Sky strikes new HBO deal as profits drop -11%

Danny Woods
April 21, 2017

The first projects under the new deal are already in development and are scheduled to air in 2018.

It said it had made significant inroads on reducing operating costs, which was necessary due to "significantly higher programming costs".

Sky attracted 106,000 new customers in Q3 of its current financial year, taking its overall customer base up to 22.4 million.

Despite the decline in profit, chief executive Jeremy Darroch said Sky is "on track" financially.

Operating profits slid from £1.14bn to £1.01bn, largely on the back of higher costs related to the Premier League broadcasting rights, which were £494m higher than last year and saw total costs rise 8% on the year.

As at 31 March, Sky had 12.7 million customers and it added 40,000 new customers in the quarter ended 31 March 2017 and reported customer growth of 338,000 over the a year ago.

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"This new venture deepens that relationship, maintains our leadership position in world-class content". "We have continued to improve the customer experience with further enhancements to our Sky Q and Sky+ platforms as well as the launch of our digital customer service via the My Sky app". Sky Germany had 4.9 million customers at the end of the third quarter.

The company has also announced a $250 million multi-year production partnership with HBO, which will oversee a development slate of high-end drama series.

"Sky's outlook comments are generally upbeat, as they anticipate positive momentum going into the final quarter, notwithstanding the broader uncertainties surrounding the United Kingdom consumer as the fallout from the Brexit timetable begins to emerge", said Richard J Hunter, head of research at Wilson King Investment Management.

Sky is the subject of a £11.7 billion takeover bid from Rupert Murdoch's 21st Century Fox. "Despite the broader consumer environment remaining uncertain, we continue to deliver on our strategy and are on track for the full year".

Sky's United Kingdom and Ireland customer base totaled 12.7 million at the end of the third quarter, up 40,000 year-on-year.

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