Sky shares hit by news of soccer rights loss
LAURA WALTERS, TIM HUNTER AND TOM PULLAR-STRECKER
Sky TV's shares plunged more than 6 per cent this morning on the news that it had lost the rights to broadcast the English Premier League soccer.
Sky TV shares were last trading at $5.33, down 34 cents. The price dipped as low as $5.20 in early trading.
Sky TV last night confirmed it had been outbid for the rights in New Zealand, with successful bidder Coliseum Sports Media Management.
Coliseum Sports Media was established in New Zealand in June last year, with offices in Auckland and California. The company's directors are listed as Peter Cooper and Matthew Cockram.
Cooper is a California-based New Zealander said to be worth $650 million, a former executive director of Lion Nathan and founder of Cooper and Company. Cockram is a lawyer.
Telecom this morning would not confirm or deny if it was involved in an alternative pay-television venture.
Craigs Investment Partners analyst Arie Decker said it was difficult to assess the impact of the news on Sky TV without understanding the business plan of the party winning the rights.
"If it's part of a strategy to acquire other rights off Sky then clearly the issues are greater," he said. "But on an isolated basis I wouldn't think the loss of these rights for a period of time would have a particularly significant influence on Sky.
"Sky has lost rights previously that have come back to them. And it's lost rights before and the party has used some of them but sold others back to Sky."
Decker said that although the football rights were important they were second tier compared to the local rights for rugby, rugby league, cricket and netball.
"And those rights have barriers to entry because Sky is involved in the production," he said.
"But the English premier league, golf and tennis, they just get a feed in from offshore and they just put it through so they are less valuable rights and more susceptible to competition."
Science Media Centre founder and manager Peter Griffin said the move to digital distribution over paid television broadcasters was a sign of the disruptive quality of smart phones, broadband, and the internet.
"In the New Zealand market it's very good - there's not enough competition in premium sports and television broadcasting," he said.
"This is the sort of innovation we need to see to shake up the paid TV model.
"In the past the major barrier to entry in the market was the cost. Sky has been able to sign the big cheques."
But Griffin said this was not the end for Sky TV.
"They are in about half of New Zealand homes," he said.
"MySky is one of the most successful gadgets to enter the lounge. They've seen off a lot of competitors before."
But unless Sky could replace the English Premiere League with something compelling people could start cancelling their subscriptions, although most would keep their sport subscriptions until the rugby season was over, he said.
"If Heatley moves beyond sports it will be really interesting," Griffin added.