Bskyb Profits Surge 66%

Satellite broadcaster BSkyB, the dominant force in British pay television, yesterday reported a 66 per cent rise in full-year profit to £257.4 million ($398.1 million).

Annual turnover climbed to more than £1 billion as the number of subscribers in Britain and Ireland rose to 5.5 million for BSkyB, in which Rupert Murdoch's News Corp has a 40 per cent stake.

Profit for the year to June 30, 1996 "� up more than £100 million on the £155.3 million reported a year ago "� was towards the top end of analysts' forecasts. The full-year dividend of 5.5 pence was lower than expected, however.

 

The continuing growth in subscribers, the increase in the number of channels and the renewal of the Premier League (soccer) contract until 2001 provide a firm base from which to pioneer the development of digital television in the UK, chief executive Sam Chisholm said in a statement. The agreement with Kirch Gruppe to develop the digital platform in Germany gives us a great opportunity to extend our business into continental Europe, he said.

BSkyB plans to launch a British digital television service next year.

Last month it signed a deal with the group headed by Bavarian media mogul Leo Kirch under which it will take a stake of up to 49 per cent in DF1, Kirch's digital pay television operation.

BSkyB is expected to inject £200 million into the alliance to cover start-up losses over the next three years.

The deal gives BSkyB access to Europe's largest television market. BSkyB said spending on programming rose by 28 per cent to £420 million after the purchase of golf, boxing and cricket events and the launch of new channels such as Disney.

The programming spend is set to rise further following a £670 million deal signed in June which will enable BSkyB to retain rights to broadcast live English Premier League soccer for next five years.

One cloud on the horizon is a report that British cable companies may seek European Commission intervention over the fees BSkyB charges for its top channels.

The Financial Times said the cable companies fear they will not secure satisfactory conditions despite BSkyB undertakings to revise the structure of its wholesale rate card.