'Comparisons to DirecTV are perhaps inevitable,' says Craig Moffett, but keeps his 'buy' rating on Comcast.
"Comparisons to DirecTV are perhaps inevitable," says Craig Moffett, but keeps his"buy" rating on Comcast.
Moffett started off by highlighting that "after a six-month bidding war with Disney that was roundly criticized by Comcast’s investors, Comcast sealed the deal for Sky in September 2018 for the princely sum of $48 billion , an astounding 16 times enterprise value to earnings before interest, taxes, depreciation and amortization multiple that represented a near tripling from the roughly six times multiple at which the shares had been trading just a year before.
Live sports have been canceled, the U.K. advertising market "utterly imploded," and pubs and clubs that have Sky subscriptions were shuttered amid the pandemic. Comcast CFO Michael Cavanagh during a recent investor conference acknowledged that "the macro climate in Europe is as challenged, if not more challenging, ... across Italy, U.K. and Germany" amid the pandemic.
Comcast management has always spoken of the Sky deal as providing strategic and financial benefits for the long-term. Executives have highlighted such benefits of owning Sky as the fact that its U.S. streaming service Peacock could leverage Sky know-how and technology, that Comcast has funded an increase in Sky's push into original content to turbo charge it, and NBCUniversal and Sky are planning to launch a global news service.
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