Tell me about their sky acquisition, how much ebitda they paid?

Comcast’s acquisition of Sky in 2018 is one of the most heavily debated deals in media history, primarily because of the massive premium Comcast paid to win it.

Here is a breakdown of the transaction, the bidding war that drove up the price, and the exact EBITDA multiples involved:

The Bidding War

In 2018, Sky was the crown jewel of European media. It was the largest pay-TV and broadband provider across the U.K., Germany, and Italy, boasting highly valuable exclusive sports rights (like the English Premier League).

Rupert Murdoch’s 21st Century Fox already owned 39% of Sky and wanted to buy the rest. Disney, which was in the process of buying Fox's entertainment assets, also desperately wanted Sky's direct-to-consumer footprint in Europe.

What followed was a fierce, blind-auction bidding war orchestrated by U.K. regulators between Comcast and Fox/Disney.

The Final Price and EBITDA Multiple

Comcast ultimately won the auction with a knockout bid of £17.28 per share. This valued the total transaction at roughly £30.2 billion (nearly $39 billion USD) in pure cash.

Because the bidding war pushed the price so high, the valuation multiples were staggering:

• The Forward EBITDA Multiple: Comcast paid roughly 15 times forward EBITDA for Sky.
• The Trailing EBITDA Multiple: Based on Sky's 2017 adjusted EBITDA of roughly £2.25 billion, Comcast's final price represented more than 17 times trailing EBITDA.

Why Wall Street Reacted Poorly

When the final price was announced, Wall Street analysts downgraded Comcast, and its stock temporarily dropped. Here is why the financial world was spooked by that 15x multiple:

1. Massive Overpayment: At the time in 2018, standard U.S. cable and telecommunications assets were trading at roughly 10 times EBITDA. Paying 15x for a traditional satellite and broadband provider was viewed as an incredibly steep premium.
2. The Cord-Cutting Threat: Investors were worried that Comcast was paying a premium for a European satellite TV business just as the global trend of cord-cutting and streaming (Netflix, Amazon Prime) was accelerating.
3. The Debt Explosion: Because the $39 billion deal was an all-cash offer, Comcast had to borrow the money. This single acquisition caused their total debt to skyrocket to over $110 billion at the time, forcing them to temporarily halt their shareholder stock buyback program just to focus on paying down the new debt.

Was it worth it?

In hindsight, the Sky acquisition was a mixed bag.

On the negative side, the financial strain was real. By 2022, the macroeconomic climate in Europe (inflation and currency headwinds) forced Comcast to take a massive $8.6 billion noncash impairment charge (essentially writing down the value of Sky because it wasn't generating the cash they originally projected).

On the positive side, Sky gave Comcast a massive footprint of over 23 million European customers overnight, diversified their revenue away from strictly the U.S. market, and gave them the technological foundation (the Sky Q platform) that they now use to power their streaming hardware globally.