Comcast counters Murdoch's Sky bid with ‘firm superior cash offer’ as it reports Q1 earnings of $22.8bn
Comcast has made a $31bn bid for Sky and pledged an investment in the UK rivaling Rupert Murdoch’s offer it announced today (April 25) as it reported revenues of $22.8bn for the first quarter of the year, up 10.7%.
Comcast looks to a strong 2018, with potential for a purchase of UK's Sky, Olympics and Super Bowl wins, and a strong Q1.
The owner of NBCUniversal said the bid was a “firm superior cash offer” to what 21st Century Fox had earlier pledged via Rule 2.7, with the bid representing a 16% premium to the existing Murdoch offer, according to Comcast.
Back in February, the Philadelphia-based telecom provider filed a more informal announcement of interest — a Rule 2.4 announcement — with Brian L. Roberts, chairman and chief executive of Comcast describing Sky as “a great fit within Comcast” adding that its bid would aim to “build and grow the business.”
If the proposal is accepted, Comcast will add Sky’s 23 million retail customers to its own footprint and will expand its presence into the UK, Italy, and Germany. This is expected to total a customer base of approximately 52 million, said Roberts commenting on Sky’s “history of strong financial performance” further allowing Comcast to invest more in original and acquired programming.
He added: “Sky will be our platform for growth across Europe ... and more in innovation as we strive to deliver a truly differentiated customer experience. We look forward to receiving the necessary regulatory approvals.”
In today’s update, Comcast also announced a few more provisions to show its commitment in Sky, which included the maintenance of both its headquarters in Osterley for five years and the average expenditure in Sky News for the next ten years, and will establish an editorial board that it hoped will ensure Sky News’ independence for the next decade.
Comcast pledged to support Sky in four different manners: one, of the creative industries in the UK and an increased investment in UK film and TV production; two, of innovation in the UK by continuing to support Sky’s technology hub in Leeds; three, of young people in the UK by maintaining Sky’s Software Engineering Academy scheme; and four, Sky’s local community sports programs in the UK.
It came as Comcast revealed a net income increase of 21.2% year-on-year, with revenue for its cable offerings jumping 3.6% and NBCUniversal posting a revenue increase of 21.3%. Much of this increase is due to its coverage of both the Winter Olympics and the Super Bowl, the two events bringing in about $1.6bn in revenue.
Comcast has been busy in 2018 thus far, riding the wave of its profitable business and large subscriber base. As the media — and advertisers — have looked to find a streamlined way to reach and measure audiences across screens, Comcast's role as the country's largest cable provider has positioned itself in center of all conversations.
Last week (April 19), Comcast-owned NBCUniversal joined Fox, Turner, and Viacom in the OpenAP system, using their combined scale to help advertisers target viewers more effectively. This is on top of its bespoke CFlight metric, plus partnerships between itself, Charter and Cox, the number-two and three cable companies in the US.
As the 2018 Upfronts approach, Roberts also predicted a strong showing for NBCUniversal, discussing a pendulum swing that’s happening between a traditional linear broadcast and cable and digital.
He added: “There are certainly signs of a ‘coming home’ to a trusted environment, where an ad can be aired in context, where an ad can be watched in the ways people watch television, from beginning to end.”
Comcast's NBCUniversal will participate in The Drum’s Video Futures event hosted in New York City on May 8, to debate solving the measurement and attribution issues plaguing the industry. Representatives from Diageo, GroupM and Telaria. Attendance is free, click here to register