Sharewatch: BSkyB Boosted By Free-To-Air Announcement

BSkyB was the best performer in yesterday’s media market with shares rising by a solid 7.68% revealing plans to launch a free-to-air satellite package of more than 200 television and radio channels in an attempt to compete with the BBC-backed Freeview service (see BSkyB To Launch Free-To-Air Satellite Package).

The prospect of higher revenues outweighed concerns that margins would decline. Morgan Stanley repeated its ‘overweight’ rating, but BSkyB did not help itself by failing to provide details on how much investment would be required or how the new initiative would affect revenue and profits.

ITV was also seen in focus with shares dipping by 1.74% despite reports that it could receive a bumper pay-out from advertisers during England’s debut Euro 2004 match against France on Sunday, with break junctions during the game expected to net £6 million for the broadcaster (see ITV Set To Score £6 Million From England Game).

Elsewhere, SMG saw shares inch up by 0.45% to close at 110˝p following speculation earlier this week that it is sounding out potential buyers for its Virgin radio station, which it hopes to off-load for around £130 million (see Virgin Radio Could Be Sold For £130 Million).

Caution was the keyword in the London equity market ahead of today’s rate decision by the Bank of England. The FTSE 100 closed down 0.3% at 4,489.5, while the mid-cap FTSE 250 added 0.2% to 6,162,4. Trading volume yesterday was 2.6 billion.

The closing prices of media company shares on Wednesday were: