This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Amazon is continuing its dominance in media. The ecommerce giant is one of many companies bidding to buy 21st Century Fox's 22 local sport channels.
Fox has recently merged with Disney as part of a blockbuster $71.3 billion deal. As part of an agreement with the US Department of Justice, Disney must divest itself of its purchase of Fox's regional sport channels. Some of the properties include the YES network, which airs the games of the US baseball team, the New York Yankees. Amazon is in a competition with other corporations to purchase the channels.
Success with Amazon Prime Video
Amazon has acheived major success with its Prime Video streaming service. The online TV division had commercial and critical success with shows like 'The Marvelous Mrs. Maisel'. Now the corporation wants to delve further into TV by purchasing sport channels.
Amazon already has the rights to English Premier League matches and American football games. Now the online retailer wants to purchase Fox’s sport channels to increase its Prime membership numbers by adding more fans of athletics.
The competition to buy the channels among media companies could drive the price for the networks up to $20 billion.
BTIG analyst Rich Greenfield noted that Amazon purchasing sport networks could be a profitable addition to the online retailer’s acquisitions.
‘Sport is also the only content that is holding its audience viewership-wise and in turn supporting the $70 billion TV ad industry,’ wrote Greenfield.
Loyal sport fans could be the key to adding more viewership to Amazon Prime’s membership. Online viewers of American football coverage have increased the streaming service's numbers by 22%.
How Amazon could change sport broadcasting
Amazon could change the future of broadcasting with its purchase of Fox’s sport networks. The online company could bring in younger viewers that have cut the cord to cable service. However, the corporation buying the TV properties could be ignoring a larger number of viewers that are used to traditional cable networks to watch games.
Amid all the speculation about the ecommerce behemoth, there is a still a possibility that Fox could just buy the networks back from Disney. Executives in the media industry will still eagerly await Amazon's next move.
.jpg)
