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Sky’s ‘bargain’ Premier League rights deal could leave investors wanting more money from Murdoch

Positive investor sentiment today helped Sky shares rise above the proposed Fox takeover price
Sky sports presenters for Football coverage, includes Gary Neville
Sky shares were up 2% on Wednesday

Cheaper than expected Premier League rights have raised hopes that Sky Plc (LON:SKY) could land more money from Fox.

21 Century Fox had agreed to pay £18.5mln to buy Sky, though the fate of the transaction remains in the hands of competition regulators.

Positive investor sentiment today helped Sky shares rise above the proposed Fox takeover price.

READ: Premier League auction sees rights fees cool, so is the rivalry now over for Sky and BT Sport?

At the same time, UBS analyst, Polo Tang reckons that greater profitability within the Sky business - helped by the Premier League savings - could lead shareholders to seek a higher price.

Tang was not alone in this assertion today.

“Sky looks much healthier than when Rupert Murdoch’s 21st Century Fox first bid for the business. In early trading the shares touched £10.95, 20p ahead of the price Fox has agreed to pay,” said George Salmon, analyst at Hargreaves Lansdown.

“This tells us Murdoch might need to come back with an improved offer.”

The Lansdown analyst, meanwhile, speculated on what may come of the two remaining rights packages.

“There’s two packages still up for grabs, but so far Sky is the big winner from the Premier League auction,” Salmon added.

“Securing more games at a lower cost is a major coup, and with BT seemingly content to play second fiddle on the Premier League, that rivalry now looks to have thawed.

“There’s always the chance the remaining two packages spring a surprise, but with reserve prices not yet reached, it’s safe to say Amazon, Netflix and other potential new entrants aren’t prepared to adopt the aggressive strategy Sky execs must have feared.”

Sky & BT Sports to pay £4.46bn in latest rights auction

It was revealed late on Tuesday that Sky and BT Group plc (LON:BT.A) had agreed to pay a total of £4.464bn to secure the broadcast rights for Premier League football games to show 160 games a season from 2019/20 until 2021/22. The amount is less than what the two broadcasters paid in the last bid – when they forked out a total of £5.136bn to screen 168 games.

Sky will show a total of 128 matches per season, which is two more than under the previous package, while BT will screen 32 games, down from the 42 secured previously.

Five of the seven live packages have now been awarded.

Bidding for the remaining two are ongoing. According to Premier League that the two live packages has attracted “interest from multiple bidders.”

"We are extremely pleased that BT and Sky continue to view the Premier League and our clUBS as such an important part of their offering," Premier League Executive Chairman Richard Scudamore said in a statement late Tuesday.

"Both broadcasters are fantastic partners for the Premier League and have a track record of making our competition available to fans across the country through their high-quality and innovative programming.

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