It’s an odd situation, as the UK, in particular, is several years ahead of the technology curve than in New Zealand. Over there, sport is no longer exclusive, there is a compelling free to air offering, Amazon is in the market and there’s a multitude of other cable competitors. Basically, everything that the market fears for Sky NZ has already happened and it’s champagne all round.
So, what’s the problem for Sky NZ? On one hand, nothing. Big revenue, big profit, low debt. On the other, the share price is at an all time low – 41 percent down in the last 12 months. It’s a hell of a beat down for a company just playing the standard corporate hand to a slowly declining profitable asset. The trouble is that markets like cool stuff like electric cars, less so slowly diminishing media companies.
Of course, the flip side is that Sky NZ might find itself the target for someone else, the lower share price has to make the business more vulnerable (or perhaps it’s just a good time to buy shares).
Either way, change is probably afoot and Sky has a reputation for being a very efficient business where profit is paramount. If nothing else, this probably rules them out of a late bid for the Warriors.
- Sam Aldred is the director of Receptive.tv. He regularly writes for StopPress on issues relating to the television industry.