FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of February 2005
2 February 2005
BRITISH SKY BROADCASTING GROUP PLC
(Name of Registrant)
Grant Way, Isleworth, Middlesex, TW7 5QD England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F
Form 20-F X Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): Not Applicable
EXHIBIT INDEX
Exhibit
EXHIBIT NO. 1 Press release of British Sky Broadcasting Group plc
announcing Interim Results released on 2 February 2005
2 February 2005
BRITISH SKY BROADCASTING GROUP PLC
Results for the six months ended 31 December 2004
BSkyB announces 192,000 net DTH subscriber additions for the second quarter,
25% year on year operating profit (before goodwill) growth, and a 44% increase
in earnings per share (before goodwill and exceptional items) to 12.1 pence
- Net DTH subscriber growth of 192,000 in the quarter to over 7.6 million
- Sky+ households increase by 168,000 in the quarter to 642,000
- Multiroom households increase by 116,000 in the quarter to 473,000
- Total revenue increases by 10% to GBP1,945 million
- Operating profit before goodwill increases by 25% to GBP354 million
- Earnings before goodwill and exceptional items increase by 44% to
GBP234 million
- Profit after tax up 18% to GBP154 million
- Earnings per share before goodwill and exceptional items increase by 44% to
12.1 pence
- Interim dividend of 4 pence per share declared, an increase of 45%
Commenting on the announcement, James Murdoch, Chief Executive said:
"The business delivered a strong set of financial results in the first half year
with good sales and profit growth.
During the quarter, we launched a number of important initiatives consistent
with the long-term growth strategy we outlined in August 2004. We have a full
programme of work ahead of us in 2005, including the continued roll-out of our
segmentation project and implementation of new customer management systems. We
will continue to develop these and other initiatives in pursuit of our long-term
strategic goals and targets."
Enquiries:
Analysts/Investors:
Andrew Griffith Tel: 020 7705 3118
Robert Kingston Tel: 020 7705 3726
E-mail: investor-relations@bskyb.com
Press:
Julian Eccles Tel: 020 7705 3267
Robert Fraser Tel: 020 7705 3036
E-mail: corporate.communications@bskyb.com
Finsbury:
James Murgatroyd Tel: 020 7251 3801
There will be a presentation to analysts and investors at 09:30 a.m. (GMT) today
at The Grange City Hotel, 8-14 Cooper's Row, London, EC3N 2BQ.
A conference call with the press will be held at 11:00 a.m. (GMT) today. To
register for this, please contact Simon Moyes at Finsbury on +44 20 7251 3801.
A conference call for US analysts and investors will be held at 10.30 a.m. (EST)
today. Details of this call have been sent to North American institutions and
can be obtained from John Sutton at Taylor Rafferty on +1 212 889 4350.
A live webcast of the presentation to analysts and investors, together with this
press release, will be available today on Sky's corporate website which may be
found at www.sky.com/corporate. Interviews with James Murdoch, CEO, and Jeremy
Darroch, CFO, in video/audio and transcript will be available from 7:00 a.m.
(GMT) today at www.sky.com/corporate and at www.cantos.com.
OVERVIEW
On 4 August 2004, Sky announced a range of initiatives to deliver on its
long-term growth strategy. During the three months to 31 December 2004 ("the
quarter"), Sky has made good progress on the work outlined in August 2004 and,
with a full programme planned for 2005, is in a strong position to make
continued progress on its long-term strategy.
The Group has delivered a strong financial performance during the six months to
31 December 2004 ("the period"), with a 44% increase in earnings per share
(before goodwill and exceptional items). Total revenues increased by 10% over
the six months to 31 December 2003 ("the comparable period") to GBP1,945 million
and, for the first time, the Group generated over GBP1 billion of revenue during
a single quarter. Operating profit before goodwill increased by 25% on the
comparable period to GBP354 million, resulting in an operating profit margin
before goodwill of 18.2%, up from 16.0% for the comparable period.
Profit after tax for the period grew to GBP154 million, with earnings per share
before goodwill and exceptional items of 12.1p, an increase of 44% on the
comparable period. During the quarter, the Group returned GBP128 million to
shareholders through a share buy-back programme and an interim dividend payment
of 4 pence per share has been declared.
OPERATING REVIEW
At 31 December 2004, the total number of direct-to-home ("DTH") digital
satellite subscribers in the UK and Ireland was 7,609,000, representing a net
increase of 192,000 subscribers in the quarter. Sky remains on track to achieve
its target of eight million DTH subscribers by 31 December 2005.
