The future of Sky Germany still hangs in the balance. After months of speculation, at least one name is sticking
Rumors have been circulating since mid-2022 that Comcast – which also owns Sky UK, Ireland and Italia – is planning to divest its Sky Deutschland subsidiary. First of all, United Internet, which also owns 1&1 Drillisch, was in talks as a serious prospect. However, the negotiations appear to have failed. Now the station group ProSiebenSat.1 is in discussion – for the umpteenth time.
Sky Germany not profitable enough
Unlike Sky divisions in other countries, such as Sky Ireland and Sky UK, Sky Germany is not active in the telephone and internet business. Industry analyst Godard thinks the company is “too small compared to its UK sibling,” Bloomberg reports. Instead, the analyst suspects that a German buyer could merge Sky Deutschland with another company to bring it to a competitive size.
This is in line with current rumors that Comcast is now willing to make concessions after no prospective buyer accepted the sum of 1 billion US dollars that had been proclaimed. In this scenario, a division of Sky Deutschland would be quite conceivable, especially since ProSiebenSat.1 is said to be primarily interested in Sky Deutschland’s streaming offer. This has been shown, among other things, by research by the Süddeutsche. These primarily include the platform Wow and also Sky Q.
Difficult times for linear TV
In fact, a takeover of Sky Germany by ProSiebenSat.1 would bring together old friends. Because in the 1990s, the free-to-air channels ProSieben and Sat.1 also ran under the name Premiere. Later, however, they were decoupled and Premiere was renamed Sky. On top of that historical side note, the rumors seem plausible in that linear TV has been in crisis for some time. Many viewers prefer to use digital offers.
And it’s not just television that’s struggling at the moment. Sky Germany is also struggling to run a lucrative business amid growing competition in the streaming market. Attempts to penetrate the hardware market have so far failed. The company took the Sky-Box off the market again in 2020 after just two years. Sky Glass, a smart TV that has been on sale in the UK since the end of 2021, has not yet been released in Germany. An important sticking point for Sky is also the football rights, which are becoming more and more expensive and are therefore being distributed to other streaming services. With that in mind, an acquisition that bolsters its streaming business and leaves out linear TV could make sense.
The sale of Sky Germany has probably already failed
Among others, the specialist magazine “DWDL.de” reported that for a long time only Internet service provider United Internet, based in Montabaur, had any serious interest in taking over Sky Germany from Comcast. The negotiations were said to be well advanced and should be completed in 2022. United Internet would have the option of merging Sky Deutschland with 1&1 and thus offering a complete package of Internet, mobile communications and television. Exactly what Sky Germany has been missing so far.
However, that now seems a long way off. As reported by the industry magazine Clap, the negotiations have failed. According to insiders, Comcast’s target purchase price of around 1 billion euros was too high for the interested party. And another well-known interested party seems to have refrained from a takeover because of the price: Canal+. The French company has officially announced that a purchase of Sky Germany is under discussion. Since then, however, the project has been quiet.
This is what a takeover by ProSiebenSat.1 could look like
Should ProSiebenSat.1 actually take over Sky Germany, this would open up some exciting opportunities for both sides. The streaming platforms Wow and Joyn could merge and thus be emphatically broadened. That would also fit the previous direction of the transmitter group from Unterföhring. In addition, ProSiebenSat.1 would thus reposition itself clearly in the sports sector after it recently lost the NFL rights to the RTL Group.
With a break-up, the question of how the decoupling of the German branch from the Sky Group can work would also be clarified. So far, Sky Germany has been heavily dependent on the capacities of its sister companies, most recently due to staff cuts. If you now separate the streaming and TV business, since the German broadcasting group only seems to be interested in the former, several scenarios are conceivable. Either the TV offer from Sky Germany is about to end. Or just breaking it up makes it more attractive again for other interested parties. Large network operators such as Telekom could be interested in the frequencies that will then be freed up.
TECHBOOK will keep you up to date on all further developments in this regard.
Sources
- DWDL (“Sky Deutschland sale nearing completion”, accessed December 13, 2022)
- Clap (“Sky Germany: United Internet is probably withdrawing”, accessed on December 28, 2022)
- Süddeutsche Zeitung (“Are Pro Sieben Sat 1 and Sky going together?”, accessed on June 5, 2023)