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Daily ShareChat: Sky Network Television

By Jenny Ruth

Thursday 15th April 2010

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 Jenny Ruth

Sky Network Television's confirmation of its five-year extension of broadcast arrangements with the SANZAR rugby unions for 2011 to 2015 was expected due to its buying power, its about 800,000 customer base and its relationship with News Corp, says ASB Securities analyst David Boyce.

Sky has the rights to the Super 15, Tri-Nations, mid-year tests between the All Blacks and Northern Hemisphere teams, all inbound tours to New Zealand, Australia and South Africa, including the Lions tour of Australia in 2013, South African domestic competitions and the ITM Cup.

Boyce says adding a Melbourne-based franchise to the previous Super 14 has enabled Sky to make changes to the format.

"The benefits for Sky are two-fold. 1/ There are more weeks of rugby in the year, hence fewer weeks when rugby fans would consider churning, and 2/ the derby games (NZ teams playing each other) rate much higher than the games against non-NZ teams, so having a double round of derby games improves the product for Sky's rugby-watching customers."

Boyce says Sky's equity story remains compelling with its big value drivers being subscriber growth and average revenue per customer growth. "Sky stimulates those value drivers by enhancing the product with MySKY Hdi being the latest iteration of this ongoing product improvement."


ASB Securities' Investment rating: outperform.



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