English Premier League gives Sky profits a kicking

The enormous deal signed by Sky for the main share of EPL broadcasting rights from 2016 to 2019 has hit the company in the pocket after it was forced to fork out £4bn.

Chelsea's midfielder Victor Moses celebrates after scoring against Leicester City at Stamford Bridge in London in October. Rights costs for EPL games have hit Sky's profits. Adrian Dennis / AFP
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Sky, the European pay-TV group that has accepted a buy-out offer from shareholder Rupert Murdoch, reported £679 million (Dh3.14 billion) in first-half operating profit, down 9 per cent, after it absorbed a big hike in English Premier League football costs.

Sky and BT battled to secure the TV broadcasting rights for 2016 to 2019, casuing the final price paid to rocket. Premier League clubs are sharing a staggering £5.13bn from 2016 to 2019 after Sky Sports broke the bank to retain the lion’s share of UK television rights.

The surge in the value of the contract represented huge increase on the current £3.01bn deal.

Sky was forced to pay £4.17bn to keep hold of the maximum possible number of matches – 126 – in the new three-year cycle, almost double the £2.28bn it shelled out for the same stranglehold previously.

Of the seven packages up for auction, Sky took five, with BT Sport securing the remaining two – 42 games – at a cost of £960m, a more modest increase on its previous £738m commitment.

The two broadcasters will pay an average of more than £10 million per match, an increase of 70 per cent on the previous £6.5m.

“In a year in which we are absorbing significantly higher programming costs, as a result of the step up in Premier League costs, our financial performance has been good,” the company said.

First-half revenue rose 6 per cent on a constant currency basis to £6.4bn.

Mr Murdoch’s Twenty-First Century Fox agreed a $14.6bn deal to buy the 61 per cent of Sky it does not already own in December.

Fox needs to secure regulatory approval in Europe and Britain and win over Sky shareholders before it fulfils its long-held ambition to control a business with 22 million customers in Britain, Ireland, Italy, Germany and Austria.

* Agencies

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