Sky profits slip on higher football broadcasting costs

Rufina Vignone
Luglio 27, 2017

Revenues were £12.9 billion, showing underlying growth of 5%, while operating profits dipped just 6% to £1.47 billion, even after splashing out an extra £629 million on Premier League rights.

Sky said the drop in operating profit was down to a rise in the cost of broadcasting live Premier League football.

Mr. Murdoch and his family are major shareholders in Fox, Sky and News Corp., the publisher of The Wall Street Journal.

"While churn remains at a level higher than we would like, we have a strong set of plans to address it", Sky said.

"We have driven a 10% increase in revenue on a comparable 52 week basis to £12.9B despite market headwinds", he said. We will be increasing investment in Sky originals by 25 per cent as we build on our track record for producing world-class entertainment.

Sky said it would increase its drama budget this year by a quarter to secure subscribers and would seek to debut four originals on its networks each quarter. We are creating 300 new technology roles to further enhance our capability to deploy in and out-of-home streaming platforms.

The company, which said 4.7 million people watched the first episode of the new Game of Thrones series on Sky, made a similar statement in December when it released its half-year results, suggesting it has failed to stop customers quitting the service for streaming rivals such as Netflix. Loyalty will be recognised and rewarded through a new tenure-based loyalty programme in the United Kingdom, building on the outstanding success of a similar programme in Italy.

Adjusted EBITDA was down 3 percent to GBP 2.139 billion, as strong growth in Italy and Germany could not offset the increased programming costs in the United Kingdom, particularly for the Premier League coverage, and the cost for launching mobile services in the UK.

The FTSE 100 group said 11.5% of its customers quit over the past year in the United Kingdom and Ireland, compared with 11.2% the year before. Sky says that these were partially offset by "continued excellent progress" in operating efficiency.

"We enter 2017/18 in a strong position with significant growth potential. Despite the broader consumer environment remaining uncertain, we are confident of delivering on the plans we've laid out".

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