UK pay-television broadcaster BSkyB could aim to merge Sky Italia with rival pay-television service Mediaset Premium when it finalises a deal to acquire the Italian company, according to analysts at Bernstein.
The Mediaset Premium division of Italian commercial broadcaster Mediaset competes with Sky Italia for premium sports rights.
However, Bernstein said that BSkyB could try to reduce its spending on such rights by bringing together the two companies in an “attractive” merger. BSkyB is trying to acquire Sky Italia and also German pay-television broadcaster Sky Deutschland, bringing together leading pay-television sports broadcasters in three of Europe’s four largest markets, and hopes to complete the deal next month.
BSkyB’s share price rose by 6p to 867.5p following the note from Bernstein.
A deal “would likely cap the rise in content spending,” Bernstein said. “Football costs will rise by about 12 per cent for both (Italian football’s top-tier) Serie A and (the Uefa) Champions League in the next contract cycle which starts in 2015, rising to almost 36 per cent of total (Italian) pay-TV industry revenues, a level which both companies must view as unsustainable.”
In other news, Crispin Odey has accepted BSkyB’s offer to buy his minority stake in Sky Deutschland. Over the summer, Odey said that he would not sell his eight-per-cent stake in Sky Deutschland as it “significantly understates the value of the company,” according to the Daily Telegraph newspaper.