The total number of Sky+ households increased by a record 168,000 in the quarter
to 642,000, which represents 8.4% penetration of total DTH subscribers. Whilst
continuing to penetrate the existing subscriber base, Sky+ also attracts
consumers who previously had not chosen Sky. 28% of new Sky+ households in the
quarter were first time subscribers.
The growth in Sky+ penetration has also led to further good growth in the number
of households taking two or more subscriptions. The total number of Multiroom
households increased by 116,000 in the quarter to 473,000, which represents 6.2%
penetration of total DTH subscribers. The total number of Multiroom
subscriptions reached 500,000 at 31 December 2004 as some households take more
than two subscriptions.
DTH churn for the quarter (annualised) was 9.5%, a decrease of 0.3% points on
the three months to 30 September 2004 ("the first quarter").
Annualised average revenue per DTH subscriber ("ARPU") in the period was GBP386,
an increase of GBP17 over the comparable period and GBP9 over the first quarter.
On 1 October 2004, Sky launched a long-term marketing drive to encourage
consumers to re-appraise the Sky brand and the range of content available from
pay television. The 'What do you want to watch' advertising campaign was
launched across numerous media including television, press and cinema and
featured a wide array of content from channels retailed by Sky.
New pricing and packaging initiatives have been introduced since 1 October to
broaden the range of entry points to pay-TV. These included the launch of the
premium 'Sky+160' product, more focused marketing of the popular Family Pack, a
new entry level Sky 'starter pack' and a free satellite offering. Also,
installation costs have been waived on all popular Sky packages, eliminating the
higher upfront costs for subscribers not choosing the top tier 'Sky World'
package. The development of these marketing initiatives will continue to
roll-out during 2005.
Sky has continued to invest in quality programming to increase customer loyalty
and satisfaction, and to drive subscriber growth. On 12 October 2004, Sky
announced that it had been awarded exclusive live rights by the Rugby Football
Union to English international and domestic rugby union until the end of the
2009/10 season. The new agreement covers the five seasons from the start of the
2005/06 season and follows on from the current TV agreement. Under this new
agreement, Sky Sports will broadcast live all of England's Autumn Internationals
and over 30 Zurich Premiership matches each season. With exclusive Heineken
European Cup Rugby and all Southern Hemisphere rugby, including the Lions Tour
in June 2005, Sky Sports will show over 100 live rugby union games this year.
On 14 December 2004, the England and Wales Cricket Board ("ECB") announced its
intention to award exclusive live rights to all international and domestic
cricket in England and Wales from 2006 to 2009 to Sky. Under the new agreement,
it is proposed that Sky will broadcast live all of England's home Test and
One-Day International matches, including the Ashes series in 2009, Twenty20
matches and a number of Natwest series games.
Sky One's new season launched on 14 September 2004 with a new on-air look and a
strong line-up of both international and newly commissioned British shows,
including 'Deadwood', 'the 4400', 'Battlestar Galactica', 'Hex', a new series of
'Dream Team', 'The Long Way Round' and reality event 'The Match'.
The finale of 'The Match,' on Sunday 10 October, delivered the second best ever
peak audience for Sky One, recording a higher viewing share than BBC2, Channel 4
and 'five' in multichannel homes. The continued investment in Sky One and focus
on peak time programming is delivering a strong Winter schedule, with new series
of '24' and 'Nip/Tuck' and new shows such as 'Rescue Me'.
Multichannel TV viewing in Sky digital households continues to grow
year-on-year, accounting for over 50% of viewing for the first time, according
to the viewing figures from the Broadcasters' Audience Research Board ("BARB")
at 31 December 2004. The combined multichannel TV viewing share in Sky digital
households of 51% compares favourably to digital terrestrial television
households where the large majority of viewing, around 80%, continues to be of
the five analogue terrestrial channels, BBC1, BBC2, ITV1, Channel 4 and 'five'.
Sky's wholly-owned channels recorded the highest ever weekly combined share of
TV viewing in the week ending 2 January 2005, achieving 9.6% of total TV viewing
in all TV households. Live sports events such as Liverpool vs Chelsea, the movie
premier of Bruce Almighty and Sky News enabled Sky to win a higher viewing share
in all TV households than Channel 4 for a full week for the first time.
On 23 November 2004, Sky Movies announced a multi-year exclusive UK agreement to
broadcast The Academy Awards from 2005. For the 77th Academy Awards on 27
February 2005, Sky has launched network-wide coverage which included full
reporting of the nominations in January and culminates with live uninterrupted
coverage of the event itself on Sky Movies. Extended highlights and additional
themed programming will be shown on Sky One, Sky Travel and the Biography
Channel, with up-to-the-minute news coverage on Sky News.
FINANCIAL REVIEW
Revenue
Total revenues increased by 10% on the comparable period to GBP1,945 million.
