that has a future.

It will never be a billion dollar company again but it's a joke that it's trading at just over $100m. If this isn't ripe for a take over I don't know what is.
The other side which I have not got a full understanding on is that it seems Sky only have to pay for the rights if the sport is actually played (someone correct me if I am wrong). I make this comment on the basis of all the sporting codes asking government support. So not only is revenue down only slightly, expenses are also reduced. Although that would possibly be offset by advertising revenue?

[blackcap]

There are so many shareholders way under water on this that $1.00 a share is just not going to cut it.Quietly accumulate then go in at your $1.50 and hope like hell the commerce commission gives the green light.
But yes you are quite right Blackcap that $1.00 should be enough normally a 40-60% premium would secure most companies.

I actually think 60 cents would be enough, a 100% premium on the 30 day weighted average, but as I am a holder too, I was being optimistic. The share price is at 31 cents for a reason. I would jump at the chance to get $1.

[mistaTea]

I actually think 60 cents would be enough, a 100% premium on the 30 day weighted average, but as I am a holder too, I was being optimistic. The share price is at 31 cents for a reason. I would jump at the chance to get $1.

60c would make a huge amount of sense to a stock trader, agree 100%.

It would be ludicrous for an investor though. I think there are more investors in Sky TV than you give credit for.

[blackcap]

60c would make a huge amount of sense to a stock trader, agree 100%.

It would be ludicrous for an investor though. I think there are more investors in Sky TV than you give credit for.

Maybe, maybe not. The question I keep asking is, why is the price 31 cents. If investors were so convinced, then the price would not be trading where it is. I am not a trader, I am an investor. If I could get 60 cents today, I should thank my lucky stars because the market is not giving that to me today. As financial theory goes, "the best predictor of tomorrow's price, is today's price".
And you may be right and the market may be wrong but that "wrong market" can last longer than most investors can stay liquid/sane/patient etc. Lets hope we are right and the market is wrong. I might be tempted to pick some more up at these levels, the signs are more encouraging than I thought but the debt really worries me.

[Ogg]

I actually think 60 cents would be enough, a 100% premium on the 30 day weighted average, but as I am a holder too, I was being optimistic. The share price is at 31 cents for a reason. I would jump at the chance to get $1.

60 cents would probably be enough to start a take over but given the amount of potential buyers there would likely be a bidding war. Same thing happened with Sky UK.

It could also take months to play out and involve the commerce commission again. The market has changed a lot since the Vodafone proposal. My feeling is that there has been a material change to the current environment and that a telco company should be able to take over Sky, except for Spark obviously. I don't know why Vodafone doesn't try and do another take over attempt and argue that things are different now then they were back in 2017. Technology changes fast.

[steveb]

yes agree ogg of course vodafone have new owners now,but have you given any thought to NZ Rugby or even Sanzar having a go?

[Ogg]

have you given any thought to NZ Rugby or even Sanzar having a go?

They don't have any money do they?

[steveb]

Sky's assets alone would enable a leveraged takeover,as long as Sky are making enough money to pay for the finance costs it should be easy.

[Ogg]

List of potential buyers.

-Comcast
-Newscorp
-Telstra
-Vodafone
-Vocus Group
-Nine Entertainment Co.
-Trilogy International Partners

[mistaTea]

, I am an investor. If I could get 60 cents today, I should thank my lucky stars because the market is not giving that to me today.


Imo these two sentences contradict each other. I don't want to write a sermon on the difference between the type of investor who is interested in market value (who more often than not is actually a speculator) versus the long-term investor. But for the long-term 'value investor' market value is largely irrelevant. If your independent analysis of the company leads you to believe that it is worth, say, $1 per share minimum...then 60c is a non-starter. It is irrelevant that it happens to be 2x the current market value.

When I say that I do not care about the quoted value of the businesses I own - I am not kidding. I literally don't care. Appreciate that there will be many holders of Sky shares that don't share my perspective, but I don't think I am alone either.


As financial theory goes, "the best predictor of tomorrow's price, is today's price".
And you may be right and the market may be wrong but that "wrong market" can last longer than most investors can stay liquid/sane/patient etc.

Efficient Market Theory and Modern Portfolio Theory works very well for those who own a basket of stocks without any real understanding of the underlying companies that make up the basket. For them, all that matters at any given point in time is the quoted value of the portfolio. So at any given point of time, the total market value is the value of the portfolio. If they could get 60c per share it would be a huge boon (they wouldn't pause to ask themselves how Sky TV could suddenly be worth twice what it was 'worth' yesterday - it wouldn't be relevant to them).

But for those who have analysed the company, and have purchased a share of the business based on a sound understanding of the business (which includes understanding the wider industry, competitors, threats, opportunities etc...) the market value of the stock is completely irrelevant (other than being a buying opportunity when it seems low relative to intrinsic value or a selling opportunity if it is ridiculously high relative to intrinsice value).

I fit into that category. I wouldn't be itnerested in a price unless it at least approached IV. And I am not alone.

Ah, Christ! I ended up writing a sermon in the end didn't I?! :D

[winner69]

Keith Smith be a good Director won’t he?

Might bring a bit more common sense to the Board

Amazing that Handley still on the Board.

[Entrep]

Maybe, maybe not. The question I keep asking is, why is the price 31 cents. If investors were so convinced, then the price would not be trading where it is.

Same boat here. Debt is worrying and price has been down in the doldrums for so long. Look at the chart too.

That is a boon for investors like mistaTea however, as they themselves say they are confident in the underlying business, don't care about price for now, and can buy more "cheap".

I would have definitely had a punt a few years ago, not so much these days.

[blackcap]

Imo these two sentences contradict each other. I don't want to write a sermon on the difference between the type of investor who is interested in market value (who more often than not is actually a speculator) versus the long-term investor. But for the long-term 'value investor' market value is largely irrelevant. If your independent analysis of the company leads you to believe that it is worth, say, $1 per share minimum...then 60c is a non-starter. It is irrelevant that it happens to be 2x the current market value.

When I say that I do not care about the quoted value of the businesses I own - I am not kidding. I literally don't care. Appreciate that there will be many holders of Sky shares that don't share my perspective, but I don't think I am alone either.



Efficient Market Theory and Modern Portfolio Theory works very well for those who own a basket of stocks without any real understanding of the underlying companies that make up the basket. For them, all that matters at any given point in time is the quoted value of the portfolio. So at any given point of time, the total market value is the value of the portfolio. If they could get 60c per share it would be a huge boon (they wouldn't pause to ask themselves how Sky TV could suddenly be worth twice what it was 'worth' yesterday - it wouldn't be relevant to them).

But for those who have analysed the company, and have purchased a share of the business based on a sound understanding of the business (which includes understanding the wider industry, competitors, threats, opportunities etc...) the market value of the stock is completely irrelevant (other than being a buying opportunity when it seems low relative to intrinsic value or a selling opportunity if it is ridiculously high relative to intrinsice value).

I fit into that category. I wouldn't be itnerested in a price unless it at least approached IV. And I am not alone.

Ah, Christ! I ended up writing a sermon in the end didn't I?! :D

No worries, always good to be on the receiving end of a sermon :)

Tell you what, I will sell you my shares for 60 cents.. obviously a bargain :p

[macduffy]

Ah, Christ! I ended up writing a sermon in the end didn't I?!

But it was a pretty good one, mT!

I disagree on one point though. If the market price of your stock becomes low enough to attract an unwanted - in one's eyes - takeover bid, and worse still if the bid succeeds, then the price suddenly becomes very relevant!

[moimoi]

Not many, if any, takeovers have occurred on the NZX @ 5 X current market value a la today's post's about $1.50. :ohmy:

[mistaTea]

I disagree on one point though. If the market price of your stock becomes low enough to attract an unwanted - in one's eyes - takeover bid, and worse still if the bid succeeds, then the price suddenly becomes very relevant!

