Hike in Premier League football costs continues to hurt Sky's bottom line

Posted April 20, 2017

The broadcaster saw an 11 per cent drop in operating profit to £1.01 billion in the nine months to March 31 as it pointed to a £494 million bill linked to Premier League costs.

Substantially higher programming costs, led by the first year of a new Premier League broadcasting rights‎ contract, meant that total costs grew by 8% to more than £8.6bn.

Executives from both Sky and HBO will be responsible for greenlighting projects, inviting pitches from both the USA and Europe, which Darroch said would provide great opportunities for independent production companies.

"We have delivered strong revenue growth of 11% and are on track financially with operating profit for the nine months exceeding £1 billion". Adjusted EBITDA decreased by 6% to 1.52 billion pounds from 1.62 billion pounds.

In the United Kingdom and Ireland, Sky claimed a "solid" quarter, growing customers, products and revenues, despite what it called the more challenging environment facing most consumer businesses during the first quarter of the new calendar year.

News of the partnership came as the FTSE 100-listed company said it remained on track to meet its annual targets, after double-digit revenue growth in the first nine months of its financial year.

Sky said it had attracted 769,000 new customers over the past year, with 106,000 joining in the last quarter.

"Looking forward, we enter the final quarter of our fiscal year in good shape".

In the United Kingdom, revenues increased by four per cent to £6.410bn. The $250 million deal will see the two pay TV giants co-commission high-end dramas that can be exploited globally in both HBO and Sky's home markets and via worldwide distribution elsewhere.

Sky has today announced a $250 million co-production agreement with HBO (see separate story) as well as plans to broadcast this summer's Test Cricket series against South Africa in Ultra HD.

The update to the City came ahead of a deadline next month for United Kingdom regulators to respond to an intervention notice from ministers relating to 21st Century Fox's prospective takeover of Sky.