LONDON-British TV giant Sky PLC (SKY.LN) Thursday said additional costs relating to Premier League soccer and a weaker United Kingdom advertising market led to a 11% drop in adjusted operating profit for first nine months of fiscal 2017. Advertising revenue was 4% higher than in the corresponding period previous year, despite a tougher market environment in the United Kingdom and Italy in particular.
Overall costs grew by 8% to £8.628 billion, due to the increased cost of Premier League rights.
That revenue growth couldn't keep up with the higher expenditure though, with total costs rising by 8% to £8.63bn.
Leading pay TV players Sky and HBO are joining forces to create a development slate of high-end dramas that will be worth around US$250 million.
Jeremy Darroch, Sky's chief executive, said it had been "another strong quarter" for the company. A weaker United Kingdom advertising market also...
Sky also entered the mobile market in January with a range of SIM-only deals and more recently starting offering handsets - and giving customers the ability to upgrade after 12 months. The company said that advertising revenues in the first quarter of this year were down by 3pc.
A virtual reality experience in partnership with Sir David Attenborough and the Natural History Museum is also under way.
"It's been another strong quarter for Sky, despite this being our seasonally quietest period. Despite the broader consumer environment remaining uncertain, we continue to deliver on our strategy and are on track for the full year", Darroch said.
Sky said it had added 106,000 new customers during its third quarter, or three months to the end of March.
The results come against the backdrop of the ongoing agreed takeover attempt by the Murdoch family's 21 Century Fox vehicle to secure the 61 percent of Sky that it doesn't already own for a bid price of £10.75 ($13.79).
The deal already has the green light from European Union regulators, but Ofcom and the Competition & Markets Authority have until 16 May to investigate.