Sure, an unwanted takeover - if successful - could mean that even the most diligent investor who has done all of his homework ends up realising a loss. There is always some risk.

But the investor doesn't really dwell on those possibilities when taking a position.

So, for example, when Sky TV was 70c a share recently... if, after a thorough analysis, you formed the view that 70c represents a significant discount to long-term IV... what do you do?

Do you sit there and say "Sh1t, I better just wait because the market value might drop further...and then that could spark an unwanted takeover, and I might actually lose money if the offer price succeeds but is lower than my purchase price!"

?

Now you are not being an investor anymore - you are being a speculator. Nothing wrong with that, so long as you are self-aware.

If I took that approach I would never buy anything though! And I don't believe that way of 'investing' would likely lead to long-term success overall.

[macduffy]

No argument on that mT. I was only making the point that there is at least one situation when the shareprice ceases to be "completely irrelevant".

[mistaTea]

No argument on that mT. I was only making the point that there is at least one situation when the shareprice ceases to be "completely irrelevant".

Yeah it is a fair point - there are all sorts of those situations. Even the most hardcore 'deep value' investor is still exposed to Market Risk.

That Market Risk could manifest in a number of ways:


Even if the investor is right about the 'true intrinsic value' of the business...the market may never agree, and the price of the stock may never appreciate to IV.
Even worse, the price may fall further and then stay low forever
If the price falls further - as you point out - an unwanted takeover could ensue, which would force the investor to realise a loss.


The Market Risk is mitigated to a large degree by the investor by only buying when he believes the price includes a large margin of safety. But even then - that only mitigates the risk, it does not eliminate it.

Risk is just something I have to live with, but let's hope your example doesn't turn into prophecy!

I was thinking a bit more about an 'unwanted takeover' situation. I still think the offer to realistically take the company private would need to be significantly higher than blackcap thinks.

Using NZR as just one substantial shareholder as an example. Their deal with Sky was done based on a SP of ~$1.10 per share from memory. A 60c/share takeover would represent a significant amount of money for them (loss). Beyond the money though, their ~5% stake in Sky is a very strategic asset for them. It gives them a seat at the table to influence how Sky represent and promote rugby on its wide range of platforms. To give up that kind of strategic asset, one would think it would really need to be worth NZR's while.

If I was a gambling man, I would say there have already been expressions of interest. But the offers may have been sub $1/share - and have been rejected by The Board and key shareholders.

[macduffy]

If I was a gambling man, I would say there have already been expressions of interest. But the offers may have been sub $1/share - and have been rejected by The Board and key shareholders.

Depending on how any such expressions of interest were expressed, the board would have to consider whether or not they were legally obliged to advise shareholders of the circumstances.

[mistaTea]

Depending on how any such expressions of interest were expressed, the board would have to consider whether or not they were legally obliged to advise shareholders of the circumstances.

Correct, if someone came with a 'firm offer' then the board may be forced to present it to shareholders (even if they think it is low), subject to an independent review etc.

I don't think anyone has made a formal offer.

But I do think there are likely to be those who have started to kick the tyres a bit, and guage what The Board (and potentially some of the large sharehodlers) would expect in terms of price.

If the expected price is higher than any of these potential buyers are willing to pay then that could be the end of the story.

[mistaTea]

https://www.sky.com/shop/tv/disney-plus/

Even though Disney have launched their own OTT service, they are still open to deals with aggregators it seems. Netflix currently have a wholesale deal with Spark, why not do a deal with Sky and let their growing library of Netflix originals aggregate with Sky's HBO, Showtime etc content?

The ability to bundle multiple subs so that all content is managed in a single user-friendly platform would be an incredibly valuable service imo which should boost Sky TV subs. Martin Stewart has prophesised that ultimately the fragmentation we are currently witnessing will come back to bundling in some shape or form.

Spark Sport content could even be bundled in...we have a wholesale deal for Lightbox already (and will have a deal for the new Lightbox-NEON service). Why not a deal for sport? I think the Spark CEO would be open to it.

Not sure if they could do an integration with MySky too like how Sky UK have done with their Sky Q boxes. I believe the Sky Q boxes are a lot more advanced that MySky.

And why bother spending $$$ on a dying platform. Satellite will be around for ages, and Sky will keep hundreds of thousands of paying satellite customers for some time yet, but it is unlikely they will grow the book. Most investment will be in streaming, and I agree with that approach.

[Ogg]

https://www.stuff.co.nz/business/121225956/mediaworks-sky-tv-and-tvnz-may-have-best-reason-to-be-pleased-with-media-aid



Television channel Three owner MediaWorks, Sky Television and state-owned TVNZ are likely to be the biggest beneficiaries of the two largest elements of the package, together worth about $38 million.

Sky TV should benefit from the NZ On Air funding break, and from not having to pay Kordia to transmit its free-to-air channel Prime.

[mistaTea]

https://www.stuff.co.nz/business/121225956/mediaworks-sky-tv-and-tvnz-may-have-best-reason-to-be-pleased-with-media-aid

If we get $6M too it would be as though the taxpayer shouted our company Lightbox!

In the words of the infamous Jake ‘The Muss’ Heke: CHUR!

[Ogg]

Interesting read:



By 2019, the [streaming] market was deemed to have become oversaturated and fragmented, as the sheer number of services has led to increased diffusion of content among them, induced by studios using exclusive rights to their content as a selling point for their own new services (such as Disney+, HBO Max, and NBCUniversal's upcoming Peacock), and existing services (such as Netflix) being required to pay premiums to maintain rights to popular archive programs or lose them to rivals, and increase investment in original content as a selling point. Some critics have argued that the fragmentation of the market has defeated the purpose of cord-cutting, as consumers are now being required to spend money on multiple different services in order to access their desired content, and that these inconveniences (including fluctuating rights to popular content) may cause consumers to resort to piracy out of frustration. Source: https://en.wikipedia.org/wiki/Cord-cutting


The streaming market has become too saturated. Consumers have to subscribe to multiple streaming platforms in order to have access to their favorite content.

In other words, the incentive to cancel Sky and replace it with a single streaming service is now no longer possible. This maybe a reason why Sky satellite cancellations are slowing.

For example, a Sky customer might subscribe to Netflix for one month when new exclusive content is released but then cancel the subscription and move to Disney+ for a few months, then to Lightbox (HBO) etc. This maybe the new normal. Another example would be subscribing to Spark Sport for the cricket season and then cancelling.

It's likely that Sky will remain an 'anchor' platform in the typical kiwi household because of it's sport content and large variety of other television offerings (news, documentary, specialty channels etc).

[Zaphod]

Interesting read:



The streaming market has become too saturated. Consumers have to subscribe to multiple streaming platforms in order to have access to their favorite content.

In other words, the incentive to cancel Sky and replace it with a single streaming service is now no longer possible. This maybe a reason why Sky satellite cancellations are slowing.

For example, a Sky customer might subscribe to Netflix for one month when new exclusive content is released but then cancel the subscription and move to Disney+ for a few months, then to Lightbox (HBO) etc. This maybe the new normal. Another example would be subscribing to Spark Sport for the cricket season and then cancelling.

It's likely that Sky will remain an 'anchor' platform in the typical kiwi household because of it's sport content and large variety of other television offerings (news, documentary, specialty channels etc).

Couldn't agree more!

To add to the above, I am now spending more time finding content to watch than I am watching the content itself.

[Dlownz]

Maybe it's time for sky to make some announment to get this ball rolling again.
Surprised nzru haven't announced a resumption of rugby again nz sides in May like the nrl.

[mistaTea]

Surprised nzru haven't announced a resumption of rugby again nz sides in May like the nrl.

