U.K. broadcaster Sky said it was on track with its full-year earnings on Thursday as the company reported revenues of £9.641 billion for the first nine months of its fiscal year.
A clear bright spot in what were a steady set of results in a rapidly evolving media landscape was Sky's announcement of a $250 million tie-up with U.S. cable network HBO to produce content until 2020. The deal to create high quality major drama series for distribution globally was a demonstration of the innovation for which Sky is known as well as a decisive step towards controlling costs in a climate where content and broadcasting inflation continue to spiral.
The company asked media analysts on a conference call to "look through" the hefty payment associated with purchasing the rights to broadcast Premier League football when reviewing the 11 percent slide in operating profits on a constant currency basis for the period.
Sky shelled out £4.2 billion ($5.39 billion) to secure exclusive rights for a 3 year deal during the first half of this financial year, reflecting the astronomic 70 percent uplift in the price needed to secure the agreement since the last time it won the contract due to steepened competition, particularly from domestic rival, the BBC.
The broadcaster did not reveal third quarter U.K. churn figures (turnover of customers), consistent with its regular patterns of financial results disclosure, and management resolutely declined when pressed on the call to provide further detail beyond its terse statement in the press release that "churn was stable on the prior quarter". The first half figure for churn to the end of December had garnered focus for being unexpectedly high at 11.6 percent versus the year earlier metric of 10.2 percent.