British Man Given 16-Month Jail Term for Selling Pirated Streaming Content

A British man has been sentenced to 16 months in jail for selling streaming media devices embedded with pirated content from satellite TV operator Sky.

Warren Gleave, 51, was sentenced Aug. 16 by Burnley Crown Court in the U.K. after pleading guilty in May to violating provisions of the Fraud Act of 2006. Specifically, Gleave generated more than £200,000 over a three-year period selling pirated content on streaming devices online via Facebook Marketplace and on his website.

“This case sends a clear message that piracy, in whatever form it takes, is illegal, and the repercussions for engaging in it can be severe,” Matthew Hibbert, head of litigation at Sky, said in a statement.

The case underscores government and private sector’s increased efforts to combat video copyright infringement on social media and digital distribution.

Earlier this month, a Scottish national was fined £50,000 for selling set-top devices with subscriptions for pirated Sky movies and sports content.

“Private prosecutions are being used increasingly by rights holders, which means it is no longer just the police and other state authorities investigating and prosecuting these crimes,” said Gareth Minty, with the white-collar crime group at London-based law firm Mishcon de Reya.

CNBC: Comcast Unlikely to Increase Fox Bid, Focusing Instead on Sky

Comcast Corp. reportedly is not considering raising its $65 billion cash offer to top Disney’s current $71.3 billion bid for select 21st Century Fox assets, including 20th Century Fox Film and Fox’s 39% stake in British satellite TV operator Sky.

Citing sources familiar with the situation, CNBC (which is owned by Comcast’s NBC Universal) July 16 reported Comcast is putting its efforts and cash on Sky, which has 23 million pay-TV subscribers in the United Kingdom, Italy and Germany.

Comcast July 12 upped its offer for Sky to $34 billion (£26 billion), or £14.75 per share, exceeding 21st Century Fox’s revised offer of £14 per share. Comcast claims its superior cash offer has been recommended by an independent committee on Sky’s board of directors.

Regulatory approval could be playing a role in Comcast’s switching priorities. With Department of Justice appealing a judge’s decision greenlighting AT&T’s $85 billion purchase of Time Warner on antitrust issues, Comcast could be hedging its bets, according to CNBC’s David Faber, who broke the story.

In addition, Rupert Murdoch, who controls 39% of 21st Century Fox’s shares, reportedly favors Disney acquiring Fox’s studio assets.

How this impacts Disney’s bid for Fox remains to be seen. Disney CEO Bob Iger has called Sky the “crown jewel” in the Fox deal, which suggests he wouldn’t be amenable to minority ownership.

 

Comcast Tops Fox’s Bid for Sky as British Government Greenlights Murdoch’s Offer

NEWS ANALYSIS — As expected, Comcast Corp. increased its all-cash offer for British satellite TV operator Sky to $34 billion (£26 billion), or £14.75 per share, exceeding 21st Century Fox’s revised offer of £14 per share. Fox, which is controlled by Rupert Murdoch, currently owns 39% of Sky.

This came the day before the British government — after months of regulatory review — formally cleared Fox’s pursuit for remaining interest in Sky.

“It’s now a matter for Sky shareholders to decide whether to accept 21stCentury Fox’s bid,” Jeremy Wright, U.K. cultural and media secretary, said in a July 12 statement.

Which could be meaningless considering the third player (Disney) in this high-stakes media consolidation battle last month upped its bid for Fox to $71.3 billion (which includes Fox’s stake in Sky) after Comcast offered $65 billion — topping the Mickey Mouse’s company’s initial $52.4 billion acquisition amount.

Disney CEO Bob Iger has called Sky – with 23 million subscribers in the U.K., Germany and Italy, and a budding over-the-top video business – the “crown jewel” in the Fox deal.

Comcast claims its superior cash offer (Disney’s bid is cash and stock) has been recommended by an independent committee on Sky’s board of directors.

The company says it has the relevant regulatory approvals in the European Union, Austria, Germany, and Italy —  and expects to complete the acquisition before the end of October.

In a statement, the Philadelphia-based media giant said it has long admired Sky and believes the satellite operator is an outstanding company and a great fit with Comcast Cable.

“Today’s [July 11] announcement further underscores Comcast’s belief and its commitment to owning Sky,” said the company headed by cable veteran Brian Roberts.

Fox and Disney shareholders are slated to vote July 27 on the latter’s bid for 20th Century Fox Film, Sky and related assets. This gives Comcast about two weeks to up its Fox bid. Or does it?

BTIG Research senior analyst Rich Greenfield — in response to media scuttlebutt Comcast and Disney could stop the fiscal escalations with Comcast taking Sky and Disney opting for Fox’s assets — says such a move would be detrimental to both sides.