Well Sport still won't be allowed under Level 3. Level 3 goes for at least 2 weeks (until midnight 11 May). If we drop to Level 2 from then I am highly confident that there will be some local Super Rugby derby matches to look forward to. If NZ and Aus governments agree to trans-tasman travel soon, then even more possibilities could open up.

But it will all hinge on how long we are in Level 3 for. So even though Sky and NZRU are no doubt working on 'the plan' right now, and engaging with the government etc...they will want to announce something when they are sure it is going to happen.

Let's hope Kiwis still follow the rules so that we don't have a spike in cases over the next couple of weeks. If we ended up in L3 for a protracted period of time then we could soon get to the point that the rest of 2020 is a write off in terms of rugby.

[blackcap]

Well Sport still won't be allowed under Level 3. Level 3 goes for at least 2 weeks (until midnight 11 May). If we drop to Level 2 from then I am highly confident that there will be some local Super Rugby derby matches to look forward to. If NZ and Aus governments agree to trans-tasman travel soon, then even more possibilities could open up.

But it will all hinge on how long we are in Level 3 for. So even though Sky and NZRU are no doubt working on 'the plan' right now, and engaging with the government etc...they will want to announce something when they are sure it is going to happen.

Let's hope Kiwis still follow the rules so that we don't have a spike in cases over the next couple of weeks. If we ended up in L3 for a protracted period of time then we could soon get to the point that the rest of 2020 is a write off in terms of rugby.

I am not sure there will be sport at level 2 MT. This is from the govts own website:

Range of measures (can be applied locally or nationally)
Physical distancing of 1 metre outside the home (including on public transport).
Sport and recreation activities are allowed if conditions on gatherings are met, physical distancing is followed and travel is local.

https://covid19.govt.nz/alert-system/covid-19-alert-system/#alert-level-2-%E2%80%93-reduce
That would rule out all contact sports and most others such as netball, basketball etc. I know our tennis will only be starting again once we are in level 1. But hopefully we will move quickly from level 2 to 1.

[mistaTea]

I am not sure there will be sport at level 2 MT. This is from the govts own website:

Range of measures (can be applied locally or nationally)
Physical distancing of 1 metre outside the home (including on public transport).
Sport and recreation activities are allowed if conditions on gatherings are met, physical distancing is followed and travel is local.

https://covid19.govt.nz/alert-system/covid-19-alert-system/#alert-level-2-%E2%80%93-reduce
That would rule out all contact sports and most others such as netball, basketball etc. I know our tennis will only be starting again once we are in level 1. But hopefully we will move quickly from level 2 to 1.

I think the physical distancing relates more to the crowds/spectators?

My understanding was that at L2 you could at a minimum have the sports being played in empty stadiums?

That reads to me as though you could possibly have spectators so long as physical distancing was implemented?

[blackcap]

I think the physical distancing relates more to the crowds/spectators?

My understanding was that at L2 you could at a minimum have the sports being played in empty stadiums?

That reads to me as though you could possibly have spectators so long as physical distancing was implemented?

My understanding of it differs from yours. Read the govt website. I am sure they will not make exceptions on an ad hoc basis.

Our tennis does not start till we are in level 1.

If I read the list below, there is no doubt in my mind that organised sport will not be carried out in level 2. (happy to be proven wrong on that though)


Range of measures (can be applied locally or nationally)
Physical distancing of 1 metre outside the home (including on public transport).
Gatherings of up to 100 people indoors and 500 outdoors allowed while maintaining physical distancing and contact tracing requirements.
Sport and recreation activities are allowed if conditions on gatherings are met, physical distancing is followed and travel is local.
Public venues can open but must comply with conditions on gatherings, and undertake public health measures.
Health services operate as normally as possible.
Most businesses open, and business premises can be open for staff and customers with appropriate measures in place. Alternative ways of working are encouraged, such as remote working, shift-based working, physical distancing, staggering meal breaks, flexible leave.
Schools and Early Childhood Education centres open, with distance learning available for those unable to attend school, such as people self-isolating.
People advised to avoid non-essential inter-regional travel.
People at high risk of severe illness (older people and those with existing medical conditions) are encouraged to stay at home where possible, and take additional precautions when leaving home. They may choose to work.

[Ogg]

It's a strange situation as Australia are rushing ahead while NZ is being extra defensive.

I doubt sport will happen in level 3 - it's only two weeks anyway.

However, I see discussions maybe starting in late May with a start date in June as a possibility.

Having said that, I think the free Sky movies and old sport re-runs are working fine. Customers aren't ready for sport and are happy watching something different in the lockdown. Why rush sub-par sporting events with no audience? It's lame. When sport restarts again you want it to be an exciting.

If sport doesn't restart by September, then that might be a problem but things are fine for now.

[mistaTea]

Gatherings of up to 100 people indoors and 500 outdoors allowed while maintaining physical distancing and contact tracing requirements.
Sport and recreation activities are allowed if conditions on gatherings are met, physical distancing is followed and travel is local.
Public venues can open but must comply with conditions on gatherings, and undertake public health measures.



Just reading through the list you provided and focussed on the bit quoted above.

What am I missing here blackcap? To me that reads as though sport is allowed provided the conditions on gatherings are met. I believe the 'physical distancing' refers to the gatherings... not the sport participants?

I am 'pretty sure' that we will see a return of sport in Level 2, with restrictions.

[mistaTea]

I doubt sport will happen in level 3 - it's only two weeks anyway.

Definitely no sport under L3. The question seems to be whether or not it will be allowed when we drop to L2. I believe it will be.


Why rush sub-par sporting events with no audience? It's lame. When sport restarts again you want it to be an exciting.

Sure, in an 'ideal world' we would be able to launch back into live Super Rugby with crowds in attendance etc. The viewer experience from home is not as good when the stands are empty.

But that is probably not realistic, given where we are now. There are going to be big restrictions on crowd gatherings for some time I think.

But at the end of the day, the sporting bodies need to salvage whatever they can this year and Sky TV needs to get some live sporting events happening as soon as they can. Most people are pretty Zen about continuing to pay their sport subs while they get free Movies etc and we are all locked down. Once we hit L2 though and a lot of freedom of movement is restored and people aren't completely stuck at home I imagine they will begin to question why they are paying for a Sky Sport sub if there is no new and live sport to watch.

So even though it is far from 'ideal', Sky will be relieved to get something going as a starting point - even if it means empty stadiums to begin with.

[blackcap]

Just reading through the list you provided and focussed on the bit quoted above.

What am I missing here blackcap? To me that reads as though sport is allowed provided the conditions on gatherings are met. I believe the 'physical distancing' refers to the gatherings... not the sport participants?

I am 'pretty sure' that we will see a return of sport in Level 2, with restrictions.

We are just interpreting it differently, I interpret it to mean that all participants including those playing sports will have to follow physical distancing. I could be wrong. I take my cue from our tennis comp which will only commence under level 1. And tennis is pretty good at distancing at the best of times.

[Ogg]

We are just interpreting it differently, I interpret it to mean that all participants including those playing sports will have to follow physical distancing. I could be wrong. I take my cue from our tennis comp which will only commence under level 1. And tennis is pretty good at distancing at the best of times.

Just lol, who would wait for level 1. All this "level" stuff is crap anyway.

I walked past the Navy barracks this morning and I saw at least 75 people playing sport this morning - no joke. One group was playing touch the other was doing volley ball. I assume they're all in one big "bubble" as they are living together and doing training at the army base. But still, the point is that unless there's a massive outbreak again it won't be long until things are back to normal.

[blackcap]

Just lol, who would wait for level 1. All this "level" stuff is crap anyway.

l.

Totally agree with you. Drove past a cop when I in theory was driving in an area I had no real reason to be in. Cop just looked at me and did nothing.

