Sky Deutschland CEO Sees ‘Long Way to Go’ Before Posting Profit

Sky Deutschland AG, the German pay- television operator 49.9 percent-owned by Rupert Murdoch’s News Corp., said it won’t turn profitable in the near future.

“We still make a huge loss and we have a long way to go to turn the business into the profit engine it can be,” Chief Executive Officer Brian Sullivan said at a Morgan Stanley conference in Barcelona today. “But things are changing and we’re seeing some fundamental organic growth in the business.”

Third-quarter sales rose to 243.2 million euros ($329 billion) from 208.5 million euros a year earlier as the company added 45,000 net clients, it said Nov. 11. The loss after tax narrowed to 89.3 million euros from 116.7 million euros.

Sullivan, who took over as CEO on April 1, plans to turn around the company with the help of three main strategies: delivering high-quality content; ensuring customers can get the content on any device they like, including mobile hardware; and by allowing access through any platform, whether satellite, cable, broadband or mobile.

Asked if the third quarter might have been a “turning point ” because of the sales growth, Sullivan said: “Possibly.”

Sky Deutschland owns rights to show German Bundesliga soccer matches, though not via Internet protocol TV and on mobile, where Deutsche Telekom AG has the rights.

Sullivan said today that the company’s past price structure didn’t “reflect the value” of its offerings.

He also said that Sky Deutschland may expand its product range in the long term to introduce triple-play offerings that bundle TV, Web and phone. It’s not an issue at the moment, Sullivan said, adding that double- or triple-play offerings could also be introduced in the mid-term through co-operation deals with other companies.

To contact the reporter on this story: Simon Thiel in Barcelona at sthiel1@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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