Comcast is selling Sky Deutschland to Bertelsmann’s RTL Group, which could create a major shift in the European pay TV market if approved by regulators.
Under the terms of the pact, RTL will fully acquire Sky’s businesses in Germany, Austria, Switzerland, including customer relationships in Luxembourg, Liechtenstein and South Tyrol on a cash-free and debt-free basis.
The deal includes €150 million ($176 million) in cash and a variable consideration linked to RTL Group’s share price performance. The consideration can be triggered by Comcast at any time within five years after closing, provided RTL Group’s share price exceeds €41 ($48.06). The variable consideration is capped at €70 ($82.05) per share or €377 million ($442 million).
RTL Group has the right to settle the variable consideration in RTL Group shares or cash or a combination of both and is considering buying treasury shares to be in a position to settle the variable consideration fully or partly in shares.
The transaction, which has been approved by RTL Group’s board of directors, would create an entertainment business with around 11.5 million paying subscribers, making it the third largest streaming provider in Germany behind Netflix and Amazon’s Prime Video.
The deal combines Sky’s premium sports rights such as Bundesliga, DFB-Pokal, Premier League and Formula 1 with RTL’s entertainment and news brands across RTL+, free-to-air and pay TV. It also unites the fastest growing streaming offers in the German market, RTL+ and WOW.
Additionally, RTL will have the right to use the Sky brand in the the DACH region (Germany, Austria, Switzerland), Luxembourg, Liechtenstein and South Tyrol under a separate trademark license agreement.
The combined company’s 2024 revenue was €4.6 billion ($5.4 billion), with approximately 45% coming from subscriptions. RTL Group’s revenue for 2024 was €8.2 billion ($9.6 billion), over 30% higher than RTL Group’s reported consolidated revenue of €6.25 billion ($7.3 billion) for 2024. Expected synergies from the deal are estimated to be around €250 million ($293 million) per year within three years after closing.
The acquisition of Sky Deutschland is the largest transaction for RTL Group since its inception in 2000.
In addition to boosting its streaming business, RTL Group CEO Thomas Rabe said the deal would further diversify the companies revenue streams and make the company “even more attractive for creative talent, rights holders and business partners,”
“The combination of RTL and Sky is transformational for RTL Group. It will bring together two of the most powerful entertainment and sports brands in Europe and create a unique video proposition across free TV, pay TV and streaming,” he noted. “Together, RTL and Sky will be in an even stronger position to invest in people, content and technology in Germany and in Europe to compete with the global tech and streaming players. I want to recognise the outstanding work of the Sky Deutschland team, whose strong performance over recent years has laid the foundation for this next phase.”
Sky Group CEO Dana Strong said Sky Deutschland has made significant progress over the past three years, delivering “strong operational performance and reaching a record number of subscribers,” and is on track to achieve break-even earnings before interest, taxes, depreciation and amortization (EBITDA).
“Combining the strength of our brand with RTL builds on that momentum and opens up even greater opportunities,” Strong added. “This deal provides a strong platform for long-term success, and ensures Sky continues to share in the growth of the combined business.”
The two businesses will continue to operate independently until regulatory approvals are obtained, which are expected in 2026.
Sky Deutschland CEO Barny Mills will continue to lead the business until the transaction is completed. RTL Deutschland CEO Stephan Schmitter will stay in his current role until closing of the transaction and then lead the combined company. RTL Deutschland will remain headquartered in Cologne and Sky Deutschland in Munich.
PJT Partners served as advisor to Comcast on the transaction.