But that aside, sporting bodies will be looking to toe the government line and as such will wait for "level 1" whenever that may be, before competitive sports starts up again.

[Ogg]

https://www.stuff.co.nz/sport/golf/121281444/coronavirus-golf-clubs-imposing-gate-checks-as-covid19-level-three-opening-looms


Golf and tennis will be the first sports to emerge from Level four lockdown, with stir-crazy golfers set to tee off from early Tuesday morning.

[mistaTea]

Just digging out some of the commentary from Sky regarding their debt...

As part of this growth plan, the Directors are also currently reviewing the funding structure of the Group given the investments required under the transformation programme and maturity of the $100 million bond in March 2021. The current bank facility expires in July 2022 with a stepdown in the bank facility from $200 million to $150 million by July 2021 (refer Note 7).

There has been talk of a discounted rights issue, but that would be the least favourable option in my view. Sky would need to raise at least $100M to clear the bonds for it to make any kind of sense. So, say a 1:1 discounted issue @25c/share raises ~ $109M.

Assuming they did not want to be diluted by half, NZRU would need to pony up ~$5.5M.

RugbyPass Investors LLC would need to pony up ~$6.3M.

I doubt very much either of those two major investors are in a position to come up with that kind of dough. And I do not think they would be very happy either with their holdings being diluted so savagely. Time will tell if I am wrong, but I will admit now that it would shock me and come as an unpleasant surprise.

Given the cheap money available, I still think a better approach is to review the funding structure to borrow more money on more favourable terms. Clearly Sky need more money to fund their ambitions, it's just a matter of how and with who.

Current debt accounts for ~27% of Revenue. When you look at NETFLIX, their borrowings account for more like 75% of Revenue. Now, I am not suggesting we should borrow like crazy in the way that NETFLIX has...but I think Sky can comfortably increase borrowing capacity whilst still being financially prudent. If that can't be achieved by issuing new bonds and/or negotiating better terms with The Australian banks, then look further abroad. In this climate I don't think it would be too difficult at all to find large financial institutions willing to loan money. And we wouldn't be paying a 6.25% yield either like we are with the bonds issued in 2014.

Going Concerns very rarely actually pay off their debt (which is what we would be attempting to do, at least in part, with a capital raise) - it's usually more a case of restructuring the borrowings as the facilities come due.

[blackcap]

Just digging out some of the commentary from Sky regarding their debt...

As part of this growth plan, the Directors are also currently reviewing the funding structure of the Group given the investments required under the transformation programme and maturity of the $100 million bond in March 2021. The current bank facility expires in July 2022 with a stepdown in the bank facility from $200 million to $150 million by July 2021 (refer Note 7).

There has been talk of a discounted rights issue, but that would be the least favourable option in my view. Sky would need to raise at least $100M to clear the bonds for it to make any kind of sense. So, say a 1:1 discounted issue @25c/share raises ~ $109M.

Assuming they did not want to be diluted by half, NZRU would need to pony up ~$5.5M.

RugbyPass Investors LLC would need to pony up ~$6.3M.

I doubt very much either of those two major investors are in a position to come up with that kind of dough. And I do not think they would be very happy either with their holdings being diluted so savagely. Time will tell if I am wrong, but I will admit now that it would shock me and come as an unpleasant surprise.

Given the cheap money available, I still think a better approach is to review the funding structure to borrow more money on more favourable terms. Clearly Sky need more money to fund their ambitions, it's just a matter of how and with who.

Current debt accounts for ~27% of Revenue. When you look at NETFLIX, their borrowings account for more like 75% of Revenue. Now, I am not suggesting we should borrow like crazy in the way that NETFLIX has...but I think Sky can comfortably increase borrowing capacity whilst still being financially prudent. If that can't be achieved by issuing new bonds and/or negotiating better terms with The Australian banks, then look further abroad. In this climate I don't think it would be too difficult at all to find large financial institutions willing to loan money. And we wouldn't be paying a 6.25% yield either like we are with the bonds issued in 2014.

I like your reasoning but markets are what markets are. Sky would have to pay a yield of 40% if they were going to borrow the money. Why invest in SKY debt at lower yield when you can get 40% in the market currently? (ok they have been trading on low volumes but if SKY tried to borrow at 6.25% they would be laughed out of the room) I like your optimism and share your enthusiasm about SKY as I too am a shareholder but I have been in this game long enough to know that markets are more often right than wrong. If SKY were going to borrow, they would have to have a pretty compelling case and I am not sure it gets over the line under current metrics. Lets hope that markets have this one wrong.

[mistaTea]

I like your reasoning but markets are what markets are. Sky would have to pay a yield of 40% if they were going to borrow the money. Why invest in SKY debt at lower yield when you can get 40% in the market currently? (ok they have been trading on low volumes but if SKY tried to borrow at 6.25% they would be laughed out of the room) I like your optimism and share your enthusiasm about SKY as I too am a shareholder but I have been in this game long enough to know that markets are more often right than wrong. If SKY were going to borrow, they would have to have a pretty compelling case and I am not sure it gets over the line under current metrics. Lets hope that markets have this one wrong.

I think the current 40% yield is not that much of an issue - as you say volumes are incredibly low. So though on the surface the 40% looks great, in reality you cannot buy meaningful amounts of the bonds as an investment (at that yield anyway). Before the recent fear and accompanying spike up to 80%, I think they were trading at a yield of 3.5% or less.

The bigger challenge for Sky in terms of restructuring borrowings will be the low market capitalisation. Even though the ability to borrow should ideally be based on underlying earning power, future prospect etc... Market Cap is a variable that fits into the lending equation.

The other reference point is GAAP earnings, which we know is usually ~$50M less than underlying earnings due to the large depreciation cost they are able to charge. Not including one-off large charges like acquisition costs and Goodwill write downs, of course.

I tend to agree that 'the market' is usually right in the long run. I think Ben Graham stated that in the short-medium term it is a voting machine, but in the long term it is a weighing machine.

[winner69]

I think the current 40% yield is not that much of an issue - as you say volumes are incredibly low. So though on the surface the 40% looks great, in reality you cannot buy meaningful amounts of the bonds as an investment (at that yield anyway). Before the recent fear and accompanying spike up to 80%, I think they were trading at a yield of 3.5% or less.

The bigger challenge for Sky in terms of restructuring borrowings will be the low market capitalisation. Even though the ability to borrow should ideally be based on underlying earning power, future prospect etc... Market Cap is a variable that fits into the lending equation.

The other reference point is GAAP earnings, which we know is usually ~$50M less than underlying earnings due to the large depreciation cost they are able to charge. Not including one-off large charges like acquisition costs and Goodwill write downs, of course.

I tend to agree that 'the market' is usually right in the long run. I think Ben Graham stated that in the short-medium term it is a voting machine, but in the long term it is a weighing machine.

Maybe the market has given up voting and weighed everything up and the scales read what SKY is really only worth what it is today.

[mistaTea]

Maybe the market has given up voting and weighed everything up and the scales read what SKY is really only worth what it is today.

That is a possibility.

I suppose it would mean that very recently the market was ‘wrong’ @19c though and we can be much more confident now @28c that the market is definitely ‘right’.

Before COVID the price was up around 70c. Christ Almighty, the market couldn’t have been more wrong back then! Sky TV was much more of a piece of sh1t than the market gave it credit for until, fortunately, we were hit my a global pandemic which hasn’t really affected Sky’s earnings - but at least gave the market a wake up call to finally look properly and get the value ‘right’.

In fact, if you were to look at the Market Value of Sky TV over the last 2 years, you would have to say that the market has got it wrong at every turn.

The underlying 'story' for the business has not really changed much over this short period...in fact, Sky have returned to positive subscriber growth sooner than anticipated. Underlying Earnings are falling roughly at the rate assumed due to satellite sub losses, increased content costs etc. Meanwhile management are making the investments in streaming that they said they would.

