Sky profits get nicked by higher football broadcast rights

Company - Mohit Shah - Jan 27,2017

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sky profits get nicked by higher football broadcast rights

Broadcasting giant, Sky, has reported a fall of 9% in operating profits for the six months to 31 December. 

Sky reported that the operating profits fell to £679m after paying more to acquire broadcast rights for Premier League football matches.

However, the company said its financial performance can be tagged as “good”.

Rupert Murdoch's 21st Century Fox rules 39% of the company. Late last year, it proposed to buy out the remaining business comprising 61%.

Operating profit was noted to be £65m lower in the year before, even though the costs connected to the Premier League rights surged by £314m in the period.

Chief executive Jeremy Darroch said, in a year in which the company has been absorbing significantly higher programming costs due to the step-up in Premier League costs, the “financial performance has been good."

Currently, Sky has 22 million customers in the UK, Italy, the Republic of Ireland Austria and Germany.

As per the report, it was also revealed that Sky added more than 500,000 new customers to its network.

However, in the UK, the annual percentage rate at which customers stop subscribing to a service, jumped to 11.6% from 10.2% in the same span the year before. Sky commented that it reflected the increased fraction of broadband customers, who hold a greater inclination to switch providers.

It is the second time Mr. Murdoch has tried to gain full access to Sky. Around five years ago he also pursued to buy out Sky's independent shareholders using his News Corporation company which has since been segregated into 21st Century Fox and a new News Corporation.

Fox requires regulatory approval for the $14.6bn (£11.7bn) offer covering both the UK and Europe, where the company manages about a third of its business.