Sky earnings and revenues climb amid ownership uncertainty
Sky, the European pay-television titan, has reported a 14-per-cent increase in earnings for the first three quarters of the financial year despite continued uncertainty over its ownership going forward.
The UK-based broadcaster, which forms part of Rupert Murdoch’s media empire 21st Century Fox, announced today that revenues totalled £10.14 billion ($14.39 billion) in the nine months to the end of March.
This represented a rise of 5 per cent from £9.7 billion in the same period last year.
Earnings before interest, tax, depreciation and amortisation from established business climbed from £1.56 billion to £1.78 billion.
Sky, which provides television, broadband and telecoms services in the UK, Ireland, Germany, Austria and Italy (and is now also active in Spain and Switzerland), attracted 38,000 new customers in the third quarter (480,000 in the last year), to take its total to 22.9 million.
Sky Q, the enhanced entertainment platform, is now available in 2.5 million homes across the UK, Ireland and Italy, and is due to launch in Germany on 2 May.
The UK and Ireland remains the core market, with revenues of £6.67 billion, up 4 per cent, and Ebitda from established business of £1.45 billion, up 14 per cent, in the nine months to date.
Sky has taken encouragement from its retention in February of premium live rights in the UK to English soccer’s Premier League in a three-year deal running from 2019-20 to 2021-22.
The deal for 128 games a season is worth £3.58 billion, or "16 per cent less cost per game," the broadcaster pointed out today.
Two Premier League live rights packages, both comprising 20 matches per season, have still to be sold.
In a statement, Jeremy Darroch, Sky’s group chief executive, said: “It’s been a good quarter for Sky. We’ve delivered excellent financial results… Against the backdrop of a challenging consumer environment, this performance reflects the continual improvement in our broad set of products and services and our focus on providing great value every single day – something recognised by customers now taking over 62 million subscription products from us and our services reaching over 120 million people across Europe.”
In Italy, Sky highlighted Sky Italia’s new exclusive three-year rights deal to show Formula 1 and a “landmark” agreement with rival Mediaset to launch a pay-TV service on digital terrestrial television for the first time.
Meanwhile, in Germany, viewing figures on Sky Deutschland for soccer’s Bundesliga were up 12 per cent quarter on quarter between January and March and the audience for Sky Sports News in March was 62 per cent higher than in the same month a year ago.
Sky remains the subject of an £11.7-billion offer from Fox for the 61 per cent of the company it does not already own.
However, this has yet to receive regulatory clearance in the UK, with the Competitions and Markets Authority having provisionally blocked the takeover on the grounds of media plurality.
The situation is complicated by a rival bid made in February worth £22.1 billion from US media powerhouse Comcast, and Walt Disney’s $66-billion offer for Fox’s key TV and film assets.
Last week, the UK’s Takeover Panel ruled that Disney would have to make an offer for Sky, if Fox’s bid for the pay-TV operator is blocked by regulators.
It emerged yesterday that Fox had accepted the offer from Disney for its entertainment assets in December after rejecting a bid from Comcast as the latter was not willing to pay a break fee in the event that the deal collapsed.
A regulatory filing from Fox states that 'Party B', identified as Comcast, "was unwilling to agree to an acceptable allocation of regulatory risk" associated with the acquisition of the assets in an offer made in November.
• Existing investors Fox and Sky are among the companies that have contributed to $75 million in new funding raised by FuboTV, the USA-based sports streaming platform.
Other participants in the Series D funding round include new investor AMC Networks and other existing investors in Luminari Capital, Northzone and Scripps Networks Interactive, the international media company recently acquired by Discovery.
FuboTV has now raised $150 million in funding to develop the business, which offers live games from top North American leagues such as the NBA and NHL and soccer from North America and Europe via a service offering more than 70 channels, including US networks CBS, Fox and NBC.