DTH revenues increased by 11% on the comparable period to GBP1,426 million. This
was mainly driven by 6% growth in the average number of DTH subscribers and a 5%
increase in the average revenue per DTH subscriber following the January and
September 2004 prices rises and increased Multiroom revenues.
Cable wholesale revenues increased by 6% to GBP109 million, an increase of GBP6
million on the comparable period. Adjusting for a one-off receipt of audit
monies received from NTL in the first quarter of last year, this represents a
GBP10 million increase on the comparable period. With the level of subscribers
remaining broadly flat, the increase is attributable to the wholesale price
changes in January and September 2004 and the carriage of Sky Sports Extra and
PREMPLUS.
An 8% increase in advertising revenues on the comparable period to GBP159
million reflects growth of 5% in the overall UK television advertising sector
and continued growth in the Group's share of the sector to 11.6%. The Group
outperformed UK television advertising sector growth in 2004 and, with the
majority of agency deals now in place, expects this to continue in 2005.
SkyBet revenues increased by GBP27 million on the comparable period to GBP118
million and underlying gross margin in SkyBet increased to 10%, reflecting
strong growth in betting and gaming through interactive TV.
Lower revenues from the SkyBuy retail service, and from the expiry of a number
of contracts and services, led to an 18% reduction in Sky Active revenues on the
comparable period to GBP46 million. Underlying revenues in Sky Active (excluding
these items) rose by 11% to GBP42 million, reflecting growth in areas such as
interactive advertising, games and third party betting and gaming.
Other revenues increased by 4% on the comparable period to GBP87 million, mainly
due to the growth of set-top box revenues associated with the increase in Sky+
and Multiroom sales.
Programming costs
Total programming costs increased by GBP25 million on the comparable period to
GBP808 million.
Sports costs increased by GBP33 million to GBP373 million. As previously
announced, all contracts, including the new FA Premier League ("FAPL") contract
and the new Football Association ("FA") contract are now amortised on a
straight-line basis across the season, resulting in a greater charge in the
first half of the financial year. Adjusting for the effect of this change,
sports costs would have reduced by GBP24 million on the comparable period. This
underlying reduction is principally due to savings achieved in the renewal of
the FAPL and FA contracts, slightly offset by the Ryder Cup, a bi-annual event,
and cricket's ICC Champions Trophy, both of which occurred in September 2004.
Other programming costs, including Movies, News, Entertainment and Third Party
Channels, reduced by GBP8 million on the comparable period to GBP435 million.
This reduction has been mainly driven by savings in US-dollar denominated movies
costs, partially offset by the increased investment in Sky One programming.
Gross margin (defined as total revenues less total programming costs, divided by
total revenue) increased from 55.7% for the comparable period to 58.5%. On a
like-for-like basis (adjusting for the effect of the change in sports rights
amortisation phasing noted above) gross margin would have increased by 6
percentage points.
Other operating costs
Other operating costs before goodwill increased by GBP83 million on the
comparable period to GBP783 million.
Marketing costs were GBP258 million, an increase of GBP43 million on the
comparable period. This increase was driven by higher acquisition and retention
costs, reflecting increased direct marketing and installation offers across all
product categories, and increased above-the-line spend due to the launch of the
'What do you want to watch' advertising campaign and marketing of the new Sky
One schedule. The Group continues to expect above-the-line marketing costs to
increase by 40% to 50% in the 2005 financial year compared to the 2004 financial
year.
Betting costs increased by GBP20 million to GBP106 million, in-line with the
increase in SkyBet revenue.
The remaining other operating costs, including subscriber management costs,
transmission and related function costs and administration costs, increased by
GBP20 million on the comparable period to GBP419 million. This was primarily due
to costs associated with an expanding broadcast and support infrastructure,
including the Advanced Technology Centre, IT systems and an increased number of
own-productions.
During the quarter the Group sold its 49.5% investment in Granada Sky
Broadcasting ("GSB") to ITV for GBP14 million cash consideration. After
deducting the carrying value of the investment in GSB and writing back the
original goodwill relating to the increase of the Group's interest in GSB to
49.5% in March 1998, which had previously been eliminated against reserves, the
disposal generated an accounting loss under UK GAAP of GBP23 million in the
quarter.
After goodwill of GBP57 million, the Group's share of operating profits of joint
ventures of GBP8 million, loss on disposal of the groups share in GSB of GBP23
million (as above) and net interest payable of GBP32 million, the Group made a
profit before tax of GBP250 million.
Taxation
The total net tax charge for the period was GBP96 million. This reflects a
current tax charge of GBP66 million and a deferred tax charge of GBP30 million.
