The CMA has said plurality concerns would “fall away” if Disney bids directly for Sky. However, Disney’s hands are tied because of its merger agreement, although it would have a say if Fox wanted to increase its offer for Sky.
Comcast has a potentially easier path if it needs only the approval of Brussels on competition grounds. There don’t look to be plurality issues in the UK, where Comcast has few interests. It could be a “clean” deal for Sky’s shareholders, instead of the complexities of Fox-Disney, and Comcast only needs 50% plus one share to take control.
Some speculate that Comcast might be more palatable for Theresa May’s fragile Government because it would avoid the Murdoch issue. Still, we can be sure there will be plenty of digging into Comcast’s own past and broadcasting standards in the months ahead.
Comcast’s pre-application to Brussels should take six to eight weeks, and 25 days for approval — by which time it would be June, roughly when Hancock decides on Fox.
Then Fox (presumably with Disney’s support) must decide whether to submit a higher offer.
The final reckoning may happen in America, not London. Brian Wieser, an analyst at the US firm Pivotal Research, points out that Disney and Comcast have “so many competing, converging interests” that they won’t look at Sky in isolation.
They could agree a trade-off given both are shareholders in US streaming service Hulu, or Comcast could look for better terms for Disney’s channels such as ESPN. Ultimately, the reason why first Fox, then Disney and now Comcast have tried to buy Sky is because these content companies need scale and are desperate for direct-to-the-consumer distribution like the FANGs.
Sky has 23 million paying subscribers in the UK, Germany and Italy, plus a track record of innovation in set-top box technology such as Sky Q, online streaming with Now TV and targeted advertising. There is no other pay-TV business of a scale to buy in Europe.
Some doubters think Murdoch is selling at the right time because the pay-TV model is “disintegrating” as viewers migrate to streaming at a third or a quarter of the price.
But Sky’s recent history of unbroken revenue growth and ability to see off BT and others suggests it is resilient. Cut-price Now TV is also growing and a buffer against Netflix.
The chatter at Sky is that staff would be equally happy with Disney or Comcast as an owner.
Expect further plot twists in this saga. What, for example, is James Murdoch, Sky’s chairman, doing when his father is selling off the family’s TV jewels?
