Sky-Tiscali Talks Founder on Price

23 December 2008

LONDON: No-one but no-one bests Rupert Murdoch when it comes to haggling over price (except, possibly, his barber). That lesson was learned the hard way last weekend by Sardinia-based internet and telco giant Tiscali.

Anxious to dispose of its UK operations, Tiscali has for several months been engaged in negotiation with NewsCorp's UK satellite monopoly BSkyB, which also operates as the UK's fourth largest ISP.

The talks kicked-off with the classic bargaining stances: seller high, buyer low. At the outset, fingers crossed behind its back, Tiscali floated the sum of £600 million ($891.24m; €642.34m). Over time this dwindled to around £450m.

But as the words waxed, so Tiscali's numbers waned and by the end of September its subscriber base had fallen from 1,838,000 to 1,774,000. Sky on the other hand saw its own subscription tally rise to 1,792,000.

Last week the wax/wane differential imploded leaving Tiscali seeking a last minute white knight. And Sky is now humming a very different tune.

Just two weeks back, Sky's cfo Andrew Griffith told media industry analysts that the deal could have "value" as it would enable Sky to target people who do not want – or cannot have – a  satellite dish.

Neither party was prepared to comment on the reasons for the breakdown, although a key factor is believed to be the high costs involved in integrating the merged operations.

Data sourced from; additional content by WARC staff