Mega Sky, Fox Deals Would Boost Comcast's Worldwide Profile, NBCUniversal's Kevin MacLellan Says

Kevin MacLellan Headshot  - H 2013
NBCUniversal International

Kevin MacLellan Headshot  - H 2013

"We do see the need to become more of a global entity," the Hollywood studio's international distribution head told the Banff World Media Festival.

Kevin MacLellan, chairman of global distribution and international at NBCUniversal, on Monday said U.S. cable powerhouse Comcast's potential $31 billion deal for European pay TV giant Sky, and an even bigger anticipated play for 21st Century Fox assets, would expand his company's international reach and revenue abroad.  

"We do see the need to become more of a global entity," MacLellan, who heads up his studio's international expansion to increase non-U.S. revenues, told the Banff World Media Festival during a keynote address. He argued NBCUniversal needed to diversify and grow outside a mature U.S. market, and mega deals looming will provide much-needed geographical scale.

"It's really about, we're so big in the U.S., so how do we create a business overseas to address the fact that the margins are likely going to shrink as we move forward?," MacLellan said. The NBCUniversal exec added that the Sky and 21st Century Fox assets were uniquely suited to offer Comcast the expanded international footprint.

"First of all, the Fox business in general, whether Sky or the total business, is a unique business," with most of its revenues coming from the international market, MacLellan told Banff attendees. Comcast is expected to make a possible play for the Fox assets so that a combined Universal-20th Century Fox film studio can compete better globally with rival Disney's movie production.

The U.S. media giant earlier made its previously planned $31 billion bid for Sky official, surpassing Fox's offer for the 61 percent stake in Sky that it doesn't currently own. The industry is also watching closely to see whether Disney's own deal to purchase most of the assets of 21st Century Fox for $52.4 billion is now in jeopardy as Comcast takes a run at prized assets like Twentieth TV and FX.

MacLellan said the Sky and Fox assets are not the only way NBCUniversal can grow internationally. They just showed up on the market, and can't be ignored. Delivering a keynote on the future of global TV in an increasingly digital age, MacLellan also expressed optimism over the future of broadcast television and advertising.

"The number of people you can reach at any point in time as an advertiser is still wildly in favor of a broadcaster over an OTT player," he argued. MacLellan also addressed the current spate of industry consolidation, as he insisted the global entertainment industry will not shrink down to four or five major players able to dominate everyone else.

"Maybe it turns into a few and a few turns into many," the exec said, predicting that new entrants will innovate and challenge larger players. "Netflix is an amazing service. I'm very impressed with everything they have done. But they are a very general entertainment service," he added.

MacLellan forecast new digital players will emerge to offer niche subscrption VOD services that consumers will embrace and which will operate side-by-side with Netflix and Amazon Prime.

The Banff World Media Festival continues through Wednesday.