Sky enjoys growth spurt as it readies football bid

Once again Sky will be head-to-head with its new rival, BT Sport

Sky signed up more new customers in the final three months of 2014 than in any quarter for the past nine years, the company said yesterday, as it finalises a bid for the next round of Premier League football rights.

The broadcast giant, which completed the takeovers of sister businesses in Germany and Italy in November, also reported a better-than-expected 16 per cent jump in first-half profits to £675m.

“Our first set of results since our acquisitions of Germany and Italy – even though it’s early days – gives us great confidence in our strategy,” said Jeremy Darroch, the chief executive. “Revenues are up 5 per cent and churn is down to its lowest levels for decade.”

Mr Darroch was tight-lipped on Sky’s likely bid for the next three seasons of live Premier League football, which is to go ahead as planned after Ofcom yesterday rejected a bid from Virgin Media to halt the process. The broadcast regulator said that it would continue to investigate Virgin Media’s complaint about how the league sells TV rights to matches.

Once again Sky will be head-to-head with its new rival, BT Sport. But with talk that new bidders Discovery (the owner of Eurosport) and beIN (the former Al Jazeera sport) entering the auction, whose deadline is Friday, there has been speculation that the cost could soar from £3bn to more than £4bn.

Mr Darroch said: “I am not going to speculate on the process. The Premier League is important to us but the business is now so much more than that. We are well-prepared for the auction and have our strategy in place.”

Paul Richards, an analyst at Numis, expects Sky to have to pay about 40 per cent plus more to retain its current package of rights, which currently cost it £760m a season.

To emphasise the way Sky has diversified, Mr Darroch highlighted its new Arctic crime show, Fortitude, almost certainly the broadcaster’s single-biggest investment in drama. Industry sources suggest Sky spent about £25m making the drama, which stars The Killing’s Sofie Grabol with Sir Michael Gambon and Christopher Eccleston.

“Already more than two million people in the UK have seen it,” said Mr Darroch. “We have invested a lot in it. But at the same time, with the simultaneous launch in Germany and Italy, we can spread the costs further. At the same time we have sold it to a record 13 international broadcasters.”

Sky’s first-half revenues rose 5 per cent to £5.6 bn and the interim dividend is raised 3 per cent to 12.3p a share.

In the UK and Ireland Sky attracted 204,000 new customers in the final quarter. Sky Italy gained 30,000 for its best quarter in three years while Germany and Austria saw a quarterly gain of 214,000.

Shares in Sky rose 12.5p to 955.5p.

Comments