Yet if you looked at what Mr Market has had to say over the last 2 years, and view the market's assessment as the true value of Sky...well then:

- The Market was wrong @ $2.80
- The Market was wrong @ $2.00
- The Market was wrong @ $1.50
- The Market was wrong @ $1.10
- The Market was wrong @ 85c
- The Market was wrong when it bounced back to $1.10 three days later
- The Market was wrong @70c
- The Market was wrong @30c
- The Market was wrong @ 19c
- But we should definitely believe the market has it 'about right' @28c?

With a company at the early stages of a transformation program like Sky TV, I personally find it hard to glean anything meaningful from the market gyrations in terms of intrinsic value.

[Ogg]

Looks like Nine Network is asking for a discount on the shorten NRL season.

https://www.smh.com.au/sport/nrl/nrl-braces-for-60m-shortfall-as-broadcasters-eye-discount-20200429-p54oe5.html (https://www.smh.com.au/sport/nrl/nrl-braces-for-60m-shortfall-as-broadcasters-eye-discount-20200429-p54oe5.html)

Will Sky ask for compensation too?

[mistaTea]

Looks like Nine Network is asking for a discount on the shorten NRL season.

https://www.smh.com.au/sport/nrl/nrl-braces-for-60m-shortfall-as-broadcasters-eye-discount-20200429-p54oe5.html (https://www.smh.com.au/sport/nrl/nrl-braces-for-60m-shortfall-as-broadcasters-eye-discount-20200429-p54oe5.html)

Will Sky ask for compensation too?

Will be interesting to see what Sky do here. I believe they are well within their rights to withhold some of the payment.

But is that the smart thing to do? Depending on how this plays out Sky may have no choice but to reduce the payment.

Alternatively they could keep making the full payments but look for some other kind of long term benefit - like a guarantee of renewal on more favourable terms.

We scratch your back, now you scratch ours.

I would prefer the latter if it is possible.

[Entrep]

That is a possibility.

I suppose it would mean that very recently the market was ‘wrong’ @19c though and we can be much more confident now @28c that the market is definitely ‘right’.

Before COVID the price was up around 70c. Christ Almighty, the market couldn’t have been more wrong back then! Sky TV was much more of a piece of sh1t than the market gave it credit for until, fortunately, we were hit my a global pandemic which hasn’t really affected Sky’s earnings - but at least gave the market a wake up call to finally look properly and get the value ‘right’.

In fact, if you were to look at the Market Value of Sky TV over the last 2 years, you would have to say that the market has got it wrong at every turn.

The underlying 'story' for the business has not really changed much over this short period...in fact, Sky have returned to positive subscriber growth sooner than anticipated. Underlying Earnings are falling roughly at the rate assumed due to satellite sub losses, increased content costs etc. Meanwhile management are making the investments in streaming that they said they would.

Yet if you looked at what Mr Market has had to say over the last 2 years, and view the market's assessment as the true value of Sky...well then:

- The Market was wrong @ $2.80
- The Market was wrong @ $2.00
- The Market was wrong @ $1.50
- The Market was wrong @ $1.10
- The Market was wrong @ 85c
- The Market was wrong when it bounced back to $1.10 three days later
- The Market was wrong @70c
- The Market was wrong @30c
- The Market was wrong @ 19c
- But we should definitely believe the market has it 'about right' @28c?

With a company at the early stages of a transformation program like Sky TV, I personally find it hard to glean anything meaningful from the market gyrations in terms of intrinsic value.

Are you saying that because the price changes at all - even 1c - the market is wrong? Not to mention there are 3rd party, macro,virus, actions of Sky themselves that no one can know. The market reacts to all that when it processes it and the trend is clearly down.

[mistaTea]

Are you saying that because the price changes at all - even 1c - the market is wrong?

I don’t believe I said that at all.

The ‘market’ is able to react to all sorts of things that nobody can know?!

Amazing 😍

[Entrep]

I don’t believe I said that at all.

The ‘market’ is able to react to all sorts of things that nobody can know?!

Amazing ��
Your misquote of me is actually what you said. Amazing indeed!

[mistaTea]

Not to mention there are 3rd party, macro,virus, actions of Sky themselves that no one can know. The market reacts to all that when it processes it and the trend is clearly down.

Where did I misquote you chief? I’m not sure how the market reacts to things “that no one can know”. That is amazing to me.

The first part of my response to you was about whether or not I think movements in share prices of even 1c mean that I think the market is always ‘wrong’. I never said that at all.

[Ogg]

https://www.fijitimes.com/nrl-braces-for-60m-shortfall-as-broadcasters-eye-discount/


Nine was due to pay A$118 million (NZ$126 million) in 2020 for the broadcast rights, although the network has now indicated to ARLC chairman Peter V’landys that it wants to pay only about A$90 million (NZ$96 million). V’landys, who has already persuaded a reluctant Nine into accepting the May 28 start date, may argue for a less substantial discount.


Media sources say Foxtel, which was due to pay about A$190 million (NZ$203.5 million) this year, is willing to only deduct the value of the four rounds lost at a saving of about A$30 million (NZ$32 million).

[steveb]

You could say that the rights are going to be worth more than pre-covid,given that there will be no spectators allowed and the absence of any other sport on TV.

[moimoi]

""In fact, if you were to look at the Market Value of Sky TV over the last 2 years, you would have to say that the market has got it wrong at every turn.""

Mr.T,

Have you got some method of selling your shares off market @ your assessment of "intrinsic value".?

If you do could you let the rest of us in on the secret? :drool:

Price is Truth and most of us are dealing with "the market price". :))

[mistaTea]

Price is Truth and most of us are dealing with "the market price". :))

I think that price becomes the truth to the existing shareholder when he sells. Until then, price is largely meaningless in my view.

Price is definitely 'the truth' at all times if you are a speculator - Efficient Market Theory applies because all that matters is price at any given point in time.

Price can also become 'the truth' very quickly to a value investor if he does not hold enough cash reserves to look after his day to day and gets caught out. If he needed to sell shares when they are low relative to his estimate of intrinsic value because he needed to settle a tax bill, for example, then the price becomes very real very quickly.

Beyond that I simply make the point that price at any given point in time is largely meaningless to the long term business owner. Assuming the low price does not attract an unwanted takeover that succeeds, all the business owner cares about is how the business is performing.
In that light my previous posts attempt to point out what I perceive to be strange market behaviour.

The quoted value of the business has fallen by 90% over the last 2 years. In that time, though the exact same challenges persist today, the business has made a lot of improvements. But apparently the market was 'wrong' back then because the quoted value has fallen so steeply despite the significant improvements.
Even more recently when the quoted value of the business was 70c (implied business value of ~$305M), those who were buying at that price must have been 'wrong' because virtually overnight the SP fell to 19c (implied business value of only ~$83M) based of speculation around sport subs I suppose, even though if anything most customers would be reluctant to fully cancel their subs given we were going to be in lockdown.

To suggest that the business was worth ~$222M less overnight is divorced from reality. The drop was purely speculative.

Ahh sweet Jesus, I just ended up writing another "I have a Dream" speech didn't I? :eek2:

[garfy]

You keep having your 'dreams' mistaTea! I enjoy and value your correspondence.

I am a SKY watcher. I do not watch a lot of TV but when I do SKY has really all I need. I have no wish to sit in front of a TV for hours Netflix, Disney, et al.

And also very important to me is the fact that SKY is a NZ company, not from the country with the 'wannabe' dictator.

Yes, I am a SKY shareholder.