Excluding the effect of goodwill, joint ventures and exceptional items, the
Group's underlying effective tax rate on ordinary activities has moved from
29.9% for the comparable period to 30.6%, as a result of a decrease in the
proportion of allowable tax deductions.
The mainstream corporation tax liability for the period was GBP71 million and,
in accordance with the quarterly instalment regime, GBP36 million was paid in
January 2005.
Earnings
Profit after tax for the period grew by 18% on the comparable period to GBP154
million, generating earnings per share of 12.1 pence, an increase of 3.7 pence
per share on the comparable period.
Cashflow
Earnings before interest, tax, depreciation and amortisation ("EBITDA"),
excluding exceptional items, were 18% higher on the comparable period at GBP402
million. The Group continued to reduce net debt by a further GBP60 million to
GBP369 million at 31 December 2004. In addition to strong growth in EBITDA, the
Group also realised GBP14 million from the sale of the Group's 49.5% investment
in GSB to ITV and GBP9 million from the receipt of dividends and net funding
repayments from joint ventures. The Group utilised cash in a number of areas
including the share buy-back programme (GBP128 million), capital expenditure
(GBP123 million), dividend payments relating to the final dividend for the 2004
financial year (GBP63 million), net interest payments (GBP32 million) and
taxation (GBP28 million).
During the period, the Group made progress on a number of capital expenditure
and infrastructure projects in line with the plans outlined on 4 August 2004.
This has led to an increase in capital expenditure of GBP58 million on the
comparable period to GBP123 million. The Group spent GBP51 million on a
combination of infrastructure projects including the acquisition of four
freehold properties previously leased at its Osterley Campus and construction
work on several other projects, including the new Sky News Centre, which
commenced production of the 'five' news service on 29 December 2004. Investment
in the customer relationship management ("CRM") programme during the period
amounted to GBP25 million as the Group continues the programme of work started
in 2002 to upgrade its customer service systems. A total of GBP19 million was
incurred on the final stages of the construction and fit-out of the Advanced
Technology Centre ("ATC") building. The remaining GBP28 million, regarded as
'core' or 'maintenance' capital expenditure, was spent on IT infrastructure,
broadcast equipment and new product development, including High Definition TV,
which is expected to launch in 2006.
IFRS
The Group is required to adopt International Financial Reporting Standards
('IFRS') in the preparation of its consolidated financial statements from 1 July
2005. The Group's first results reported under IFRS will therefore be the
results for the quarter ended 30 September 2005. In order to provide comparative
information under IFRS in advance, the Group intends to release its results for
the year to 30 June 2005, restated under IFRS, in September 2005. Information
regarding the Group's transition to IFRS was provided in the Group's 2004 Annual
Report and further details will be given in the Group's interim results
presentation today.
Dividend
As part of the Group's financial strategy, the Directors are declaring an
interim dividend of 4 pence per Ordinary Share. The ex-dividend date will be 30
March 2005 and the dividend will be paid on 22 April to shareholders of record
on 1 April 2005.
CORPORATE
At the Company's AGM on 12 November 2004, Sky received approval from
shareholders to repurchase up to 97 million shares, representing approximately
five per cent of issued share capital. During the quarter, Sky repurchased for
cancellation 22.8 million shares for a total consideration of GBP128 million,
including stamp duty and commissions. The Company intends to continue to
distribute surplus cash to shareholders through the buy-back programme, within
the limits of available distributable reserves and subject to market conditions.
Use of non-GAAP financial information
This results announcement contains certain information on the Group's results
and cash flows that have been derived from amounts calculated in accordance with
UK Generally Accepted Accounting Principles ("UK GAAP"), but are not themselves
UK GAAP measures. This should not be viewed in isolation as alternatives to the
equivalent UK GAAP measure and should be read in conjunction with the equivalent
UK GAAP measures. Further disclosures are also provided under "Use of Non-GAAP
Financial Information" in Appendix 2.
Forward-looking statements
This document contains certain forward-looking statements within the meaning of
the United States Private Securities Litigation Reform Act of 1995 with respect
to the Group's financial condition, results of operations and business, and
management's strategy, plans and objectives for the Group. These statements
include, without limitation, those that express forecasts, expectations and
projections with regard to DTH subscriber growth, advertising revenue growth and
marketing expenditure.
These statements (and all other forward-looking statements contained in this
document) are not guarantees of future performance and are subject to risks,
uncertainties and other factors, some of which are beyond the Group's control,
are difficult to predict and could cause actual results to differ materially
from those expressed or implied or forecast in the forward-looking
statements. These factors include, but are not limited to, the fact that the
Group operates in a highly competitive environment, the effects of government
regulation upon the Group's activities, its ability to continue to obtain
exclusive rights to movies, sports events and other programming content, risks
inherent in the implementation of large-scale capital expenditure projects, the
Group's ability to continue to communicate and market its services effectively,
and the risks associated with the Group's operation of digital television
transmission in the UK and Ireland.
