Comcast CFO on Why Sky Is More Than a "Satellite Business"

Courtesy of Comcast
Michael Cavanagh

Michael Cavanagh told an investor conference that the European pay TV giant has far more growth prospects against streaming rivals than U.S. satellite operators.

Don't tell Comcast CFO Michael Cavanagh that taking a $31 billion run at British pay TV operator Sky will land the U.S. cable powerhouse with a European satellite distributor that faces the same challenges that U.S. satellite TV services have been dealing with when competing against Netflix and YouTube.

"We don't see [Sky] as a satellite platform," Cavanagh on Monday defiantly told the Deutsche Bank Media & Telecom Conference in Palm Beach, Florida, during a presentation that was webcast. "We look at [Sky] being very distinct from what we see from some of the legacy satellite players in markets that we know," the exec argued with an eye to U.S. players like DirecTV or Dish Network.

Comcast last week unveiled its big play for Sky to expand the company's international reach and revenue abroad, beyond the maturing U.S. market. Sky operates in the U.K., Ireland, Italy, Germany and Austria, plus has a new over-the-top service in Spain. But Comcast's bid for Sky comes as global streaming services like Netflix and Amazon Prime are challenging traditional cable and satellite TV players.

Wall Street watchers last week questioned why Comcast would bid for a satellite platform without two-way interactivity with subscribers. Cavanagh countered that skepticism by arguing Comcast, NBCUniversal and Sky could secure synergies in programming, especially in sports and film content, and in technological innovation.

He also pointed to Sky's Q box as having synergies with Comcast's X1 set-top box, and the British pay TV operator being a content aggregator that can be combined with broadband and mobile packages.

"We don't see it [Sky] as a satellite business, but much more as an enabling technology that, as they invest in new technology, there will be other ways for people to experience that video content," Cavanagh told investors.

The Comcast CFO did not address the prospect of a bidding war between itself and Fox over Sky, or possibly topping Walt Disney's bid for most of the assets of 21st Century Fox. Comcast in December pulled a $60 billion offer for 21st Century Fox over antitrust concerns just before Walt Disney unveiled its $52.4 billion deal for the Fox assets, which remain in play.