Bidding war: Comcast nearly doubles Murdoch's offer for UK's Sky TV

Comcast aims to increase its global footprint with the acquisition of Sky. Photo/123RF.

Comcast said Wednesday that it's offering US$31 billion (NZ$44 billion) to buy the British TV provider Sky, officially kicking off a bidding war between the US cable giant and 21st Century Fox, which has offered $16.5 billion for the company.

But why is a UK-based television company such a sought-after piece of property, and what could a deal mean for Comcast's customers?

The answer can be found in Comcast chief executive Brian Roberts' remarks to investors on an earnings call Wednesday morning.

"It's a unique asset," Roberts said. "It fits well with the assets we've already got. . . a benefit is, you'd get new geographies and additional scale that gives you optionality."

In other words, a deal would give Comcast access to a bigger overseas audience and - according to industry analysts - new TV programming.

Sky is one of the UK's biggest broadcasters. It delivers a wide variety of programming, ranging from sports to crime thrillers. It has said it plans to spend over $9 billion on content this year. Among its most successful TV series is 'Riviera,' a drama starring Julia Stiles, who plays an art curator seeking to unravel the mystery surrounding her husband's death.

Comcast customers already have access to Sky content today, said Jonathan Chaplin, an industry analyst at New Street Research, making this deal more about Comcast gaining scale and spreading out costs. But other analysts say Comcast could use a deal with Sky to supercharge its own programming efforts.

"[The offer] portends a future where customers in the US and Europe have more access to global content, but also to a world where Comcast significantly expands its studio production, with more new shows being produced in-house for a global audience," said Craig Moffett, an analyst at the research firm MoffettNathanson.

Comcast owns NBCUniversal, which produces MSNBC, shows such as 'Saturday Night Live,' coverage of the Olympics and films such as 'Minions' and 'Jurassic World.'

Comcast faces growing competition in original programming from companies such as Netflix, which has said it plans to spend $8 billion this year on content. Netflix recently announced it was looking to borrow $1.5 billion to produce more original programming. (Despite that, Comcast recently said it was adding Netflix as part of its bundled offerings, in a move that could help retain cable customers.)

Media and entertainment companies are increasingly consolidating - Time Warner, for example, is seeking to merge with AT&T for $85 billion. And it looks like Comcast is also looking for additional opportunities in this space.

But unlike AT&T-Time Warner, which AT&T casts as a make-or-break bet as the telco tries to compete with Google and Facebook with a data-driven ad business, Comcast is emphasizing the optional nature of its offer for Sky. It's simply a good opportunity and the best use of Comcast's money right now, Roberts told analysts on the call.

- Washington Post