I can confirm that Lightbox Sport no longer exists. It was a...

I can confirm that Lightbox Sport no longer exists. It was a short-lived joint venture that never really got any traction.

The brains behind Lightbox Sport was a chap called Tim Martin. By all accounts he (and his brother Neil) are really switched on...

Tim and Neil just sold their latest venture (RugbyPass) to Sky for US$40M. This deal has provided Sky with an opportunity that could dwarf its current local subscription base - a global reach to worldwide rugby fans.
RugbyPass has rights to stream rugby in 62 countries. They avoid the markets where rugby rights have been bid up too much (UK, South Africa, Aussie, NZ etc). Of the 62 countries they currently service, they estimate there are over 100 million rugby fans. Of those potential fans, they reckon that ultimately there could be anywhere between 3 - 5 million fans that would be prepared to pay $US15/month for their service.

Let's say they got 3 million fans...and US$15 = approx NZ$23...that would equate to N$828,000,000 of revenue. And low content costs...

Part of the deal included Sky TV providing the RugbyPass owners with 5% equity of Sky. At the time Sky shares were valued at approx $1.20/share (undervaluing the company significantly in my view). Usually I hate the idea of issuing equity to fund acquisitions when SP is below intrinsic value. In this case I think it was still a good deal though. My reasoning is as follows:

1. If we only offered a cash deal either RugbyPass would have walked away since they still want to be involved with the company as owners (they are bullish on future prospects - especially now that they have an experienced partnership with Sky) OR Sky would have had to pay significantly more cash to get it.
2. As Tim and Neil still have significant skin in the game, it is awesome that they are now part of the Sky TV family and motivated to work just as hard as they were working before the deal. We are lucky to have them on board - Tim is Managing Director for RugbyPass and Neil is CEO. Rugby is growing significantly in other part of the world - especially Eastern Europe and Asia - yet the content rights are dirt cheap at the moment in these locations. Watch this space!
3. As stated earlier, the potential upside for RugbyPass is truly extraordinary. If the service goes from strength to strength, nobody is going to look back and whinge that part of the deal included 5% of undervalued shares.