Sky's `corporate romance' consummated by profits
OPPONENTS of the mind numbing influence of populist TV, who moan that while technology offers multiple choice there is still nothing worthwhile to watch on the box, will be in despair at this week's confirmation from British Sky Broadcasting (BSkyB) that it is ready to introduce its 200 channel digital satellite service in the autumn. This, in addition to Sky's likely dominance in digital terrestrial television and pay per view, makes Sky the dominant monopolistic player in the multimedia business.
Shareholders, more concerned with the bottom line balance sheet and less with issues such as freedom of choice and fair competition, were this week smugly reflecting on the substantial growth in the value of their investment. BSkyB produced half year trading figures showing a 26 per cent growth in pre tax profits to £134 million. Interim dividend rose 10 per cent to 2.75p a share.
Given bullish technological developments which will further enhance BSkyB's profitability, the shares took off after the results, surging 30p to 623p. Looking ahead digital presents massive potential for maximising profits from pay per view.
From the autumn 1998, Sky can charge for individual Premiership matches, a relationship with football which BSkyB chairman Sam Chisholm describes as "one of the great corporate romances".
One black hole in the BSkyB firmament may be a proposal this week from the European Commission to prevent owners of exclusive rights to named sporting events from broadcasting such events in scrambled form on a pay per view basis.