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BSkyB creating European TV network

Sat., July 26, 2014, midnight

LONDON – London-based pay TV network BSkyB has agreed to take control of its sister companies in Italy and Germany, creating a multinational European broadcaster. The deal could have a wider impact on the media industry, giving Rupert Murdoch’s 21st Century Fox a cash boost to potentially revive its attempt to buy Time Warner.

BSkyB said Friday it will buy Sky Italia and 57 percent of Sky Deutschland for $9.1 billion from media giant 21st Century Fox. Besides being chairman and CEO of 21st Century Fox, Murdoch is also BSkyB’s largest shareholder with a stake of just over 39 percent.

BSkyB said the deal would create a pay TV provider with 20 million customers across three of Europe’s four biggest markets.

Media analyst Claire Enders said the deal shows BSkyB is moving to build business outside its base in Britain and moving beyond direct local competition with BT.

“It’s now focused on transporting its technology and its production skills into other markets where there is demand for cutting edge TV,” she said. “They believe this phenomenon will come to other countries in Europe, particularly Italy.” She said she did not anticipate regulatory obstacles.

James Murdoch, Rupert’s son and co-chief operating officer of 21st Century Fox, said the combination of European Sky companies would create “enormous benefits for the combined business and for our shareholders.”

Analysts note 21st Century Fox, which has a strong presence in cable, broadcast, film, pay TV and other fields, could use the cash from the European TV deal to help fund its pursuit of Time Warner after the recent failure of an $80 billion offer.

Time Warner owns TV channels CNN, TNT and TBS, along with the Warner Bros. movie studio, which includes Batman, Superman and Harry Potter. Fox owns the 20th Century Fox movie studio, the Fox broadcast network and such TV channels as Fox News and FX.


 

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