BSkyB Premier League Soccer Rights Costs to Dent Margins
British Sky Broadcasting Group Plc (BSY), the U.K.’s biggest pay-TV provider, said the costs to acquire broadcast rights to air English Premier League soccer games may affect margins next year.
BSkyB won the bidding in June to show 116 matches starting in the 2013-14 season, while BT Group Plc (BT/A) won 38 matches. The sale of the seven packages raised 3.02 billion pounds ($4.8 billion), compared with 1.77 billion pounds in the current pact, the league said at the time.
“There’s clearly a little bit of discontinuity with the Premier League,” BSkyB Chief Financial Officer Andrew Griffith said in Barcelona today at a conference organized by Morgan Stanley. “There a step uplift next year and then it’s amortized over the next few years.”
BSkyB, in which Rupert Murdoch’s News Corp. (NWSA) owns 39 percent, relies on sport broadcasts to lure subscribers while BT will use the games to start a new sports channel. Griffith said today the company will also continue to cut customer-service and back-office expenses to “expand the bottom-line margin.”
BSkyB shares fell 1.3 percent to close at 753.5 pence in London, after dropping as much as 1.7 percent earlier today for the biggest intraday drop since Oct. 24.
BSkyB, based in Isleworth, England, will also focus on investing in original content for the U.K. and Irish market and on expanding HBO’s streaming service HBO GO as well as wholesaling Sky Atlantic, a TV channel that airs programming from the U.S.
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