Information on some risks and uncertainties are described in the "Risk Factors"
section of Sky's Annual Report on Form 20-F for the year ended 30 June 2004.
Copies of the Annual Report on Form 20-F are available on request from British
Sky Broadcasting Group plc, Grant Way, Isleworth TW7 5QD. All forward-looking
statements in this document are based on information known to the Group on the
date hereof. The Group undertakes no obligation publicly to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Appendix 1
Subscribers to Sky Channels
Prior year Q1 2004/05 Q2 2004/05
Q2 as at as at as at
31/12/03 30/09/04 31/12/04
DTH homes1,2 7,208,000 7,417,000 7,609,000
Total TV homes in the UK and
Ireland3 25,955,000 26,176,000 26,249,000
DTH homes as a percentage of
total UK and Ireland TV
homes 28% 28% 29%
Cable - UK 3,282,000 3,305,000 3,292,000
Cable - Ireland 580,000 575,000 584,000
Total Sky pay homes 11,070,000 11,297,000 11,485,000
DTT - UK 4 2,075,000 3,451,000 4,216,000
Total Sky homes 13,145,000 14,748,000 15,701,000
Total Sky homes as a
percentage of total UK and
Ireland TV homes 51% 56% 60%
Sky+ homes 250,000 474,000 642,000
Multiroom homes5 237,000 357,000 473,000
1: Includes DTH subscribers in Republic of Ireland (347,000 as at 31 December
2004).
2: DTH subscribers includes only primary subscriptions to Sky (no additional
units are counted for Sky+ or Multiroom subscriptions). This does not include
customers taking Sky's freesat offering or churned customers viewing
free-to-air channels.
3: Total UK homes estimated by BARB and taken from the beginning of the month
following the period end (latest figures as at January 2005). Total Ireland
homes estimated by Nielsen Media Research, conducted on an annual basis in
July with results available in September (latest figures as at July 2004).
4: DTT homes estimated by BARB and taken from the beginning of the following
month (latest figures as at 1 January 2005). These figures may include Sky or
Cable homes that already take multichannel TV.
5: Multiroom includes households subscribing to more than one set-top box. (No
additional units are counted for the second or any subsequent Multiroom
subscriptions.)
Appendix 2
Use of Non-GAAP Financial Information
A summary of certain non-GAAP measures included in this results announcement,
together with the most comparable GAAP measure and descriptions of certain
non-GAAP measure, is shown below.
-------------------- ---------------------------------------------------------
Non-GAAP measure Most comparable GAAP measure
-------------------- ---------------------------------------------------------
Operating profit Operating profit
before goodwill
-------------------- ---------------------------------------------------------
Earnings before Profit after taxation
goodwill and
exceptional items
-------------------- ---------------------------------------------------------
Earnings per share Earnings per share
before goodwill and
exceptional items
-------------------- ---------------------------------------------------------
EBITDA Operating profit
-------------------- ---------------------------------------------------------
Glossary
-------------------- ---------------------------------------------------------
Useful definitions Description
-------------------- ---------------------------------------------------------
ARPU Average Revenue Per User: the amount spent by the Group's
residential subscribers in the quarter, divided by the
average number of residential subscribers in the quarter,
annualised.
-------------------- ---------------------------------------------------------
Churn The rate at which subscribers relinquish their
subscriptions, expressed as a percentage of total
subscribers.
-------------------- ---------------------------------------------------------
CRM Customer Relationship Management
-------------------- ---------------------------------------------------------
Digibox Digital satellite reception equipment
-------------------- ---------------------------------------------------------
Earnings before Profit on ordinary activities after taxation before
goodwill and goodwill and exceptional items
exceptional items
-------------------- ---------------------------------------------------------
EBITDA Earnings before interest, taxation, depreciation and
amortisation is calculated as operating profit before
depreciation and amortisation or impairment of goodwill
and intangible assets
-------------------- ---------------------------------------------------------
Effective tax rate Corporation tax charge expressed as a percentage of
Profit before Tax, goodwill, interest, exceptional items
and share of results of joint ventures
-------------------- ---------------------------------------------------------
Mainstream Corporation Current corporation tax charge for the year
Tax liability
-------------------- ---------------------------------------------------------
Multichannel viewing Share of viewers of non-analogue television
share
-------------------- ---------------------------------------------------------
Multiroom Installation of one or more additional digiboxes in the
household of an existing subscriber
-------------------- ---------------------------------------------------------
PVR Personal Video Recorder: Digital TV receiver which
utilises a built in hard disk drive to enable viewers to
record without videotapes, pause live TV, and record one
programme while watching another
-------------------- ---------------------------------------------------------
SBO Sky Box Office: Sky's pay-per-view service offering
films, sporting events and concerts
-------------------- ---------------------------------------------------------
Set-top box Digital satellite reception equipment
-------------------- ---------------------------------------------------------
Sky + Sky's fully-integrated Personal Video Recorder (PVR) and
satellite decoder
-------------------- ---------------------------------------------------------
Transponder Wireless communication devices on satellites which send
programming signals to minidishes.
