Sky’s Soho channel will be re-branded HBO as part of the deal.

Sky told the Herald there would be no price changes.

In audience terms, it’s a win for Sky.

In commercial terms, Sky said in an NZX filing, “The nature and timing of the new agreement will see Sky recognising a one-off, non-cash acceleration of programming amortisation of $6-$7m, and, at the same time, Sky will receive a cash payment of $4-$5m from WBD for prepaid content at the October 30 2024 launch date.”

Why is WBD making a payment to Sky?

“The new agreement meant the original deal ended earlier than originally intended – and, as a result, at the date of launch there will be some content that we’ve paid for but won’t have played out,” a Sky spokeswoman said.

“The payment is in recognition for this, with the exact amount to be finalised post-launch, once the schedules have been finalised and agreed. Under the new agreement, customers will have access to that content but because it’s a new agreement we needed to recognise the change from an accounting perspective.”

“This strategically significant agreement also delivers for our investors, having been secured on improved commercial terms, aligned to our stated targets,” Sky TV chief executive Sophie Moloney said.

“This agreement will generate a free cashflow upside in H1 FY25, with the finalised financial impacts to be flowed through at the half year.”

Sky TV said in a July 2023 NZX filing that it had renewed a multi-year deal with Warner Bros Discovery that included HBO content. Its filing did not address exclusivity.

There was a hint of the partnership to come with a Warner Bros Discovery spokeswoman telling the Herald the deal included “provision to retail Max on Sky platforms”.

Warner Bros Discovery subsidiary HBO launched Max in a bid to replicate the direct-to-consumer success of Disney+.

Disney pulled most of its content off Sky (and its peers around the world) after launching its direct-to-consumer app in late 2019.

In the golden era of satellite and cable, local players like Sky TV were the only conduit to a paying audience.

In the age of broadband, which cuts out the middle man in delivery terms, the likes of Sky TV play the role of aggregators, offering an audience and a single big payment that can potentially outweigh what the likes of HBO would earn from selling a streaming service such as Max directly to Kiwi consumers.

Sky faces another direct-to-consumer app challenge as it negotiates with NZ Rugby in contract renewal talks expected to wrap up by year’s end.

A key issue will be whether the union’s new NZR+ streaming will show live games – and if so how many, and how high-profile.

On the flipside, non-exclusivity would reduce the amount that Sky pays NZR for rights.

Sky TV shares closed up 1.1 per cent to $2.76 yesterday.

The stock is up 0.4 per cent year-to-date.

The firm’s shares came under pressure in August after it reported a drop in full-year profit – but also an increase in its dividend.

Moloney said it was ontrack to boost the profit payout to 30 cents per share by 2026 and the stock has since recovered.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.