A strangely familiar tale of betting on football proving more costly than expected, among other woes?
The UK’s media and telecoms provider Sky has reported a £750 million loss. Sky, which is owned by the US telecoms and media conglomerate Comcast, wrote down £1.2 billion on its operations in sub in Germany and Italy.
Also, the football World Cup, controversially held in Qatar, proved expensive for Sky to broadcast because it was held in winter 2022 (as opposed to summer) so more Premier League Games that are broadcast by Sky were pushed into 2023.
In 2023, it paid more than £5 billion to acquire the broadcasting rights to four out of five available ‘packages’ of Premier League games. It will broadcast an unprecedented number of matches, at least 215 a season, from 2025. Sky is looking to Premier League Football as a bulwark against Sky content streaming firms like Netflix, Amazon and Disney.
However, its deal with HBO expires next year, having been extended in 2019. Through this, Sky screened shows like Game of Thrones and Succession. But HBO relaunched its own streaming service in the US and parts of Europe, and could decide to offer a streaming service in the UK, cutting Sky out.
There are other storm clouds too. In September, Sky accused Warner Bros Discovery of breaking an agreement that gives it the right to co-produce shows with its Max streaming service, including a new Harry Potter series. Sky’s co-production deal dates back to 2019, when the Warner Bros studio was owned by AT&T. WBD said it would defend itself against the suit.
Sky has been hedging its bets by investing its own original programming with shows like Brassic which it syndicated to Netflix, and a drama about a serial killer, Sweetpea.
Since it was acquired by Comcast, it has been shifting from transmitting its services via satellite to streaming. The US conglomerate paid $39 billion (£30 billion) for Sky which had been listed on the London Stock Exchange in 2018. It triumphed over beating 21st Century Fox, which is now owned by Disney, at auction. Comcast wrote down the value of the business by $8.6 billion in 2022.
Sky’s revenues were up a little, at £10.2 billion, due in part to it charging more for its TV, broadband and mobile services, which offset some lost revenues, including from advertising and its Sky Q satellite box.
The cost of using telcos’ broadband and mobile infrastructure rose slightly and so did the fees it pays for rights to broadcast football. As a result, Sky’s operating losses went up from £111 million in 2022 to £224 million last year.