Yahoo Finance Sky sees £575m fall in revenue as sport is hit by Covid-19 lockdown
Sky has reported a $750m (£575m) plunge in revenues as more than 200,000 customers switched off in the three months to the end of June while key programming such as Premier League football was off air during the coronavirus pandemic.
Sky, which is owned by US pay-TV giant Comcast, reported a 15.5% year on year fall in revenues from $4.8bn to $4bn in the period as coronavirus impacted sports fixtures, subscriber viewing and advertising.
The company, which makes the lion’s share of its revenue and profits in the UK but also has operations in Germany and Italy, saw subscription revenues fall by 9.4% year on year to $3.5bn.
Sky blamed lower sports subscription revenues, as “crown jewel” properties such as the Premier League, Germany’s Bundesliga and Italy’s Serie A halted fixtures, as well as an overall decrease in the number of customers receiving Sky’s services which include broadband and mobile.
Sky said the total number of customer relationships to all of its services fell by 214,000 in the quarter as a result, which the company blamed on sport being postponed as well as the suspension of sales of some services during lockdown. Sky gave sports subscribers payment holidays in an attempt to keep customers loyal.
The company said it had lost 5% of its sports subscribers since the coronavirus pandemic began, and retained 99% of its total customer base.
“At Sky, our flexible strategy helped retain customers until key sports returned in May and June,” said Brian Roberts, the chief executive of Comcast.
TV advertising revenue plummeted by 43% to $321m, which Sky said was a combination of a generally weak market, exacerbated by brands freezing spending as high streets closed and travel, sports and entertainment events were stopped, as well as new, tighter laws restricting gambling ads in the UK and Italy.
Content revenues, which Sky makes by sub-licensing programming to other broadcasters such as Virgin Media and Mediaset in Italy, plunged 38% to $234m due to the postponement of sporting events which it usually provides.
Sky said that for the six months to the end of June adjusted profits fell 9.4% to $1.3bn.