He said combining Disney and 20th Century Fox Film would dwarf Comcast-owned Universal Studios, while Disney abandoning Sky would give Comcast greater distribution.

“Why start a fight you do not want to finish?” Greenfield wrote in a blog note. “If Disney’s acquisition goal is adding 100% owned and controlled subscriber relationships, why go through all this effort and allow Comcast to own all of or at the very least control Sky?”

Fox Tops Comcast’s Sky Merger Offer

The “Sky” is apparently the limit for 21st Century Fox, which on July 11 upped its offer more than 30% for the British satellite TV operator to £14 per share — valuing the company at $32.5 billion. Fox, in late 2016, offered £10.75 per share of Sky stock (61%) it did not already own.

The bid represents an 82% premium on Sky’s £7.69 per share closing price the day before Fox’s initial bid. It also tops Comcast’s rival offer of £12.50 per share.

“As a founding member of Sky, we have remained deeply committed to bringing these two organizations together to create a world-class business positioned to deliver the very best entertainment experiences well into the future,” Fox said in a statement.

It’s a sentiment shared by The Walt Disney Co. and Comcast, which both have competing takeover bids for select Fox assets, including 2oth Century Fox Film and Sky.

Consolidation in the media world is in full swing following AT&T’s $85 billion acquisition of Time Warner as companies grapple with over-the-top video and subscription streaming video behemoths Netflix and Amazon Prime Video.

Disney last month upped its offer for Fox to $71.3 billion after Comcast bid $65 billion — topping Disney’s initial $52.4 billion acquisition amount.

Federal regulators last month approved Disney’s bid after the Mickey Mouse company agreed to divest 22 regional Fox Sports networks. Across the pond, the U.K. Secretary of State is expected rule on the Fox/Sky deal by July 12.

Regardless, Sky shares closed July 10 at £15.01 per share suggesting the sky is indeed the limit for shareholders convinced the bidding war will continue.

Disney Sweetens Fox Offer to $71.3 Billion

The Walt Disney Co. June 20 announced it signed an amended acquisition agreement with 21st Century Fox, agreeing to pay $71.3 billion for 20th Century Fox Film, which includes British satellite TV operator Sky Plc., and 20th Century Fox Home Entertainment, among other properties.

The $38 per share in cash and stock offer ups Disney’s existing $52 billion bid and bests Comcast’s rival $65 billion offer. Disney said it would acquire Fox immediately following the spin-off of the businesses comprising “New Fox” as previously announced.

Fox businesses to be acquired by Disney remain the same as under the original agreement. Since the original agreement was announced, the intrinsic value of these assets has increased, notably due to tax reform and operating improvements.

“The acquisition of Fox will bring significant financial value to the shareholders of both companies, and after six months of integration planning we’re even more enthusiastic and confident in the strategic fit of the assets and the talent at Fox,” Disney CEO Bob Iger said in a statement.

Iger said that at a time of “dynamic change” in the entertainment industry, combining Disney and Fox’s businesses and franchises would translate into more “appealing high-quality content,” while expanding Disney’s ambitious direct-to-consumer offerings and international presence.

Indeed, the acquisition would significantly increase Disney’s international footprint and expand its over-the-top video offerings, which include ESPN+; a Disney-branded streaming video-on-demand service launching in late 2019 that will feature Disney, Pixar, Marvel and “Star Wars” films along with a host of exclusive original content and library titles; and its ownership stake in Hulu. As a result of the acquisition, Disney would hold a controlling stake in Hulu.

Transaction Details

The deal allows Fox shareholders to choose either Disney stock or cash for their shares. Disney is expected to pay a total of approximately $35.7 billion in cash and issue approximately 343 million new shares to Fox shareholders, representing about a 19% stake in Disney on a pro forma basis.

Disney would assume about $13.8 billion of net debt of Fox. The acquisition price implies a total equity value of approximately $71.3 billion and a total transaction value of approximately $85.1 billion (assuming no tax adjustment). Disney has secured financing commitments for the cash portion of the acquisition.

As announced in the original acquisition agreement, the businesses to be acquired by Disney include Fox’s film production businesses, including 20th Century Fox, Fox Searchlight Pictures and Fox 2000 Pictures; Fox‘s television creative units, 20th Century Fox Television, FX Productions and Fox21; FX Networks; National Geographic Partners; Fox Sports Regional Networks; Fox Networks Group International; Star India; and Fox’s interests in Hulu, Sky plc, and Tata Sky.

