British Sky Broadcasting today enhanced its role as a sports content provider with the acquisition of Sports Internet Group. The £301 million deal was unveiled as the group announced its third-quarter results, which showed a slide in profits as rapid expansion in the digital world continued to take its toll.
Pre-tax loss for the three months ended 31 March fell to £28.4 million, compared to a profit of £16 million for the same period last year. Operating profits were also down, at £51m compared with £153m for the comparable period. The group said that this reflected the acquisition costs of the greater volumes of new subscribers to digital, particularly since the advent of its free set top box offer.
Sales in digital reached 3.4 million over the period, representing the highest growth for a quarter since the launch of Sky Digital in October 1998 (see Digital Launch Update); a total 190,000 subscribers joined the service in the three months to the end of March. Total subscribers to Sky channels now stands at 8.6 million.
Tony Ball, chief executive of the group, said Sky Digital had achieved the fastest digital launch by any European platform. “While others promise the advantages of digital delivery and interactivity, we have been delivering those benefits for a significant length of time. Two-thirds of our subscribers are now digital, with full access to e-mail and interactive services”, he said.
The acquisition of Sports Internet will allow the group to further enhance its online sports content. Earlier this year it announced the intention to plough £250 million into its net ventures and acquired a stake in another sports group, Sportal (see Sky Furthers Net Investments). Today’s deal will allow the group control of Planetfootball.com, a general football news site which also runs a host of Premier League sites, including Leeds United, Newcastle United, Liverpool and Aston Villa, and has online gambling interests.
BSkyB already has exclusive broadcasting rights to five Premier League teams, and its increased sports presence on the internet will place it in an ideal position to bid for the internet rights to the Premiership games, which will be put up for tender this summer. Today sees the deadline for TV broadcasting rights to the championship, with BSkyB expected to bid for the main pay-per-view package (see Broadcasters Need More Than Money To Win Premier League Rights).
Turnover for the group was £467 million, compared to £391m for the same period last year.
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