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Sky Bet sold - What next?  
Sky Bet Sold
by Images_of_Money
Sports fans and punters alike won't notice this for a while to come but, earlier in December, Sky sold their controlling interest in Sky Bet in a deal valuing the business at £800 million. Punters and TV addicts alike will be none the wiser because, as part of the deal, the buyers, private equity firm CVC Capital, have signed an agreement which allows them to retain the Sky branding.

CVC have acquired 80 per cent of the business for an initial £600 million with media giant Sky retaining a 20% stake as well as a seat on the board.

Sky's move is eye-catching, as far as the gambling industry is concerned, in that it bucks the current trend. Global gaming revenues are buoyant on the back of the rapid take up of smartphone gaming and the potential of rapidly developing markets - particularly in Asia and the Far East. On the face of it, Sky are giving up a seriously lucrative asset.

Seen from the perspective of Sky's core business, however, the move is more readily explained. The convergence of digital technologies - internet, TV, and telephony - as illustrated by BT's move into sports broadcasting - is forcing Sky to focus its attention on developing what is known as "quad-play" packages (integrated pay TV, broadband, mobile and landline). In sum, Sky's foray into the betting arena looks like a punt that has only partially paid out.

It is understood that the company will use the cash to pay down debts as a precursor to any more progressive moves.

Sky Bet was formed in 2001 and its branded offerings extended to casino gaming operations, Sky Vegas, Sky Casino, Sky Poker and Sky Bingo in addition to its core sports betting operation.

The inevitable question that arises is what CVC have in mind for such a prominent - not to say pricey - brand.

For example, at the time of writing, SkyBet's branding dominates the industry overview website It would be unusual for venture capitalists to retain ownership and management of the brand for a sustained period - that simply isn't in the nature of the beast.

However, the fact that they had previously made serious moves towards acquiring the Betfair gambling group for a notional £1 billion points to a serious and committed commitment to the gaming industry.

Sky announced as part of the publicity surrounding the sale that the current management and workforce would remain in place in their Leeds base.

It is too early to tell what the full implications of the deal might be, although in the short term there are a number of contractual obligations to which the brand is pre-committed. Not least of those is the sponsorship package relating to the Football League. In accord with the original agreement that will run until the end of the 2015/16 season.

Rob Lucas, Managing Partner of CVC, said: "The partnership between CVC and Sky will provide a strong platform to support SkyBet's ongoing success at this exciting point in its development."

.What that means for Sky Bet's clients and competitors remains to be seen.

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