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Italian newspaper Il Sole 24 Ore is reporting that Sky and Mediaset are in “advanced talks” over the sale of Mediaset’s Premium pay-TV business.
The news prompted a flash report from equity analysts at Exane/BNP-Paribas, reminding investors that over the past five years much the same story has run. Nevertheless, the bank also says it is firmly in favour of consolidation in Italian pay-TV. “The current competition between SKy and MS Premium generates rights inflation and leaves both companies struggling to profitable.”
“We also note that the timing of a deal would be ideal ahead of the auctions for key Serie A and Champions League rights in ’17,” adds the bank’s note. “However, any deal would be closely examined by the antitrust, and one should remember that no single player can own the entirety of the Serie A rights so any deal would leave the door open to another player acquiring these rights (Telecom Italia).”
The bank’s view is that the report should be taken with a bit of caution. “If true it would be a positive for Mediaset (MS Premium is heavily loss making) even if valuation is likely to be low/very low. The impact for Vivendi is less obvious – as it is not clear whether Vivendi would be more or less interested by Mediaset re-focusing on Free-TV.”