Sky Deutschland AG, the pay- television operator 45.4 percent-owned by Rupert Murdoch’s News Corp., should be able to reach break-even with the new capital it plans to raise, Chief Executive Officer Brian Sullivan said.
“The plans we put in place basically says this is enough capital that will allow us to make the investments we want to and get us to break even,” Sullivan told reporters in Berlin today.
The company said in August that it will raise at least 340 million euros ($438 million) by selling new shares, and use the cash to expand in high-definition television and invest in innovations and product extensions. The share sale is the seventh for the company, formerly Premiere AG, since it listed on the Frankfurt stock exchange in March 2005.
If the company ever decided it need still more capital, it would be because one of its assumptions “was wrong or there was an investment decision that came in front of us that we hadn’t anticipated,” Sullivan said. “The reality is three years is a long way out, so let’s see.” He said that in three years time, “my guess is we will be a very strong business.”
Sullivan said Sky Deutschland has talked to all of its major shareholders, some funds and most of the banks. “And while every one of those entities keeps their own plans to themselves, they’ve all been very, very positive.”
Sky Deutschland is going out on a roadshow within the next few weeks, after the prospectus has been filed.
Sky Deutschland said Aug. 2 that it expects a full-year loss before interest, taxes, depreciation and amortization. It also expects to post a loss in 2011.
Sullivan plans to turn around the company with the help of three main strategies: delivering high-quality content; ensuring customers can get the content on any device they like, such as mobile devices; and through any platform, whether that is satellite, cable, broadband and mobile.
“Right now we force customers to either take our content in a linear fashion via satellite or cable when the reality is that we are sitting on the rights for all of this fantastic sports, movies and general entertainment content, not just on cable and satellite, but also on mobile, on broadband and even on” Internet TV, Sullivan said.
Sky Deutschland own rights to show German Bundesliga soccer matches, though not via Internet protocol TV and on mobile, where Deutsche Telekom AG has the rights.
Sullivan declined to say whether Bundesliga rights for 2013 will come up for sale in 2011, nor would he say whether Sky Deutschland plans to also bid for the Web TV rights in the next auction.