Sky Shares Plummet Despite Forecasts Of ‘Solid’ Interims Next Week
Shares in satellite broadcaster BSkyB fell heavily yesterday to close trading down 45½p, or 6.3%, at 673p. The heavy trading was prompted by reports that the company’s interim financial results, which are released next Friday, may show a declining rate of subscriber growth, along with a heavy write-off on Sky’s investment in Premiere, the pay-TV division of German group Kirch (see Murdoch In Talks To Sell Stake In Kirch To Liberty Media).
Subscriber growth is forecast to come in at around 217,000; this would be higher than the 109,000 customers Sky put on in Q3 2001 (see BSkyB Losses Fall As Subscriber Growth Continues), although Q4 does include the typically strong Christmas sales period.
Subscriber and revenue targets Goldman says that it has reduced its full year customer target from 6.1 million to 6.0 million; for its part, Sky hopes to achieve 7 million subscribers by 2003, with an average revenue per user (ARPU) of £400 by 2005. It is understood that analysts at Morgan Stanley, who are expecting growth of 202,000 customers in Q4, believe that the group will struggle to meet this target.
However, ARPU is forecast by Goldman Sachs to show a rise, possibly by up to 10% to £323 for Q4 2001, the second quarter of Sky’s financial year. ARPU stood at £317 in Sky’s last set of figures.
Sky Names ITV Sport Carriage Fee Separately, BSkyB’s chief executive, Tony Ball, has today confirmed that ITV asked £80 million to allow its ITV Sport channel to be carried on the satellite platform.
Ball told a House of Commons committee yesterday that BSkyB had been close to finalising a deal to carry the channel weeks ago, but that ITV pulled out at the last minute believing that the deal would be detrimental to ITV Digital, with the Champions League starting in February.
In a submission to the DCMS Sky said: “ITV has deliberately withheld the ITV Sport channel from satellite viewers whilst adopting a policy of blaming its lack of availability on Sky. Sky has not and is not in a position to deny access to ITV Sport and hopes that ITV will soon make the ITV Sport channel available to digital satellite viewers.”
At 11.30am today shares in BSkyB were down even further, by 11½p to 661½p.
