May 23, 2024

Comcast: Sky is closing in on the telecoms sector

Comcast is reorganizing its pay-TV business in Europe
Photo: Comcast

There has been speculation for months about a possible sale of Sky Germany, but now US parent company Comcast is announcing a decisive change. In the future, the European pay-TV business will be in the so-called “Communication Markets and Platforms Sector”. This report presents within the group on the core business of broadband and mobile communications.

The media business takes a back seat

Notable forwarding in several respects. In concrete terms, it means that Comcast is tying its European pay-TV subsidiary more closely with its core US business. But how can this decision be explained? After all, the US media giant has so far made a clear distinction between its national core business with broadband and cable communications and a global media and content division under the NBCUniversal brand.

Joint reports now at least strongly suggest that Comcast is positioning itself more as a communications group than a media group and wants to tie the European pay-TV affiliate even more closely to itself. Since Comcast’s acquisition of Sky, Sky Germany in particular has lost more and more entrepreneurial independence, and the Sky Group has also been restructured internally.

harbinger of sale?

Aside from this, the “Content and Experiences” division still exists within Comcast, which includes the areas of content and entertainment. These reports are for Sky Sports as well as Sky Film and TV studio productions. Comcast’s media division brings together NBCUniversal TV, streaming platforms and flagship streaming device Peacock.

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There are clear signs that Comcast now sees Sky more as a content supplier. For example, European Sky Studios could act as a supplier to the Peacock or NBCUniversal television networks rather than as an independent platform for television and streaming. With Sky Germany likely to be sold, further loss of relevance to the Sky brand cannot be avoided anyway.

1 billion write-offs on Sky

In the third quarter of 2022, Comcast wrote off $8.6 billion on Sky. Comcast justified the decline in future cash flow with macroeconomic conditions in Sky Group’s core markets. The company faced economic headwinds in the UK and abroad. However, a potentially unimportant cost factor in this context is the loss-making German subsidiary.

The situation is not likely to improve anytime soon. Economic conditions in Europe have deteriorated further, and potential buyers for Sky Germany probably won’t be lining up for the time being either. For better or worse, Comcast will have to step in financially for the Unterföhring’s red numbers.

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