[Jay]

It s a shame you cannot get it all in one place, hang on you use to be able it was called Sky TV I think.:)
Don't watch loads of TV or binge watch etc etc and only have sky as well - apart from Spark Sport for WRC & FI in the main
Hearing some colleagues talk, it sounds as though they spend from waking point to going to sleep watching this series that series on NetFlix etc especially during the weekend and they say or you should watch this series or that series its really good, don't think my life is any the worse for not watching it!
Though they would probably say I watch a lot of drivel, but I'm not looking for anything intellectual, thought provoking etc in the main when watching, just some down time that is entertaining like some of the British comedy dressed up as a quiz show!

[Ogg]

It s a shame you cannot get it all in one place,

Seems like you can get it all in one with SKY UK.

https://www.sky.com/shop/tv/sky-q/

I don't know why SKY NZ doesn't go into the broadband market and the update their sky boxes.

[mistaTea]

Seems like you can get it all in one with SKY UK.

https://www.sky.com/shop/tv/sky-q/

I don't know why SKY NZ doesn't go into the broadband market and the update their sky boxes.

They are weighing up costs/benefits of joining broadband etc versus partnerships.

You can already bundle broadband and Sky TV - with Vodafone TV. I think their pricing could be sharper, but customers can get a Sky bundle without MySky fee and an extra $10 discount. All streamed, no satellite dish required - so great for those with fast internet.

So continuing to leverage this partnership and forming new ones is one potential path forward.

If they were to enter the broadband market directly...

Do you think they should borrow money to purchase an existing player (Vocus has been for sale on and off for a while...) or just go it alone as a brand new provider?

[Ogg]

If they were to enter the broadband market directly...

Do you think they should borrow money to purchase an existing player (Vocus has been for sale on and off for a while...) or just go it alone as a brand new provider?

Just do it alone over long period of time.

Better yet, do the Vodafone merger, and argue to the Commerce Commission that there has been a material change to the circumstances.

[mistaTea]

Just do it alone over long period of time.

Better yet, do the Vodafone merger, and argue to the Commerce Commission that there has been a material change to the circumstances.

Agree that the Voda-Sky merger makes even more sense now than ever before.

But another attempt would predictably be protested by the other telcos...it should get through this time (one would think) but not sure if Infratil would be keen to go through the whole process. No guarantees!

A merged telco + content aggregator service company could offer even better pricing.

https://www.vodafone.co.nz/tv/vodafone-tv-broadband-package/

As it stands, if you have mobile with Vodafone you get an extra $10/month off your Vodafone TV sub.

So even if you subscribed to the 'Premium' option you can get all Sky TV channels + UFB for $186.66 per month (about $6 a day - which aint too bad).

If you just want Sky's entertainment offering it is more like $4.75 a day all in. And if you just want their Sport package then your combined internet + sports cost is about $4.80 per day.

The merger had so much potential, and consumers would have absolutely been better off compared to the current situation. With alternative entertainment options such as Netflix, Amazon Prime etc it was unlikely that Voda-Sky would have ever been able to price gouge.

I think the big blocker for the Comcom was the 'sport monopoly'. Well, Spark sure played them for fools!

[Ogg]

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12328874

Rushing to get Rugby competition underway this year.

[mistaTea]

https://www.nbr.co.nz/story/government-decision-new-foreign-investment-rules-expected-within-weeks

New rules coming in soon to make foreigners trying to buy NZ companies demonstrate how it is in the 'national interest'.

That might help Sky avoid any unwanted foreign takeover advances while the SP is in the toilet.

[Ogg]

https://www.nbr.co.nz/story/government-decision-new-foreign-investment-rules-expected-within-weeks

New rules coming in soon to make foreigners trying to buy NZ companies demonstrate how it is in the 'national interest'.

That might help Sky avoid any unwanted foreign takeover advances while the SP is in the toilet.

Sounds like bad news to me

[mistaTea]

Sounds like bad news to me

Not sure - it sounds like Australia already have this test.

Like all things, the devil will be in the detail - so we shall have to wait and see.

Obviously, if the net effect was that no foreign entity could ever buy a NZ business in practice then I agree that it would be negative.

If the extra test still allows for foreign investment, but does reduce the amount of good NZ businesses being so easily 'picked off' by deep-pocketed foreigners when they hit a rough spot and their SP dives then it could be positive.

Let's watch this space.

[mistaTea]

https://www.nowtv.com/smart-tv-stick

Interesting - Sky TV UK's SVOD service (NOW TV) offers a type of 'Fire Stick' so that their customers can have one portal to view Sky's content as well as competitors such as Disney+ and Netflix.

Old demo/review...they have since added other apps it seems...but gives an idea of how it works.

https://www.youtube.com/watch?v=VBrFsKDKTTo

Ideally you want to get to a point where you have deals with the likes of Netflix etc whereby you can actually aggregate their content with the rest of yours in one handy UI (as opposed to having to navigate to each app).

I don't know enough about App software to say whether this could be achieved easily with an application. You probably need some additional hardware with a bigger 'brain' to be able to achieve that I imagine.

Any developers on this forum who can shed any insights?

A future generation of Vodafone TV might be able to achieve that. Not sure if the Roku Now TV stick could ever do it.

[mistaTea]

https://www.theguardian.com/business/2020/may/01/virgin-and-o2-plan-merger-to-challenge-sky-and-bt

Merger on the other side of the world to try and take on Sky.

[Ogg]

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12329089


The Warriors have finally gotten the green light from the Australian government to fly across the Tasman in time for the resumption of the NRL season.

Looks like sport is restarting in May.

[mistaTea]

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.

After looking through the various reviews of the latest generation of Vodafone TV - they all seem to be overwhelmingly positive.

I pulled the trigger and purchased one - currently down to $129 on PBTech. You can also get it for $149 from Noel Leeming and get 4 months of Lightbox thrown in. As I get Lightbox as part of my Spark fibre plan, it was no use to me so I just went for the cheapest price for the STB.

Anyway, you might want to consider this Blackcap...works pretty much how your lady is used to on MySky, plus you guys can have all your apps on one platform.

You could subscribe to all of the channels you currently have and only pay $83/month instead of $98/month.

$83 per month works our to only $2.73 per day. Not bad really. Half a cup of decent coffee in Auckland if you're lucky!

[bull....]

Foxtel was struggling to survive before COVID-19 but the lack of sport is speeding up its demise
https://www.abc.net.au/news/2020-05-06/foxtel-struggling-before-covid-19-lack-of-sport-more-pain/12217094?section=business

[blackcap]

After looking through the various reviews of the latest generation of Vodafone TV - they all seem to be overwhelmingly positive.

I pulled the trigger and purchased one - currently down to $129 on PBTech. You can also get it for $149 from Noel Leeming and get 4 months of Lightbox thrown in. As I get Lightbox as part of my Spark fibre plan, it was no use to me so I just went for the cheapest price for the STB.

Anyway, you might want to consider this Blackcap...works pretty much how your lady is used to on MySky, plus you guys can have all your apps on one platform.

You could subscribe to all of the channels you currently have and only pay $83/month instead of $98/month.

$83 per month works our to only $2.73 per day. Not bad really. Half a cup of decent coffee in Auckland if you're lucky!

Thanks MT, I will look into it. But we did have a Vodafone thing about 5 years ago and from memory it was very clunky and very slow to respond to the remote. Agonisingly slow and the hard drive did not have much storage on it. But like I said, 5 years ago so things may have progressed since then.

[winner69]

Thought of SKT the other day

Was watching the Sydney races. One of original Mr Sky guys Terry Jarvis owned one of the horses in conjunction with John Key

It ran last

[winner69]

Does Sky still own that outside broadcast unit?

[mistaTea]

Does Sky still own that outside broadcast unit?

Yes Sky does still own OSB.

Last announcement was in December 2019 when they confirmed that they were considering whether or not it still made sense to own the business: https://www.nzx.com/announcements/345239

No more announcements regarding OSB since then.