The acquisition would occur immediately after the spin-off by 21st Century Fox of the Fox Broadcasting network and stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network into a newly listed company referred to as New Fox.

If 21st Century Fox completes its acquisition of the 61% of Sky it doesn’t already own prior to closing of the Disney acquisition, Disney would assume full ownership of Sky, including the assumption of its outstanding debt, upon closing.

Disney believes the transaction has a clear path to regulatory approval. Both companies have spent the past six months working toward meeting all conditions necessary for closing. In the amended agreement, Disney has increased the scope of its commitment to take actions required to secure regulatory approval.

The amended agreement has been approved by the boards of directors of Disney and 21st Century Fox.

U.K. Cultural Secretary Ups Sky Ownership Requirements, Including $2 Billion Fiscal Support

Owning British satellite TV operator Sky Plc just got a lot more expensive.

The British government June 19 laid out additional requirements to the ongoing £15 billion equity stake sale of Sky to 21stCentury Fox, which is turn is being coveted by The Walt Disney Co. and Comcast in separate acquisition bids.

At issue is the financial and editorial independence of Sky News, one of the largest news channels in the United Kingdom.

Matt Hancock, U.K. Cultural Secretary, disclosed that Disney had agreed to operate and maintain an editorially independent Sky News branded news service for 15 years rather than 10 years. It also agreed to not sell Sky News for 15 years without the consent of the government.

Disney and Fox also agreed to increase annual Sky News funding by £100 million ($132 million) – which amounts to nearly $2 billion over the course of the agreement.

“In my view, these revised undertakings meet the criteria that I set out to the House on 5 June and will help to ensure that Sky News remains financially viable over the long term; is able to operate as a major UK-based news provider; and is able to take its editorial decisions independently, free from any potential outside influence,” Hancock said in a statement.

Public input on the proposed merger is open until July 4.

U.K. Government Approves Fox, Comcast’s Competing Sky Bids

The British government June 5 officially removed regulatory objections to 21st Century Fox’s $15.5 billion bid to acquire shares of satellite TV operator Sky it doesn’t already own. It also cleared the way for a rival $31 billion bid by Comcast for control of Sky.

U.K. Cultural Secretary Matt Hancock told Parliament the Comcast offer did not raise public interest concerns, adding, “I can confirm today that I will not be issuing an intervention notice.”

Comcast, like Fox, has agreed to guarantee editorial independence for Sky News with a 1o-year financial support commitment.

Regardless of whether Fox outbids Comcast for Sky, it has agreed to sell 20th Century Fox Film — which includes Sky — to The Walt Disney Co. for $52 billion in a primarily stock transaction. Comcast is contemplating a separate $61 billion cash offer for 20th Century Fox, which also includes 20th Century Fox Home Entertainment.

Fox corporate, which is controlled by Rupert Murdoch and his son Lachlan, issued a statement lauding the U.K. government’s decision.

“[Fox] welcomes today’s announcement by the Secretary of State for Digital, Culture, Media and Sport that … has cleared [our] proposed acquisition of the remaining shares in Sky on broadcasting standards, as recommended by the Competition and Markets Authority (“CMA”),” said the media company.

Sky, in a statement, said the Fox’s decision to support editorial independence for its news division provided a “good starting point” to overcome the adverse public interest effects of the proposed merger.

It also applauded Parliament’s approval of Comcast rival offer.

“The Independent Directors of Sky are mindful of their fiduciary duties and remain focused on maximizing value for Sky shareholders,” said the company.

Sky’s Cycling Dilemma

NEWS ANALYSIS — Chris Froome, racing for the $40 million Team Sky professional cycling team sponsored by the British satellite pay-TV operator, May 27 won his third straight Grand Tour stage race, finishing first overall in the Giro d’Italia (Tour of Italy) that began in Jerusalem and ended three weeks later in Rome.

For Froome, who has won four Tour de France races, in addition to last year’s Vuelta a España (Tour of Spain), victory came May 25 after a jaw-dropping win into Bardonecchia that saw the South African-born rider erase a seemingly insurmountable three-minute, 21-second deficit in the overall standings to take the lead for good.

The win brought back bad memories of American Floyd Landis’ similar performance in 2006 when he overcame a significant time gap to vanquish his Tour de France rivals on the next-to-last stage.

Landis was eventually stripped of the win after testing positive for performance-enhancing drugs — leading to a chain of events that would ultimately bring down his former teammate Lance Armstrong on similar charges.

Froome and Team Sky are supposed to be different than Armstrong’s heavy-handed squads of the early 2000s that pushed systematic doping to the extreme.

