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SBD Global/January 15, 2013/Media

Rupert Murdoch's News Corp. Raises Stake In Sky Deutschland To 54.5%

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Rupert Murdoch's News Corp. "tightened its grip on Sky Deutschland on Monday, saying it would raise its stake in the German pay-TV company to 54.5 percent from just under half in a capital increase," according to Steitz & ten Wolde of REUTERS. The move comes as media conglomerate News Corp. "separates its publishing and entertainment assets into two publicly traded companies following shareholder pressure to sell its troubled newspaper business and put a greater focus on the faster-growing TV companies." It also follows an attempt in '10 by News Corp. "to snap up the 61 percent of Britain's BSkyB that it did not already own." That deal "was eventually scuppered by a phone hacking scandal at one of Murdoch's tabloid newspapers." News Corp. "is hoping Sky Deutschland will turn out like BSkyB," which has amassed more than 10 million customers and grown adept at selling increasing numbers of services to them. News Corp. so far has invested about €1B ($1.34B) in the business (REUTERS, 1/14).

RAISING THE STAKES: In London, Gerrit Wiesmann reported Sky Deutschland said that News Corp. would give it €347.4M ($464.4M) "in return for new Sky Deutschland shares," raising its stake to 54.5%, from 49.9% five years after the U.S. group "first took a stake in the long-struggling venture." The move "was part of a financing package" totaling less than €1B, which Sky Deutschland CEO Brian Sullivan said that "the company would use to invest in programming, technology and customer service in order to lure more customers." Sullivan said that subscriptions rose 12% to 3.36 million last year. News Corp. COO Chase Carey said he still saw "significant market opportunities" for Sky Deutschland (FINANCIAL TIMES, 1/14). Also in London, Georg Szalai reported "Sky Deutschland will sell 77.9 million new shares to a News Corp. unit," raising about $465M in new equity. Also, Sky Deutschland will refinance $400M in bank credit facilities guaranteed by News Corp. In addition, News Corp. will cover Bundesliga football league rights that Sky Deutschland has secured through the '16-17 season (HOLLYWOOD REPORTER, 1/13).
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