They purchased OSB back in 2010 for $13.5M. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SKT/197140/122520.pdf

Not sure what NEP would pay in 2020 to become a monopoly in NZ.

[mistaTea]

Foxtel just signed a new deal with WarnerBros. So all that HBO content locked in even though HBO max is being released in the USA later this month.

[moimoi]

The Biff and Ruggers coming back.....(sans people in Stands)

But no reaction from the market.....

Cord cutting from content aggregators as the most meaningful valuation thematic continues.?

[mistaTea]

The Biff and Ruggers coming back.....(sans people in Stands)

But no reaction from the market.....

Cord cutting from content aggregators as the most meaningful valuation thematic continues.?

That, and analysts tend to put a lot of weight on GAAP earnings.

GAAP earnings are fine as a generic measurement but almost useless/meaningless when it comes to Sky TV.

[RRR]

This comment from a publisher..

Sky shareholders also responded moderately positively to the news, sending the company’s shares 1.69% higher to 30c, but still almost 76% lower than how they started the year.

Wow..pun intended

Discl - invested

[blackcap]

That, and analysts tend to put a lot of weight on GAAP earnings.

GAAP earnings are fine as a generic measurement but almost useless/meaningless when it comes to Sky TV.

Looks like I was wrong and you were right about sport returning under level 2. Good call. Lets hope that SKY will attract some new customers as you will not be able to go to your local to watch the AB's. (well you will but there will only be a few and you must be seated with spacing)

[mistaTea]

Looks like I was wrong and you were right about sport returning under level 2. Good call. Lets hope that SKY will attract some new customers as you will not be able to go to your local to watch the AB's. (well you will but there will only be a few and you must be seated with spacing)

Yeah with limited pub capacity one would think that would lead to an increase in residential sport subs. As it will be some time before we are totally 'back to normal' I would expect the satellite churn rate to drop somewhat, as well as see an increase in Lightbox + NEON subs.

Commercial revenue will be down. I assume Sky has put a hold on the Sport subs for pubs and bars etc for at least two months since they have all been shut.

Some establishments won't open again, and for the others that do open - they will have reduced patronage until our Benevolent Dictators ease restrictions more. I am sure that Sky will do the right thing and reduce their fees based on the lower expected patronage.
It means less revenue of course, but it is the right thing to do.

Overall revenue has no doubt taken a hit - advertising will be down too. We know that the hit has not been as high as >=30% from the same time last year as Sky have not applied for the wage subsidy.

The question is, has the expected drop in churn for residential satellite and increase in SVOD subs made up for the drop in commercial +advertising revenue. Not completely, but I think we will be pleasantly surprised at how well the business has done considering the crisis.

Just got a message from the courier...my Vodafone TV will arrive shortly. Can't wait to set it up...Sky will be getting a few more bob out of me this month as I add some of their bundles!

[youngatheart]

Wow. Could be a good opening on Monday if it's expected that we get to level 2 very soon - and thus sports is on the cards again.
There's quite a late flurry of buying going on right now!

[klid]

Hmm I am waiting for this Neon / Lightbox merge. Meant to be "mid year".

[k14]

Just got a message from the courier...my Vodafone TV will arrive shortly. Can't wait to set it up...Sky will be getting a few more bob out of me this month as I add some of their bundles!
Yeah I am considering buying the same. Fibre just been laid in my street this week and am pretty sure I will get a Vodafone TV with Sky Sport sub in the next few months. Really annoyed me paying $15 a month for mysky box when it was such outdated tech. $58 a month for sky with the replay features of the VTV look pretty good from my point of view.

Pretty happy with my SKT purchase. Up 17% so far :)

[mistaTea]

Yeah I am considering buying the same. Fibre just been laid in my street this week and am pretty sure I will get a Vodafone TV with Sky Sport sub in the next few months. Really annoyed me paying $15 a month for mysky box when it was such outdated tech. $58 a month for sky with the replay features of the VTV look pretty good from my point of view.

my VTV box arrived today.

I have to say, I am very impressed. In 2018 I battled with the Gen1 VTV for a year as part of a broadband deal with Vodafone. It was really a Beta version of their product and it had some serious drawbacks.

So after my 12 months I handed it back, and switched ISPs.

Anyway, the Gen2 box is very good. The UI seems a lot more responsive, and having NEON, Lightbox, Netflix on the one platform is very good. The apps load fast, and each one has worked well so far.

I signed up for Starter + Entertainment + Sport. They threw in SOHO for free...so all in I am paying $83/month. Only $2.72 per day all in - I consider that great value for the amount of content I get.

If you are currently a Sky satellite customer and are paying full price (i.e. not on a special limited time deal)...and if you have fibre...I would seriously look at cancelling my Sky and switching over to Vodafone TV. It works out cheaper per month and the system is a lot more user friendly that MySky. You do not have to be a Vodafone broadband customer anymore either...you can buy the set top box standalone and stream with any ISP.

You can record, series link just like MySky...but if you forget to record something there is a 3 Day catch up feature which is fantastic. Browsing the VTV On Demand catalogue is much easier than MySky. The vast majority of content can now be recorded (when they released Gen 1 there were loads of things like History Channel etc they they did not yet have commercial arrangements with to allow recording. That seems to have been resolved now).

And no, I do not own any shares in Infratil (and therefore Vodafone NZ) before someone trolls me. I am genuinely impressed with the latest iteration of their product, and if others can save money on their Sky sub for a better platform...then I am happy to help.

[mistaTea]

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12330421

Interesting development.

CVC Partners were on my list of potential buyers for Sky TV.

On a separate note - I also read that there has been very low uptake so far for the Government-backed business loans. Of the $6.2B available only $23M has been borrowed.

Well, Sky TV could help out with that!

[Benny1]

my VTV box arrived today.

I have to say, I am very impressed. In 2018 I battled with the Gen1 VTV for a year as part of a broadband deal with Vodafone. It was really a Beta version of their product and it had some serious drawbacks.

So after my 12 months I handed it back, and switched ISPs.

Anyway, the Gen2 box is very good. The UI seems a lot more responsive, and having NEON, Lightbox, Netflix on the one platform is very good. The apps load fast, and each one has worked well so far.

I signed up for Starter + Entertainment + Sport. They threw in SOHO for free...so all in I am paying $83/month. Only $2.72 per day all in - I consider that great value for the amount of content I get.

If you are currently a Sky satellite customer and are paying full price (i.e. not on a special limited time deal)...and if you have fibre...I would seriously look at cancelling my Sky and switching over to Vodafone TV. It works out cheaper per month and the system is a lot more user friendly that MySky. You do not have to be a Vodafone broadband customer anymore either...you can buy the set top box standalone and stream with any ISP.

You can record, series link just like MySky...but if you forget to record something there is a 3 Day catch up feature which is fantastic. Browsing the VTV On Demand catalogue is much easier than MySky. The vast majority of content can now be recorded (when they released Gen 1 there were loads of things like History Channel etc they they did not yet have commercial arrangements with to allow recording. That seems to have been resolved now).

And no, I do not own any shares in Infratil (and therefore Vodafone NZ) before someone trolls me. I am genuinely impressed with the latest iteration of their product, and if others can save money on their Sky sub for a better platform...then I am happy to help.
Hey thanks for the info on VTV..
Have looked a couple of times in the past but not too closely.. Just on the recording and storing of programs.. It says you get 500hrs of cloud storage but do you know how long the recordings actually stay before being deleted?
Cheers

[mistaTea]

Hey thanks for the info on VTV..
Have looked a couple of times in the past but not too closely.. Just on the recording and storing of programs.. It says you get 500hrs of cloud storage but do you know how long the recordings actually stay before being deleted?
Cheers

I believe the recordings stay indefinitely (so long as sky or TVNZ etc hold the contracts to show the content).

