As battle for Disney approaches endgame, Sky is Comcast's final prize

After raising the white flag in the battle with Walt Disney Co. for the bulk of Rupert Murdoch’s media empire, Comcast Chief Executive Officer Brian Roberts has one last prize to fight for — the British pay-TV company Sky.

Comcast currently has the upper hand in the race for Sky, with an offer of £26 billion ($34 billion) that’s six per cent higher than a rival, Disney-backed bid by Murdoch’s 21st Century Fox Inc, which already owns 39 per cent of the company. But as Disney CEO Bob Iger weighs whether to continue the bidding war for Sky and seek full ownership, here’s why Roberts is so keen on the asset.

Buying Sky would give Comcast international scale, a hedge against the erosion of cable-TV viewing in the US and a larger palette to compete with streaming services like Amazon.com and Netflix. 

Sky has 22.5 million customers across five European countries—a continent where pay-TV trends have been more stable—and is pushing into Spain and Switzerland.

Comcast would generate 25 per cent of its sales outside of the US if it buys Sky, compared with nine per cent currently. Sky has a suite of sought-after TV content that it uses to lure and retain subscribers, including rights to Premier League football. 

It won big at the latest Premier League auction, bagging the rights at a cheaper price and ending years of investor fears of ever-spiraling costs.  Sky will help the company diversify its production as well as pay-TV revenue.