Comcast has won an auction to acquire UK telecommunications company Sky, bidding $38.8 billion to overtake Rupert Murdoch’s 21st Century Fox after a lengthy bidding war this summer. Comcast’s win paves the way for it to acquire Sky and its 23 million European subscribers and entertainment assets. Sky’s shareholders will now need to approve the deal.
Over the course of this year, Comcast and Fox have been locked in a titanic battle over their futures, one that will define the nature of the industry as a whole. Last summer, Disney CEO Bob Iger spoke with Murdoch about an acquisition of Fox and made its first offer in December, and while Comcast made its own overtures this spring. The two made several bids this spring, but after Disney later upped its offer, Comcast dropped its plans to acquire Murdoch’s company.
Simmering in the background of this was Murdoch’s ambitions to completely acquire Sky — Fox already owns a 39 percent stake in Sky, and Murdoch has been working to fully acquire it since 2016 — to better position the new version of Fox in the larger telecommunications world. He wasn’t the only one: Comcast was also interested in acquiring Sky, and another bidding war ensued this summer. In August, government regulators set up an auction for the company, which pitted Fox (and by proxy, Disney, which would swallow up Sky during its Fox acquisition) against Comcast.
The Wall Street Journal notes that Comcast’s win will give it a huge new pool of international customers, but it comes at a steep price: this summer’s bidding war boosted the final cost for Sky’s cost far above what it was willing to pay months ago. The acquisition will also give Comcast Sky’s major television and programming assets, which will help it compete against the likes of Netflix and Amazon, which have invested heavily in original entertainment.
Ultimately, the sale is a loss for Disney, which is working on its own streaming service. Disney still owns Fox’s 39 percent stake in the company, and it remains to be seen if it’ll hold onto it. The deal will now go before Sky’s shareholders for their vote.
Disclosure: Comcast is an investor in Vox Media, The Verge’s parent company.