In a major shakeup of the European television market, German broadcast giant RTL Group has signed a deal to acquire pay-TV group Sky Deutschland from Comcast.
The deal includes a €150 million ($176 million) upfront payment plus a variable component of up to a maximum of €377 million ($442 million), with the actual sum determined by RTL‘s share price, if it ranges between €41 and €70. Comcast can trigger the variable payment at any time within five years.
The agreement, announced by RTL parent Bertelsmann on Friday, is still subject to regulatory approval, but if it passes muster, it could mark a seismic shift in the European TV and streaming landscape. By combining Sky’s subscribers across Germany, Austria and Switzerland with RTL’s own premium RTL+ service, the company can boast of a streaming service reaching 11.5 million paying subscribers, leapfrogging Disney to become the third-biggest provider of streaming services in Germany after Netflix and Amazon Prime.
Bertelsmann and RTL CEO Thomas Rabe called the deal “transformational” in his company’s strategy of creating “national media champions” to compete with global streaming behemoths.
“Following this transaction, Germany will once again be our largest market,” said Rabe, “At the same time, this acquisition is a step on the path toward strengthening European media markets – an absolute necessity in the competition with global tech and streaming platforms.”
The purchase gives RTL access to Sky’s premium sports rights, including Bundesliga and Premier League soccer, and Formula 1 motor racing, as well as Sky’s WOW streaming service.
Sky Deutschland reported around €2 billion ($2.34 billion) in annual revenue last year, but the company has never made a profit. With the launch of HBO Max in Germany next year, Sky will also lose its position as the exclusive provider of HBO content in German-speaking territories. RTL is believed to have approached Comcast on the deal. Comcast is not thought to be planning a sale of its other European operations, in the U.K./Ireland and Italy.
Rabe has tried to bulk up national operations in France and the Netherlands, only to be blocked by competition authorities. In 2022, Bertelsmann dropped a planned merger between RTL’s French network M6 and France’s leading commercial broadcaster TF1, amid stiff regulatory opposition. Last week, TF1 instead teamed up with Netflix, signing a landmark carriage agreement deal to stream all of its TV channels on the platform.
In 2023, antitrust watchdogs in the Netherlands rejected RTL’s bid to buy the Dutch Talpa Network and merge it with RTL’s television operations there. In a separate announcement on Friday, RTL confirmed that the national competition authority has approved its deal to sell its Dutch operation to Belgium’s DPG Media. RTL expects the €1.1 billion ($1.3 billion) deal to close on July 1.
RTL is hoping there will be less regulatory opposition to the Sky deal, since the merged group would not be a dominant force in the streaming sector.
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