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BSkyB's profits hit by costly football rights
BROADCASTER BSkyB brushed aside competition from rival BT as it hailed growth in its on-demand TV service and a surge of more than 40 per cent in the take-up of products over its Christmas quarter.
The group said its advertising campaign fronted by Absolutely Fabulous star Joanna Lumley helped it notch up five million customers for high definition TV in the quarter to December 31, while it saw a record one million connected Sky+HD boxes added in the three months - nearly 11,000 a day.
However, pre-tax profits fell 9.2 per cent from £610m to £554m for the second half of 2013, partly due to a new £760m deal to show Premier League football.
It added another 110,000 broadband internet customers in the last three months of 2013, despite the challenge from BT, which launched its own sport channels last August offering free Premier League football if customers sign up to a broadband package.
A continuing payment of £70m on BSkyB's services where TVs are linked to the internet and mobile phones, also hit profits, it said.
Sky was left reeling after losing out in November on the UK rights to show Champions League and Europa League matches to BT, which paid almost £900m to show both Uefa competitions for three seasons from 2015/16.
Jeremy Darroch, chief executive of BSkyB, said the group was not prepared to pay over the odds for the rights, saying it believes there are better ways to invest for our customers.
It announced a new five-year deal for the exclusive rights to the entire HBO TV catalogue, which includes top US shows such as Girls and Game Of Thrones, extending its existing agreement to 2020, having also just secured a new drama pay channel with broadcaster ITV, called ITV Encore, that will launch next year.
The group declined to comment on reports suggesting it has held talks with Vodafone about adding a mobile offering to boost its defences against BT, but Mr Darroch said Sky was open-minded about tie-ups.
He said: "Mobile has been something that from time to time weve looked at - we haven't ruled anything out but dont see it being imperative for the business."
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