“Sector topping” Sky Deutschland

Savvy shareholders in Sky Deutschland, including Rupert Murdoch, are beginning to see some very positive traction in the broadcaster’s share price. It rose steadily through December to its current €4.36, and Berenberg Bank’s Sarah Simon reckons it still has plenty of upside and gives the stock a “Buy” rating and a target price of €5.40.

She focuses on the recently announced deal with Deutsche Telekom (DT) where from this summer DT subscribers will be able to access Sky’s output, not least its exclusive coverage of the German Bundesliga soccer leagues.

We do not know the precise financials to the DT agreement, but Simon suggests that they may be similar to that agreed with cable operators KDG and Unity Media. As with those deals the DT revenues flow straight to the bottom line. “In those deals, the cable operators take a share of the revenue in return for providing front-line customer service and acquisition. SkyD management has stated that the contribution of such customers is similar to those that it recruits directly.”

This latest deal will help Sky Deutschland “see a material increase in customer growth,” says the bank’s report.

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