BSkyB seeks out new growth in Europe by confirming a deal to buy Rupert Murdoch's pay-TV assets in Germany and Italy - potentially creating a media powerhouse with 20 million customers. Hayley Platt asks whether the $9 billion price tag is a fair price to pay.
It's a deal that promises to unite Rupert Murdoch's European satellite empire. His 21st Century Fox already owns all of Sky Italia, 57% of Sky Deutschland and 39% of BSkyB. Now BSkyB has agreed to buy the rest for 9 billion dollars. It will create a pan European media giant with almost 20 million customers. Guy Bisson, IHS Technology welcomed the deal. SOUNDBITE: Guy Bisson, Research Director, Television, IHS Technology, saying (English): "I think it's absolutely necessary at this time in the development of the pay TV industry to begin thinking about international footprints and the reason for that is because the emerging competition which of course is over the top or internet delivery of television for the likes of Netflix very easily scales on an international basis." BSkyB is 25 years old. It broadcasts to 10 million homes in the UK. But the uptake is much lower in the rest of Europe, something it hopes to change. SOUNDBITE: Guy Bisson, Research Director, Television, IHS Technology, saying (English): "The very strong growth potential in the medium-term is in Germany. That platform there has been growing very strongly in recent years. By contrast Italy has taken a bit of a downturn, very badly hit by the recession. So the opportunity there is more about the roll out of additional services like internet and telephony." Murdoch is looking to free up cash for Fox to buy media giant Time Warner. It recently made an unsolicited $80 billion dollar bid for the media conglomerate which owns Game of Thrones maker HBO and news business channel CNN. But it was rejected as too low. Mike Ingram, BGC Partners. SOUNDBITE: Mike Ingram, Market Commentator, BGC Partners, saying (English): "I think there's an awful lot more scepticism about whether 21 Century Fox is at all wise be bidding for Time Warner and thinking that may that Rupert Murdoch is focussing too much on his legacy rather than the economics of the deal." The move came as Sky announced its annual results. The satellite broadcaster reported a rise in revenues of 7% to £7.6 billion, reflecting a stronger UK economy. Only its broadband growth disappointed thanks to competition from BT.