Sky has comfortably dismissed any fears of being surpassed by BT Sport
Sky has comfortably dismissed any fears of being surpassed by BT Sport after posting one of the best quarters in the company’s history.
The pay-TV company registered an increase in overall revenues by 6% while profits have risen by 10%. The company has now made a profit of just under £ 400 million for this quarter whereas revenues have increased to £ 2.8 billion. These figures have come at a time when Sky have been looking below their shoulders for the arrival of BT as the new big-name when it comes to sports coverage. BT have been actively bidding in order to .
They recently secured the rights to host the Champions League from next season onwards, while they have also been steadily increasing the live match coverage in the Premier League. The English league continues to remain as one of the biggest sources of football on TV for Sky. The engaged in nature of the competition may also have resulted in fewer customers leaving Sky and opting for rival networks. Sky registered just 9.8 percent of customers leaving the group due to various reasons.An analyst, though, questioned the long-term credibility of these financial results since the programming costs have become higher for Sky.
“We still have concerns that Sky’s long-term profitability will never get to the heights to justify its valuation because of the pressures from increasing programming costs. We see evidence of this as ARPU continues to flatline, with ARPU flat in UK and Germany and falling in Italy over the quarter. Cost rights inflation and the uncertainty of further spikes in the major costs such as the Premier League rights will continue to drag on the valuation as they continue to display an inability to pass this cost through to customers,” said Whittaker, an analyst.