Game of Thrones helps Sky report strong surge in earnings

Game of Thrones has become the most watched series ever on Sky

Josie Cox
Business Editor
Thursday 12 October 2017 08:09
Comments
160,000 new customer joined Sky in the last quarter
160,000 new customer joined Sky in the last quarter

Pay TV company Sky, which Rupert Murdoch is trying to snap up in an almost £12bn deal, has reported strong earnings for the first quarter of its financial year, helped by the tremendous popularity of cult series Game of Thrones.

The company on Thursday said that it had increased revenue by 5 per cent over the same period a year earlier, to £3.3bn, and that 160,000 new customer had joined during the period. That represented an increase of 51 per cent on the same quarter in 2016.

Core earnings rose by 11 per cent to £582m.

Jeremy Darroch, Sky's chief executive officer, said that “against the backdrop of pressure on consumer spending and lower spend on UK television advertising” the group was particularly pleased with its core earnings growth in established businesses.

He noted that Game of Thrones had become the most watched series ever on Sky during the most recent quarter.

Customer viewing on Sky pay channels was up 10 per cent and the quarter also saw Sky launch in Spain and Sky Sport’s streaming service launch in Switzerland.

Going forward, the company said that it would be increasing investment in Sky Originals by 25 per cent this year, which means that it would be showing four new dramas each quarter.

At the end of September, Karen Bradley, the Secretary of State for Digital, Culture, Media and Sport, referred the 21st Century Fox’s bid to control the whole of Sky to the Competition and Markets Authority on public-interest grounds.

The CMA now has six months – until 6 March – to report back to Ms Bradley with its recommendations.

In March this year Mr Murdoch’s company formally notified the European Commission that it was bidding nearly £11.7bn for Sky.

If successful, the deal would strengthen the position of James Murdoch – who is both chief executive of Fox and chairman of Sky – in his father’s media empire.

But several shareholder groups have in recent days said that they think James Murdoch should no longer be chairman on Sky.

“We continue to believe that James Murdoch’s position as chairman is inappropriate, and that minority shareholders at Sky would be better served by a truly independent chairman,” Ashley Hamilton Claxton, corporate governance manager at investment company Royal London Asset Management, which owns a stake in Sky, said earlier this week.

“Independent oversight of the board is particularly important given Fox’s ongoing bid to acquire Sky,” she said. She added that Royal London would be voting against Mr. Murdoch’s re-election as chairman at Sky’s annual general meeting happening on Thursday.

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