Founded in 2010, Team Sky has dominated professional and Olympic track cycling with a mandate of clean racing. It is a bragging right of sorts for corporate parent Sky, which eyes the team’s “inspiration and participation” as grounds for its massive marketing spend.

But it remains to be seen how much longer Sky — which has first-run distribution deals with major Hollywood studios, direct-access to Netflix and includes DVDs with electronic sellthrough purchases on the Sky Store platform — will support the team financially at it sits in the merger crosshairs of The Walt Disney Co., 21st Century Fox (which owns 39% of Sky), and Comcast.

And money is hardly the issue.

Team Sky’s dominance has produced increasing naysayers, who contend its results are due to exploiting loopholes within doping rules.

Indeed, Froome, a well-documented asthmatic, often uses inhalers during competition. But apparent misuse of inhalers contributed to Froome testing positive for illegally high levels of an asthma drug during last year’s Vuelta.

The case is under review by cycling’s governing body. Should Froome be found guilty, he would be suspended and stripped of the Vuelta win, and likely the Giro as well.

Without its marque rider, Sky would probably drop its sponsorship.

But in the meantime, Froome keeps racing. As does Team Sky, whose Columbian rider Bernal Gomez recently won the Tour of California.

“My conscience is clear,” said Froome in Rome.

Amazon Prime Video U.K. Grew Faster Than Netflix in 2017

Amazon Prime Video grew its subscriber base 11% in the United Kingdom in 2017, compared to 9% sub growth for rival Netflix, according to recent data from ratings firm Broadcasters’ Audience Research Board (BARB).

The firm said Prime Video ended the year with 4.3 million subs, compared to 8.1 million for Netflix. Prime Video ended 2016 with 3 million subs, compared to 6.5 million for Netflix.

Prime Video, which is included in the annual Prime membership, together with Netflix and Now TV accounted for 10.2 million combined subscribers – which trails multiplatform pay-TV operator Sky with 12 million subs.

Sky’s broadband-based Now TV has about 1.5 million subscribers.

Rick Broughton, analyst with Ampere Analysis in London, told The Guardian Prime Video has attracted subs by melding enhancements in ecommerce with upticks in original content spending on programs such as “The Grand Tour,” sports rights to ATP Tennis and future “Lord of the Rings” TV series.

“Amazon is making big strides to invest in content, but it is still not close to the extent of the Netflix originals slate and it doesn’t yet have the same brand perception for TV as Netflix does,” Broughton said. “If Amazon continue to invest at the rate they are … bundling it with the general attractiveness of Amazon Prime, there is a good chance they could catch up in the future.”

 

Comcast Makes Formal $31 Billion Bid for Sky

As expected, Comcast Corp. April 25 announced a “pre-conditional superior cash offer” of $31 billion for Sky, the European satellite TV operator headquartered in the U.K. The offer represents a 16% premium on 21st Century Fox’s standing bid for the 61% stake in Sky it does not own.

“We have long believed Sky is an outstanding company and a great fit with Comcast,” Brian Roberts, CEO of Comcast Corp., said in a statement. “Sky has a strong business, excellent customer loyalty, and a valued brand. It is led by a terrific management team who we look forward to working with to build and grow this business.”

Comcast eyes Sky’s 23 million subscribers in the U.K, Italy, and Germany, and history of strong financial performance. Roberts said Sky would help expand Comcast’s international footprint in the U.K. and Western Europe.

“The combined customer base of approximately 52 million will allow us to invest more in original and acquired programming and more in innovation as we strive to deliver a truly differentiated customer experience,” he said.

Comcast, like Fox, said it intends to safeguard Sky’s editorial independence by maintaining fiscal support for Sky News for 10 years, establishing an editorial Sky News board; keeping Sky’s U.K headquarters in Osterley for five years; and not acquiring any majority interest in U.K. newspapers for five years.

In a move aimed at competing with Netflix and Amazon Prime Video in the U.K., Comcast said it would increase investment in U.K. film and TV production and maintain support of Sky’s technology hub in Leeds, among other actions.

Comcast, which owns NBC Universal and DreamWorks Animation in the United States, contends owning Sky would create a media conglomerate better equipped to compete in a rapidly changing and highly competitive industry.

“Together, the companies would be well positioned to drive growth to provide attractive returns to Comcast shareholders and to benefit the employees and customers of both organizations,” Comcast said in a statement.

Indeed, Sky’s board of directors issued an April 25 statement withdrawing its recommendation to shareholders to support Fox’s Dec. 15, 2016 offer. It said it was also terminating the co-operation agreement with Fox – which said it would respond shortly to the Comcast offer.