-------------------- ---------------------------------------------------------
Viewing Number of people viewing a channel as a percentage of
share total viewing audience
-------------------- ---------------------------------------------------------
Consolidated Profit and Loss Account for the half year ended 31 December 2004
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Before Before Goodwill
goodwill and Goodwill and 2004/05 goodwill and and 2003/04 2003/04
exceptional exceptional Half year exceptional exceptional Half year Full year
items items Total items items Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
Notes (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (audited)
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Turnover:
Group and
share of joint
ventures'
turnover 1,983 - 1,983 1,809 - 1,809 3,738
Less: share of
joint ventures'
turnover (38) - (38) (43) - (43) (82)
Group turnover 2 1,945 - 1,945 1,766 - 1,766 3,656
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Operating
expenses, net 3 (1,591) (57) (1,648) (1,483) (58) (1,541) (3,175)
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
EBITDA 402 - 402 341 - 341 702
Depreciation (48) - (48) (58) - (58) (102)
Amortisation 8 - (57) (57) - (58) (58) (119)
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Operating profit 354 (57) 297 283 (58) 225 481
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Share of joint
ventures' and
associates'
operating
results 8 - 8 (5) - (5) 5
Loss on
disposal of
investments in
joint ventures 4,9 - (23) (23) - - - -
Profit on
disposal of
fixed asset
investments 4,9 - - - - 2 2 51
Amounts
written back
to fixed asset
investments,
net 4,9 - - - - 24 24 24
Profit on
ordinary
activities
before
interest and
taxation 362 (80) 282 278 (32) 246 561
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Interest
receivable and
similar income 15 - 15 3 - 3 10
Interest
payable and
similar charges (47) - (47) (45) - (45) (91)
Profit on
ordinary
activities
before taxation 330 (80) 250 236 (32) 204 480
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Tax on profit
on ordinary
activities 5 (96) - (96) (74) - (74) (158)
Profit on
ordinary
activities
after taxation 234 (80) 154 162 (32) 130 322
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Equity dividends 6 (77) (53) (116)
Retained profit
for the period 10 77 77 206
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
Earnings per
share - basic 7 12.1p (4.1p) 8.0p 8.4p (1.7p) 6.7p 16.6p
Earnings per
share - diluted 7 12.0p (4.1p) 7.9p 8.3p (1.6p) 6.7p 16.6p
---------------- ----- ------------ ------------ ---------- ------------ ----------- --------- ---------
All results relate to continuing operations.
There were no recognised gains or losses in either period other than those
included within the profit and loss account.
The accompanying notes are an integral part of this consolidated profit and loss
account.
