News Corp (
) is a media conglomerate that competes with New York Times (
), Time Warner (
), Disney (
), Viacom (
) and CBS (CBS) in a variety of businesses ranging from
broadcasting and cable networks to filmed entertainment and
price estimate for News Corp's stock stands at
, which is about 23% above the current market price. While News
Corp's value is primarily derived from its media networks, studios
and publishing business, approximately 5% can be attributed to
satellite-based pay-TV service (DBS).
The company is further looking to strengthen its satellite
pay-TV service with the proposed acquisition of British Sky
Broadcasting Group (BSkyB) where the company currently has an
equity stake. News Corp has made a bid of close to $12 billion for
acquiring remaining 61% and this could increase the value
contribution that satellite pay-TV service brings to the company's
News Corp engages in the satellite-based pay-TV business
primarily through its subsidiary SKY Italia. SKY Italia distributes
over 180 channels of basic, premium and pay-per-view programming
services via satellite and broadband directly to subscribers in
Italy. The company has a little under
5 million subscribers
as of now which represents close to 30% of households in Italy. We
estimate that DBS services account for around 5% of News Corp's
This chart shows News Corps subscriber base for its DBS
service via SKY Italia.
Should the acquisition of BSkyB go through, there are concerns
that News Corp might have too much influence on news sources
threatening media plurality in the UK as it already owns major
newspapers in the UK such as The Times, The Sun and Wall Street
While this deal would expand News Corp's presence in the UK and
Europe and grow its satellite business, we do not feel it will
impact the stock given DBS small contribution to its value.
Let us know your thoughts by commenting on the box below.
You can see
the complete $20.17 Trefis price estimate for News
Corp's stock here.