WHILE headlines surrounding BSkyB’s second quarter results on Thursday will certainly centre around an expected drop in profits – which analysts say could be as much as 10 per cent – the escalating cost of sports rights and the uncertainty of hanging on to the most precious of those rights continues to cast a shadow over the pay-TV broadcaster.
With the Premier League auction expected to kick off later this year or early 2015, analysts are predicting BSkyB will need to pay 60 per cent more just to stay where it is in terms of its rights packages.
However, there are fears the broadcaster could be forced to pay even more than this, since to lose any more prime football content to its upstart rival BT Sport or one of several new competitors, would be very bad news indeed.
The market will also be keen to hear what BSkyB thinks its chances are of agreeing a wholesale deal with BT Sport to broadcast Champions League from 2015 following its shock defeat in the rights battle for this tournament last year. The acquisition of the Champions League rights for BT Vision has given the group a firm platform from which to win over new subscribers and even to attract some from BSkyB if no deal is done.
Despite the challenges BSkyB has a long history of strong execution. Its results will show solid net additions in its traditional products – TV and Broadband – with strong growth in connected services such as SkyGo. But uncertainty around sport looks set to remain.