Sky.com

Now that Comcast has formally thrown its hat into the ring to acquire Sky PLC, the U.K. broadcaster could find itself in the middle of a bidding war between Comcast and 21st Century Fox.

Which begs the question: Why does everyone want Sky so much?

More and more, U.S. companies have been looking internationally as a way to further build scale to compete against the rising tide of deep-pocketed tech companies — like Amazon and Netflix — invading their turf.

Also Read: Comcast Makes Formal $31 Billion Cash Offer for Sky, UK Company Scraps Fox Deal

Sky’s businesses would grow Comcast’s international revenue from 9 percent of its overall revenue to 25 percent. Sky counts nearly 23 million customers in key parts of Europe, including Germany, Italy and Austria, along with the U.K. and Ireland.

Sky has “a tremendous distribution network around Europe,” Eric Schiffer, CEO of The Patriarch Organization and chairman of Reputation Management Consultants, told TheWrap. “These large companies [like Fox and Comcast] have to do more with distribution in the battle against streaming giants like Netflix, and now Amazon, and there are not many things that you can acquire today to give you that power and ability.”

In discussing the proposal on its first-quarter earnings call Wednesday morning, Comcast chairman and CEO, Brian L. Roberts attempted to beat back any assertions that Comcast needed to buy Sky. “I don’t think we have to do this,” he said, but added that it makes sense with such similarities between the two companies.

Also Read: Stocks Soar for Comcast and Sky After $31 Billion Offer

“I think it is a unique asset in Sky’s case that fits well within the mix of businesses that we’ve already got,” Roberts continued. “A benefit is that you would get new geographies and additional scale, which gives you optionality for future things to consider.”

Sky would fit in nicely with Comcast’s other assets, namely NBCUniversal, with its mix of entertainment, sports and news content. In February, Sky extended its rights deal with the English Premier League through 2022, among the world’s most popular (and thus, valuable) sports leagues. That would work well with Comcast, which holds the U.S. TV rights for the British soccer league via NBCUniversal, also through 2022.

There’s also a bit of corporate gamesmanship going on.

Also Read: Comcast Tops Q1 Earnings Estimates Thanks to Winter Olympics and Super Bowl

Comcast’s proposal, which caused Sky’s independent directors to withdraw their recommendation that shareholders accept the Fox offer, would also complicate Disney’s impending purchase of Fox assets, of which Sky was supposed to be a major part. If Fox doesn’t get Sky, Disney would be on the hook to make an offer itself for all of Sky.

“The Machiavellian view is that Comcast is doing this to try to blow up Disney’s deal,” Schiffer added. “It’s jamming a competitor.” However, a Fox insider told TheWrap the deal with Disney is not contingent on what happens with Sky.

For Fox, Sky is a bit of a passion project for Rupert Murdoch, who founded the satellite broadcaster in 1990, and already owns 39 percent of the company and has had his eye on gaining full control for years.

At least investors remain bullish that Fox will not give up its pursuit of Sky despite Comcast’s best efforts.

Disney, Comcast and Sky did not immediately reply to our request for comment.

9 Biggest Billion-Dollar Entertainment and Media Deals in 2017 (Photos)

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:
Getty Images
Disney to acquire most of 21st Century Fox for $52.4 billion

In a massive deal that could change the entertainment industry even more than AT&T-Time Warner, Disney announced plans to acquire Fox's film and TV studios and much of its non-broadcast television business, including regional sports networks and cable networks such as FX, FXX and Nat Geo. Disney would also pick up Fox’s stake in the European pay-TV giant Sky — and be better positioned to win regulatory approval to complete the acquisition of the 61 percent of the company it does not already own.
Discovery Communications agrees to buy Scripps Networks Interactive for $11.9 billion

The merger of two cable powerhouses brings together channels including Discovery, Science, Food Network and HGTV – and could give the combined company a stronger position as pay-TV continues to migrate to the internet.
Discovery/Scripps
Sinclair Broadcast Group agrees to buy Tribune Media for $3.8 billion

This deal, if approved, would give conservative-leaning Sinclair control of 223 stations in 108 markets, including 39 of the top 50, covering 72 percent of households in the country. And it's only possible under rule changes implemented by new FCC Chairman Ajit Pai.
Sinclair/Tribune
Cineworld offers to buy Regal Cinemas for more than $3 billion

After a string of movie theater mergers last year, the sector has quieted down -- along with the box office. And while this isn’t yet a done deal -- or even an accepted offer -- British chain Cineworld made a late November bid of $23 a share for the U.S.’s No. 2 cinema chain.
Cineworld/Regal
Meredith Corp. acquires Time Inc. for $2.8 billion

The magazine megadeal is a sign of changing times in the publishing industry, with the owner of esteemed brands like Time, Fortune and Sports Illustrated selling to the parent of Better Homes and Gardens and Country Life – backed by $650 million from big-time conservative donors the Koch brothers.
Meredith/Time
Verizon acquires Straight Path Communications for $2.3 billion

Straight Path may not be a household name, but it was the subject of a bidding war between AT&T and Verizon. The company is one of the largest owners of millimeter wave spectrum, seen as key to the buildout of 5G networks, which should power much faster mobile internet -- better for video -- in the near future.
Verizon/Straight Path
Disney buys the rest of BAMTech for $1.6 billion

The Mouse House jumped into internet TV in a major way in 2017, announcing upcoming Disney and ESPN-branded streaming services and acquiring the rest of streaming tech company BAMTech to power those products.
Disney/BAMTech
Entercom buys CBS Radio for $1.5 billion

CBS Radio was intended to be spun off from its broadcast parent in an IPO, but instead it was scooped up by a competitor. The combined company, now the second largest radio business in the country, owns and operates 244 stations in 47 markets.
Entercom/CBS Radio
MGM buys the rest of Epix for $1 billion

The independent studio went all in on the pay-TV business, buying the rest of the premium cable network from Viacom and Lionsgate. And that's paid immediate dividends, as MGM's media networks division propelled it to a strong third quarter.
MGM/Epix

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Rewind 2017: Media and content consolidation continued this year

While all eyes were on AT&T's $85 billion acquisition of Time Warner, announced in late 2016 but facing an antitrust lawsuit from the Justice Department, there were plenty of other megadeals in media, tech and entertainment that kept investment bankers busy in 2017.

Here are some of the biggest deals of the year:

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