BSkyB in talks to combine Fox European assets

AP News
Posted: May 12, 2014 9:41 AM

LONDON (AP) — BSkyB, the London-headquartered satellite broadcaster, confirmed Monday that it is in early talks with 21st Century Fox to buy its pay television assets in Italy and Germany.

A deal would create a pay-TV company with the power to sell services in three European territories. It would also allow Rupert Murdoch to consolidate his interests — 21st Century Fox currently owns 57 percent of Sky Deutschland, all of Sky Italia and 39 percent of BSkyB.

"Over the years we've had numerous internal discussions regarding the organizational and ownership structure of the European Sky-branded satellite platforms," Fox said in a statement. "From time to time these conversations have included BSkyB, however no agreement between the parties has ever been reached."

The talks come as BSkyB faces increasing competition from BT PLC, which has expanded its sports programing and is offering free Premier League football when customers sign up to its broadband package.

For more than two decades, since gaining the live rights to English Premier League football, BSkyB has been the dominant force in the sports rights arena. Soccer has been pivotal to its business model.

But in recent months it has faced stiffer competition from BT, the former telecommunications monopoly which has attempted to snatch sports rights to bolster its broadband business. Last year, BT won the exclusive rights to the Champions League, Europe's top club competition, over BSkyB and public broadcaster ITV, with a bid of 1.08 billion euros ($1.48 billion).

The Latest Demands From Ford
Cortney O'Brien

BSkyB said the talks with Fox could result in "a world-class multinational pay TV group."

"These discussions have not progressed beyond a preliminary stage, no agreement has been reached on terms, value or transaction structure and there is no certainty that a transaction will occur," BSkyB said.

Fox's portfolio includes cable, broadcast, film, pay TV and satellite assets spanning six continents.