Consolidated Profit and Loss Account for the three months ended 31 December 2004
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Before Three months Before Goodwill Three months
goodwill and Goodwill and ended 31 goodwill and and ended 31
exceptional exceptional December 2004 exceptional exceptional December 2003
items items Total items items Total
GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Turnover:
Group and share of joint
ventures' turnover 1,024 - 1,024 938 - 938
Less: share of joint
ventures' turnover (19) - (19) (22) - (22)
Group turnover 1,005 - 1,005 916 - 916
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Operating expenses, net (841) (28) (869) (784) (29) (813)
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
EBITDA 188 - 188 166 - 166
Depreciation (24) - (24) (34) - (34)
Amortisation - (28) (28) - (29) (29)
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Operating profit 164 (28) 136 132 (29) 103
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Share of joint ventures'
and associates'
operating results 7 - 7 (8) - (8)
Loss on disposal of
investments in
joint ventures - (23) (23) - - -
Profit on disposal of
fixed asset investments - - - - 2 2
Amounts written off
fixed asset investments - - - - (1) (1)
Profit on ordinary
activities before
interest and taxation 171 (51) 120 124 (28) 96
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Interest receivable and
similar income 8 - 8 2 - 2
Interest payable and
similar charges (25) - (25) (21) - (21)
Profit on ordinary
activities before
taxation 154 (51) 103 105 (28) 77
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Tax on profit on ordinary
activities (42) - (42) (37) - (37)
Profit on ordinary
activities after taxation 112 (51) 61 68 (28) 40
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Equity dividends (77) (53)
Retained loss
for the period (16) (13)
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Earnings per share - basic 5.8p (2.7p) 3.1p 3.6p (1.5p) 2.1p
Earnings per share -
diluted 5.8p (2.7p) 3.1p 3.6p (1.5p) 2.1p
-------------------------- ------------ ------------ ------------- ------------ ----------- ------------
Consolidated Balance Sheet at 31 December 2004
----------------------------- ------- ----------- ----------- --------
31 December 31 December 30 June
2004 2003 2004
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
----------------------------- ------- ----------- ----------- --------
Fixed assets
Intangible assets 8 360 478 417
Tangible assets 451 346 376
Investments 9 27 37 35
838 861 828
----------------------------- ------- ----------- ----------- --------
Current assets
Stocks 627 662 375
Debtors: Amounts falling due
within one year
- deferred tax
assets 45 50 49
- other 339 393 321
384 443 370
----------------------------- ------- ----------- ----------- --------
Debtors: Amounts falling due
after more than one
year
- deferred tax
assets 76 128 102
- other 36 61 42
112 189 144
----------------------------- ------- ----------- ----------- --------
Cash and liquid resources
- current asset investments - - 173
- cash at bank and in hand 707 318 474
707 318 647
----------------------------- ------- ----------- ----------- --------
1,830 1,612 1,536
----------------------------- ------- ----------- ----------- --------
Creditors: Amounts falling
due within one
year
- other creditors (1,481) (1,399) (1,170)
----------------------------- ------- ----------- ----------- --------
Net current assets 349 213 366
----------------------------- ------- ----------- ----------- --------
Total assets less current
liabilities 1,187 1,074 1,194
----------------------------- ------- ----------- ----------- --------
Creditors: Amounts falling
due after more
than one year
- long-term
borrowings (1,076) (1,077) (1,076)
- other
creditors (27) (24) (28)
(1,103) (1,101) (1,104)
----------------------------- ------- ----------- ----------- --------
Provisions for liabilities
and charges (1) - -
83 (27) 90
----------------------------- ------- ----------- ----------- --------
Capital and reserves - equity
Called-up share capital 10 960 970 971
Share premium 10 1,437 1,428 1,437
ESOP reserve 10 (23) (9) (30)
Merger reserve 10 186 262 222
Special reserve 10 14 14 14
Capital redemption reserve 10 11 - -
Profit and loss account 10 (2,502) (2,692) (2,524)
Shareholders' funds (deficit) 10 83 (27) 90
----------------------------- ------- ----------- ----------- --------
The accompanying notes are an integral part of this consolidated balance sheet.
Consolidated Cash Flow Statement for the half year ended 31 December 2004
------------------------------ ------ --------- --------- ---------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
Notes (unaudited) (unaudited) (audited)
------------------------------ ------ --------- --------- ---------
Net cash inflow from operating
activities 11a 407 401 882
Dividends received from joint
ventures 7 3 4
------------------------------ ------ --------- --------- ---------
Returns on investments and
servicing of finance
Interest received and similar
income 17 3 7
Interest paid and similar
charges (49) (51) (89)
Net cash outflow from returns
on investments and servicing
of finance (32) (48) (82)
------------------------------ ------ --------- --------- ---------
Taxation
UK corporation tax paid (25) (21) (55)
Consortium relief paid (3) (3) (3)
Net cash outflow from taxation (28) (24) (58)
------------------------------ ------ --------- --------- ---------
Capital expenditure and
financial investment
Payments to acquire tangible
fixed assets (123) (65) (132)
Receipts from sales of fixed
asset investments - 68 116
Net cash (outflow) inflow from
capital expenditure and
financial investment (123) 3 (16)
------------------------------ ------ --------- --------- ---------
Acquisitions and disposals
Funding to joint ventures and
associates (4) (2) (5)
Repayments of funding from
joint ventures and associates 6 3 6
Receipts from sale of
investments in joint ventures 14 - -
Net cash inflow from
acquisitions and disposals 16 1 1
------------------------------ ------ --------- --------- ---------
Equity dividends paid (63) - (53)
------------------------------ ------ --------- --------- ---------
Net cash inflow before
management of liquid resources
and financing 184 336 678
------------------------------ ------ --------- --------- ---------
Management of liquid resources 79 (175) (511)
------------------------------ ------ --------- --------- ---------
Financing
Proceeds from issue of
Ordinary Shares 2 10 20
Purchase of own shares for
Employee Share Ownership Plan - - (22)
Share buy-back (128) - -
Capital element of finance
lease payments - - (1)
Net decrease in debt due after
more than one year 11b - (75) (75)
Net cash outflow from
financing (126) (65) (78)
------------------------------ ------ --------- --------- ---------
Increase in cash 11b 137 96 89
------------------------------ ------ --------- --------- ---------
The accompanying notes are an integral part of this consolidated cash flow
statement.
