The satellite broadcaster BSkyB dumped Goldman Sachs as its house broker yesterday, just weeks after the US bank launched an unsuccessful bid to buy one of Sky's biggest rivals, ITV.
The move also came just a month after research analysts at Goldman published a report that was highly sceptical about Sky's ambitions to enter the broadband market - its major new strategy. The note said: "The concern that broadband could be another area where short-term cash delivery to shareholders is sacrificed for longer-term returns is pertinent."
Goldman has enjoyed a long-standing relationship with Rupert Murdoch's Sky. It was one of the banks that floated the company in 1994 and, until two years ago, Goldman's ex-president John Thornton sat on the company's board. As well as broker, it has acted as Sky's financial adviser.
Hank Paulson, Goldman's chief executive, recently warned his staff that the aggressive tactics of the bank's private equity arm were in danger of damaging Goldman's reputation and its relationship with clients. Some suggested yesterday that the failed ITV bid could be an example of Goldman's private equity ambitions leading to a client, Sky, questioning whether to continue to use the bank.
Goldman, which declined to comment, has been replaced as Sky's broker by its US competitor Merrill Lynch. A Sky spokesman denied that there had been a rift with Goldman and said that the decision had come from a review it had conducted of its advisers. "We have a fruitful relationship with Goldman. They will continue to act as financial adviser to the company," the Sky spokesman said.
However, in Sky's most recent transaction, the acquisition of the broadband provider easyNet late last year, the company used Lazard and Morgan Stanley as its financial advisers.
Separately, the media regulator Ofcom demanded yesterday that Sky's controversial charges to carry channels from rival broadcasters be made more transparent and more clearly related to its costs.
The move, in a draft Ofcom ruling, is likely to mean the loss of tens of millions of pounds in revenues for Sky, according to some analysts. It is positive for ITV in particular, which has complained loudly about the £17m a year that it is made to pay for its channels to be carried on the Sky service.