Your recordings only start dropping off once you hit max capacity - 500 hours. So there is no time limit as such whereby content you have recorded is removed.

Also meant to say that the new VTV has a very good visual fast forward. Works fantastically well. The gen1 box did not have this and it was damn frustrating. You had to guess how long the ads might be and then stop and then have to rewind a bit if you overshot it etc. Was a big drawback at the time compared to MySky - but that’s all sorted now.

VTV also supports 4K now - gen1 was only HD. So if you subscribe to Netflix 4K plan you are still covered.

It’s one of the cheapest set top boxes you can purchase on the market, is incredibly user friendly - and much more suited to the NZ market given it houses all the apps most people use AND has the Sky TV component. The more Sky TV content you subscribe to, the more powerful the TV Guide feature becomes.

It further highlights to me why Martin ditched the infinite video platform. Why bother making that kind of investment when one of your close commercial partners has nailed it with their offering?

[airedale]

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12330421


Interesting development.

CVC Partners were on my list of potential buyers for Sky TV.

On a separate note - I also read that there has been very low uptake so far for the Government-backed business loans. Of the $6.2B available only $23M has been borrowed.

Well, Sky TV could help out with that!

That may explain the increase in volume and a slight rise in the SP on Friday.

[bull....]

Foxtel loses customers during COVID-19

On March 31, it had 408,000 paying subscribers to its Kayo Sports streaming service.
By May 2, with all major sports shut down, that number had shrunk to just 272,000.

https://www.abc.net.au/news/2020-05-10/coronavirus-challenges-may-force-foxtel-murdoch-to-rethink-model/12231094?section=business

[mistaTea]

Foxtel loses customers during COVID-19

On March 31, it had 408,000 paying subscribers to its Kayo Sports streaming service.
By May 2, with all major sports shut down, that number had shrunk to just 272,000.

https://www.abc.net.au/news/2020-05-10/coronavirus-challenges-may-force-foxtel-murdoch-to-rethink-model/12231094?section=business

No real surprise there. Same kind of thing will have happened to Sky Sport NOW.

If you subscribe to a single purpose platform - sport in this case - yet there is no live sport, of course you will cancel.

But those subscribers will come back as things start to pick up again.

Sky didn’t have that many sky sport now subs though so the affect won’t be as dramatic. Most sports subs are satellite - and I think Sky has been able to keep the majority of those paying their sport subs by giving free movies etc for a few months.

[flyer]

On the move

[Ogg]

On the move

Still cheap.

Sport resuming soon.

New streaming platform being launched.

Intrinsic value $1.

[macduffy]

Still cheap.

Sport resuming soon.

New streaming platform being launched.

Intrinsic value $1.

For me, professional sport without spectators is only half a game. I won't be renewing just yet.

[winner69]

On the move

No ..it's flying high

[mistaTea]

For me, professional sport without spectators is only half a game. I won't be renewing just yet.

Fair enough - it definitely isn't quite the same without a live audience, but I think most sports fans will tune in to watch as it has been so long without live sport. I for one am eagerly anticipating the local Super Rugby competition.

The new competition will kick off on June 13. Not far away at all!

https://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=12331110

[mistaTea]

Still cheap.

Agreed.


Intrinsic value $1.

Do you mind sharing how you calculated that?

[klid]

Do you mind sharing how you calculated that?
Probably Morningstar's one heh

[Dlownz]

Probably Morningstar's one heh
If you want my 2 cents. I'd say sky's worth arpund 70 cents but I guess we won't know how they are fairing till there next result.
Yes I now hold shares in sky.

[Dlownz]

And selling depth has really dried up after that long intrenchment in the 28 to 32cent mark. So there's room to climb unless someone decides to offload

[Ogg]

Probably Morningstar's one heh

Yep. Fairly conservative.

Closed at 39.5 on the ASX.

[Ogg]

If you want my 2 cents. I'd say sky's worth arpund 70 cents but I guess we won't know how they are fairing till there next result.
Yes I now hold shares in sky.

I'd say 70c is a fair price. The stock should be trading around that level now. Maybe $1 for a take over.

If they can finish their transformation from a traditional terrestrial TV play to a diversified media company (streaming/on-demand/broadband/rugbypass etc) then $3 is fair long term value.

These bargain prices won't last. Was ridiculous it got down this low. This old horse ain't done yet.

[mistaTea]

Probably Morningstar's one heh

LOL! You mean the ‘valuation’ that keeps falling each time the SP falls and not because anything has actually changed business or strategy wise from the previous ‘valuation’?

Heaven help us.

[youngatheart]

The speed with which this share price is taking off is just ridiculous!

[bull....]

neon service subscriptions were well up ie netflix numbers as a comparison

[Ogg]

The speed with which this share price is taking off is just ridiculous!

The drop down was just as ridiculous

[sb9]

The speed with which this share price is taking off is just ridiculous!

What's the saying that goes like, "amateurs start the game, professionals finish the game".

[mistaTea]

Damn near 2M shares traded already.

[winner69]

The drop down was just as ridiculous

Ridiculous is good eh

[Dlownz]

Quite incredible day on the sky share front. Almost back to where the day started. Lots of profit taking.

[klid]

Profit taking? Could be the big holders reducing even more as they have been, given that it was difficult to offload recently. (See recent SPH notices).

[mistaTea]

I see there was another NZX price enquiry. With the same one sentence reply from Blair. Ha!

Very strange day indeed.

[Ogg]

Profit taking? Could be the big holders reducing even more as they have been, given that it was difficult to offload recently. (See recent SPH notices).

It looked like the usual low volume sell off at the end of the day, but then the price enquiry came and caused a liquidity spike which messed with the price discovery.

On the ASX it normally triggers automatically or at least with minimal delay. On the NZX it doesn't happen as much so they were probably half asleep and sent a fax after lunch. They likely didn't get a response until 4 but by then it's pretty much old news.

It also doesn't help that the NZX platform is totally bogged at the moment. Then you got UBS chucking in all sort of derivative contracts, the system slows, then they wonder where all the buyers have gone. It takes retail a good 15 mins to get orders on to the market. Once the price breaks, people get spooked and pull orders.

Just look at the spread at the end of the day 37-43, just lol

VWAP was 0.455 just before the announcement, but closes at 37. Go figure.

[mistaTea]

I see Nine just sold Stuff Fibre to Vocus.

I wonder why Nine didn’t have a go at buying Sky, then merge Stuff under the Sky brand. Then Sky would do broadband, entertainment and news like their UK counterpart. A triple play, of sorts.

Instead it sounds like they sold Stuff Fibre for a modest sum and are still trying to dump the newspaper.

If they purchased Sky they would have had ~900,000 customers to market their broadband offering too.

[sb9]

Cap raise at $0.12c a share :eek2:....

[blackcap]

Like I thought a while ago but did not think it would be this bad..

$157m at $0.12 per share.

2.83 shares for every 1 owned. They must be in deed deep poo for this to eventuate.

https://www.nzx.com/announcements/353469

[silverblizzard888]

Ouch, who did the numbers on this one. 12 cent raising when the share price is 33 cents? They could have raised at 20 cents and it would have made more sense. 12 cents is a guarantee way to ripe out the hearts of current shareholders just to pay debt with no added value.

[bull....]

12c lol desparate obviously no one wanted to touch it going by the only 9m institutional raised. wonder why lol

would have to work out if you are throwing good money after bad i guess.

[Entrep]

$9m insto raise is tiny. 12c per share. One helluva case study.

[Stranger_Danger]

Looks like a "Quick guys! We have to do this NOW before the new lockdown share speculators go back to work and the buy side vanishes" capital raise.

Air NZ next?

[winner69]

Sky's future looking very bright

Lots of optimism from them