Sky Network Television shares dropped to their lowest level in more than 18 years after a report that global internet giant Amazon is making a play for New Zealand’s rugby broadcasting rights, a key drawcard for the pay-TV operator.

The shares fell as low as $2.58, the lowest since January 1999 and before the merger with former cornerstone shareholder Independent Newspapers Ltd.

The stock was recently down 7.5 per cent, or 21 cents, to $5.59, on a day that holders lost the rights to a 12.5 cents-per-share dividend.

The Auckland-based company has been under pressure this year to address sinking subscriber numbers at a time when online streaming video offerings such as Netflix are seen as a cheaper alternative to Sky’s service.

One of the major pieces of value seen as protecting Sky’s customer base has been its retention of rugby broadcast rights and a production team that would be hard to replicate.

The New Zealand Herald reported this weekend that Amazon is likely to compete for the next round of rugby broadcast rights from 2021 via its Prime Video streaming service.

“There’s continuing uncertainty over the long-term prospects for Sky TV,” said Grant Williamson, a director at Hamilton Hindin Greene in Christchurch. “I think analysts have almost given up on them.”

While ownership of premium sporting content has been a boon for Sky it also proved an obstacle to its proposed merger with Vodafone, a move it says is a response to the changing media environment.

The Commerce Commission eventually shot down the $3.44 billion deal on concerns that a combined group’s premium sporting content could be bundled into a single mobile, landline, broadband and pay-TV offering.