September 6, 2010 / 12:45 PM / 9 years ago

UPDATE 1-Sky Deutschland has enough cash mid-term-CEO

* Sees sustainable business in three years

* Proceeds from cash hike will suffice

* Improvement in business likely in H2 2011

(Adds CEO comment, detail, background)

By Nicola Leske

BERLIN, Sept 6 (Reuters) - Loss-making German pay-TV broadcaster Sky Deutschland SKYDn.DE is unlikely to need another capital increase in the mid-term as it aims to become a sustainable business within three years, its CEO said on Monday.

“Will we need more money going forward? If we got the base plan right, if we got the strategic plan right, no we won’t,” Chief Executive Brian Sullivan told reporters in Berlin.

“Are we looking at a sustainable business over a 2-3 year period? We absolutely are,” he said.

Sullivan, a former BSkyB BSY.L executive and veteran of the pay-TV industry, took the helm at Sky Deutschland on April 1 this year and is the third new CEO in four years.

Last month, Sky Deutschland said it plans to raise at least 340 million euros ($438.2 million) through a combination of a rights offering and a bond issued to its largest shareholder News Corp (NWSA.O) and/or a loan provided by the U.S. company.

News Corp, which also has a stake in British BSkyB and owns Sky Italia, currently has a 45.42 percent stake in Sky Deutschland and through the measures planned could increase it to 49.9 percent.

Munich-based Sky Deutschland, formerly known as Premiere, has launched seven capital increases since it went public in 2005.

“If we need more capital it will either be that one of our assumptions was wrong or that there was an investment decision that came in front of us that we hadn’t anticipated,” Sullivan said.

In the past, Sky Deutschland has tapped the market for extra cash to enter the auction for the rights to broadcast premier league soccer but Sullivan said bids for the next auction, which could begin as early as 2011, were factored into his business plan.

ACCELARATION EXPECTED

Sky Deutschland also cut its outlook last month, scrapping the goal to become profitable by 2011. Sullivan again declined to give a profit target or a subcriber target.

“I definitely expect to see an improvement in 2011 versus 2010, at the very least in the second half of the year when we have fully deployed the parts of our business plan,” Sullivan told Reuters.

“I would expect a rapid acceleration in the following year,” he added.

Sullivan, a native of Philadelphia and former promotions manager for the Phillies baseball team, said he was taken by surprise at the depth of problems at Sky Deutschland.

“The scale of the challenges here was bigger than I thought,” Sullivan said.

Sullivan also said that in his opinion Sky Deutschland rarely managed to deliver on its promises and did not take into account what its customers wanted.

“The reality is that the numbers didn’t live up to expectations and that has become the problem with Sky,” he said.

Sullivan now hopes that more exclusive content across a number of devices, including cell phones and tablets such as Apple’s APPL.O iPad, will lure more consumers to subscribe to Sky’s services.

Sky Deutschland is in talks with cable companies as well as others, such as Sony (6758.T), about partnerships although Sullivan said negotiations with Sony were still at a very early stage.

Sky Deutschland’s main draw are live Bundesliga soccer matches. It also broadcasts Hollywood movies, documentaries, drama, TV series and pornography. (Editing by David Cowell)

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