SKT Sky Network Television Limited.

[mistaTea]

Spinoff claims that the HBO deal ends next year.

Sky statement in response that it has other content is very “weak sauce”:

Yes, HBO has some terrific shows, but Sky is a curator of fantastic entertainment, with over 530 different content partnerships in place to deliver premium content to our customers. Recent hits from studios other than HBO include The Handmaid’s Tale, Love Island, Yellowjackets and Yellowstone.”

You forgot the first bit of the quote, which is crucial.

In a statement, a spokesperson for Sky TV said: “Sky has deep, long term and multifaceted partnerships with both of the now merged entities. Our current deal with Warner Bros. Discovery gives us exclusive access to HBO content in New Zealand and there are plenty of conversations to be had before New Zealand’s future content deals are determined. Yes, HBO has some terrific shows, but Sky is a curator of fantastic entertainment, with over 530 different content partnerships in place to deliver premium content to our customers. Recent hits from studios other than HBO include The Handmaid’s Tale, Love Island, Yellowjackets and Yellowstone.”

Sky have a long standing and deep relationship with these guys - so it is a big call to assume that the outcome will definitely be that Sky is cut out of the equation altogether. I am not saying it is not possible, just pointing out that there is also a very good chance (if not a probability​) Sky maintain those relationships. As I say, WD-Disc would need to anticipate some pretty large sub numbers willing to pay them month in and month out to justify killing the sky deal.

Given we renewed an expanded exclusive HBO deal just last year, I would be surprised if it ended in 2024. Possible, but would surprise me.

[mistaTea]

Shareguy posted this on the other site:

Craigs BULLISH on sky. 50 cps cash back...wow
Insert from todays note

Overweight rating remains. Price Target $3.32 (prev. $3.20).
We retain our Overweight rating. Our 12-month target price has increased 4% and remains based on a one-year forward PE of 10x. We assume a FY22 35cps special dividend, along with a 15cps final dividend which provides a potential 50cps/20% return to shareholders within the next few months, and a hypothetical ex-dividend forward PE of 6.0x. We think FCF can support 22.5cps in ongoing dividends from FY23-FY26 at a 9.1% gross yield. This equates to 70% of our FCF forecast for the period vs. 50-80% payout policy. Key downside risks include: satellite churn, ARPU decline, cost of operational change & execution of technology path.

I would absolutely favour a divvy/special divvy combo and forget about the buyback.

They are assuming a total payout of ~$90M though.

Would be amazing if that transpired - and the Board will be under pressure to return cash. They are conservative in anture though, so it would need a number of instos to make it clear what they expect.

Dividend/Special divvy the fastest way to get cash returned at this junction. As at 30 June 2021 they had $161M worth of imputation credits available.

[sb9]

Shareguy posted this on the other site:



I would absolutely favour a divvy/special divvy combo and forget about the buyback.

They are assuming a total payout of ~$90M though.

Would be amazing if that transpired - and the Board will be under pressure to return cash. They are conservative in anture though, so it would need a number of instos to make it clear what they expect.

Dividend/Special divvy the fastest way to get cash returned at this junction. As at 30 June 2021 they had $161M worth of imputation credits available.

Dreams are free, doubt if it'll be of that size knowing fully well how SKT board acts especially under current Chair.

[mistaTea]

Dreams are free, doubt if it'll be of that size knowing fully well how SKT board acts especially under current Chair.

Yes, I tend to share that sentiment given the overly conservative practices in the past.

The only thing that gives the Craigs view merit, I think, is that Bowman and the team will be under some pressure now by long-suffering institutional owners (after the MW fiasco). I do believe that investor patience has run a bit thin now.

And a 50cps payout is $87M.

That would still leave Sky with $60M+ in the bank - plenty of cash to draw upon to continue investing in broadband/STB/OTT while maintaining a healthy dividend.

[sb9]

Yes, I tend to share that sentiment given the overly conservative practices in the past.

The only thing that gives the Craigs view merit, I think, is that Bowman and the team will be under some pressure now by long-suffering institutional owners (after the MW fiasco). I do believe that investor patience has run a bit thin now.

And a 50cps payout is $87M.

That would still leave Sky with $60M+ in the bank - plenty of cash to draw upon to continue investing in broadband/STB/OTT while maintaining a healthy dividend.

My best case pick is the payout to be max $50m, whichever method they may choose to pay that out.

[mistaTea]

My best case pick is the payout to be max $50m, whichever method they may choose to pay that out.

Well, let's hope for all our sakes that Craigs are the ones proven right in the end!

[sb9]

Well, let's hope for all our sakes that Craigs are the ones proven right in the end!

if that happens we can only leave it for wild imagination what would happen in mista household private room

[mistaTea]

My best case pick is the payout to be max $50m, whichever method they may choose to pay that out.

I actually figured a total payout of abou $80M:

• $35M divvy
• $15M special divvy
• $30M buyback

Craigs payout expectation is only a little above that, the big difference is they expect it ALL to be paid out by dividend.

And, I think they are right in that a divvy/special divvy at this junction is the fastest and most tax efficient method to return cash to shareholders.

It has also been noted that doing a share buyback so soon after such a dillutory capital raise (at a much lower price) might raise some eyebrows too.

[mistaTea]

if that happens we can only leave it for wild imagination what would happen in mista household private room

Oh, missusTea will get a good sort out don't you worry.

[Baa_Baa]

I actually figured a total payout of abou $80M:

• $35M divvy
• $15M special divvy
• $30M buyback

Craigs payout expectation is only a little above that, the big difference is they expect it ALL to be paid out by dividend.

And, I think they are right in that a divvy/special divvy at this junction is the fastest and most tax efficient method to return cash to shareholders.

It has also been noted that doing a share buyback so soon after such a dillutory capital raise (at a much lower price) might raise some eyebrows too.

And devalue the balance sheet by the amount of the payout and used imputation credits, hence market dumps the SP. Typically SP's drop after a dividend.