RTL Group is set to acquire the Sky Deutschland business from Comcast, marking a significant shift in the German television landscape. The transaction combines Sky’s premium sports rights, including Bundesliga, Premier League and Formula 1, with RTL’s leading entertainment and news brands across free and pay television channels and the RTL+ online service. It also unites the fastest growing streaming offers in the German market, RTL+ and WOW. This move further consolidates RTL Group’s position in the German media market as it strengthens its portfolio of free-to-air and streaming services.
The acquisition of Sky Deutschland is the largest transaction for RTL Group since its inception in 2000. The upfront purchase price of €150 million seems like something of a bargain, with additional variable cost linked to future value creation. It is expected to produce synergies, read cost savings, of around €250 million per annum within three years after closing.
Bear in mind that Comcast acquired the entire Sky business, including the United Kingdom and Ireland, Germany, and Italy, for $39 billion in 2018.
The transaction is subject to regulatory approvals, and is expected to close in 2026. The two businesses will continue to operate independently until then.
The combination of RTL Deutschland and Sky Deutschland, which operates across Germany, Austria, and Switzerland, will create an expanded proposition in entertainment, sports and news across free and pay television, and online, with 11.5 million combined subscribers across RTL+, Sky and WOW.
Barny Mills, the Sky Deutschland chief executive, will continue to lead the Sky Deutschland business until the transaction is completed. Stephan Schmitter will stay in his current role as chief executive of RTL Deutschland until closing of the transaction and then lead the combined company. RTL Deutschland will remain based in Cologne and Sky Deutschland in Munich.
Under a separate trademark license agreement, RTL will have the right to use the Sky brand in Germany, Austria, Switzerland, Luxembourg, Liechtenstein and South Tyrol. RTL will acquire Sky Deutschland’s streaming brand “WOW” as part of the transaction.
“The combination of RTL and Sky is transformational for RTL Group,” said Thomas Rabe, the chief executive of RTL Group. “It will bring together two of the most powerful entertainment and sports brands in Europe and create a unique video proposition across free TV, pay TV and streaming.” He said that RTL and Sky will be in an even stronger position to invest in people, content and technology in Germany and in Europe to compete with the global tech and streaming players.
Dana Strong, the group chief executive at Sky, said: “Sky Deutschland has made significant progress over the past three years, delivering strong operational performance and reaching a record number of customers. The business is on track to achieve EBITDA break-even, reflecting the success of our turnaround plan. Combining the strength of our brand with RTL builds on that momentum and opens up even greater opportunities. This deal provides a strong platform for long-term success, and ensures Sky continues to share in the growth of the combined business.”
RTL Deutschland owns 15 television channels, more than 10 premium magazines, a broad podcast portfolio and numerous online offerings, including RTL+, with more than 6 million subscribers.
RTL Group will fully acquire the Sky businesses in Germany, Austria, Switzerland, including customer relationships in Luxembourg, Liechtenstein and South Tyrol on a cash-free and debt-free basis. The purchase price consists of €150 million in cash and a variable consideration linked to the share price performance of RTL Group. The variable consideration can be triggered by Comcast, the parent company of Sky, at any time within five years after closing, provided that the RTL Group share price exceeds €41. The variable consideration is capped at €70 per share or €377 million.
The pro-forma revenue 2024 of the combined company was €4.6 billion, with approximately 45 per cent of the total revenue coming from subscription-based revenue.