NBCU, Sky Merger Plans Unveiled Following $39 Billion Comcast Takeover

SKY headquarters 2- Isleworth on May 9, 2017 - Getty-H 2018
Leon Neal/Getty Images

The combining of European pay TV channels, a restructuring of NBCU's EMEA channels business and the moving of Sky's sales division are among the consolidation proposals.

With the merger of Fox's assets into Disney having dominated much of the industry chatter over the past few weeks, the consolidation wheels on another multi-billion dollar acquisition have now started moving. 

Comcast's $39 billion deal for European pay TV giant Sky was one of the biggest media industry purchases of 2018, a deal that was actually spurred on when Comcast pulled out of the running for Fox.

Comcast is now looking to bring together the U.K. and German operations of its NBCUniversal arm with those of Sky and to review the structure of NBCU's EMEA channels business, as outlined in a letter sent to NBCU's international staff on Friday and seen by The Hollywood Reporter.

The letter, sent by Kevin MacLellan, NBCU's chairman of global distribution and international, highlighted four major proposals for significant restructuring across the company's businesses in EMEA, proposals that will now go into a consultation process and could involve major upheavals for staff across the U.K. and Germany.  

Among these is the combining of NBCU and Sky pay TV channels, to be operated under the Sky portfolio and based at Sky's campus in west London. NBCU U.K.'s channels include Syfy, E! and Universal TV.

Over in Germany, Sky Deutschland is set to become the parent company of NBCU's Networks business, with a proposal to co-locate at Sky's Unterföhring base in Bavaria. As a result of this, NBCU is proposing to review the structure of its EMEA channels business outside of the U.K. and Germany, and expects the remaining U.K.-based channels team, plus some support groups, to relocate to Sky's London hub, in order to "increase collaboration with Sky channels' business."

The final proposal is for Sky's sales operations to be moved from under its Sky Vision banner — which has distributed shows such as Britannia, Fortitude and the upcoming Catherine the Great — and folded later this year into NBCU's Global Distribution business, which would remain at Central St. Giles in central London.

"Each of these proposals is the result of careful consideration from both NBCUniversal and Sky," McLellan said in the letter, which acknowledged that it was a "difficult time" for a number of NBCU and Sky staff members.

While there is no doubt speculation over redundancies that inevitably come from such consolidation, especially with the merging of departments, sources on both sides have been keen to downplay the impact and underline how nothing is set in stone until the consultation period is complete.

"Affected employees are being spoken to in person today and will be fully supported with care, fairness and transparency over the coming weeks and months, " the letter added. "Thank you for your sensitivity and support of your colleagues during this consultation period."