Hit by Virgin Dispute, BSkyB Profits Sag in Third Quarter

06 November 2007

ISLEWORTH, UK: Despite healthily increased broadband and TV customer inflow, NewsCorp's UK satellite monopoly BSkyB saw Q3 profits slump year-on-year from £166 million ($345.61m; €238.67m) to £121m a decline of 27.1%.

Observers attribute the decline to Sky's ongoing battle with Virgin Media, the latest casualty in an archetypal Murdoch war of attrition.

But Sky understandably prefers to finger other causes for the slippage, referring to higher marketing costs and substantial investment in its recently launched broadband and phone packages.

The dispute, scheduled for a High Court hearing next year, centres on Sky's attempt to hike its prices for channels aired by Virgin, among them Sky One, Sky News and Sky Sports News.

Rather than pay the new prices, which Virgin said were excessive, it axed the Sky channels from its cable platform. A move that left disgruntled consumers and advertisers declaring "a plague on both your houses".

In a statement accompanying Sky's latest numbers, ceo James Murdoch elevated inexactitude to an art form: "We expect that performance for the full year will be in line with our plans," he wrote.

Data sourced from BBC Online (UK); additional content by WARC staff