Notes to Financial Statements
1 Basis of preparation
The interim accounts for the half year ended 31 December 2004 have been prepared
in accordance with accounting policies consistent with those applied in the
accounts for the year ended 30 June 2004, which were approved by the Directors
on 3 August 2004. The interim accounts for the six months ended 31 December 2004
do not constitute statutory accounts and are unaudited, but have been formally
reviewed by Deloitte & Touche LLP. Their report is not modified in any respect.
The interim accounts were approved by the Board on 1 February 2005.
The financial information for the 2003/04 full year is extracted from the
financial statements for that year which have been filed with the Registrar of
Companies. The auditors' report on those financial statements was unqualified
and did not contain any statement under section 237(2) or (3) of the Companies
Act 1985.
2 Turnover
The Group's turnover, whilst deriving from one class of business, has been
analysed as follows:
---------------------------- ---------- --------- ---------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
---------------------------- ---------- --------- ---------
DTH subscribers 1,426 1,285 2,660
Cable subscribers 109 103 215
Advertising 159 147 312
Sky Bet (i) 118 91 191
Sky Active (i) 46 56 116
Other 87 84 162
1,945 1,766 3,656
---------------------------- ---------- --------- ---------
(i) Additional detail has been provided with regard to the analysis of
interactive revenues between the Group's betting and games
revenues - "Sky Bet" - and other interactive revenues - "Sky Active" -
and the prior year comparatives have been restated accordingly.
3 Operating expenses, net
---------------- --------------- ---------- ---------- --------------- --------- --------- ---------
2004/05 2003/04 2003/04
Half year Half year Full year
Before goodwill Goodwill Total Before goodwill Goodwill Total Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (audited)
---------------- --------------- ---------- ---------- --------------- --------- --------- ---------
Programming(i) 808 - 808 783 - 783 1,711
Transmission
and related
functions (i) 87 - 87 77 - 77 146
Marketing 258 - 258 215 - 215 396
Subscriber
management 193 - 193 191 - 191 371
Administration
(ii) 139 57 196 131 58 189 376
Betting 106 - 106 86 - 86 175
1,591 57 1,648 1,483 58 1,541 3,175
---------------- --------------- ---------- ---------- --------------- --------- --------- ---------
(i) The amounts shown are net of GBP5 million (2003/04: half year GBP8 million;
full year GBP11 million) receivable from the disposal of programming rights
not acquired for use by the Group, and GBP14 million (2003/04: half year
GBP13 million; full year GBP28 million) receivable in respect of the
provision to third party broadcasters of spare transponder capacity.
(ii) Administration costs for the 2003/04 full year include goodwill
amortisation of GBP119 million.
4 Exceptional items
---------------------------------------- --------- --------- ---------
2004/05 2003/04 2003/04
Half year Half year Full year
charge credit credit
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
---------------------------------------- --------- --------- ---------
Loss on disposal of investments in joint
ventures (i) (23) - -
Profit on disposal of fixed asset
investments (ii) - 2 51
Amounts written back to fixed asset
investments, net (iii) - 24 24
Total non-operating exceptional items (23) 26 75
---------------------------------------- --------- --------- ---------
2004/05
(i) Loss on disposal of investments in joint ventures
On 1 November 2004, the Group sold its 49.5% investment in Granada Sky
Broadcasting for GBP14 million in cash, realising a loss on disposal of GBP23
million. This included the write back of GBP32 million of goodwill which had
previously been written off to reserves, as permitted prior to the
implementation of Financial Reporting Standard ("FRS") 10, "Goodwill and
Intangible Assets".
2003/04
(ii) Profit on sale of fixed asset investments
On 7 October 2003, the Group disposed of its listed investment in Manchester
United plc, realising a profit on disposal of GBP2 million.
On 1 March 2004, the Group sold its 20% shareholding in QVC (UK), operator of
QVC - The Shopping Channel, for GBP49 million in cash, realising a profit on
disposal of GBP49 million.
(iii) Amounts written back to fixed asset investments, net
The Group reduced its provision against its minority equity investments in
football clubs by GBP33 million, following the disposal of its investment in
Manchester United plc in October 2003 for GBP62 million in cash. The Group also
increased its provision against its remaining minority equity investments in
football clubs by a further GBP9 million.
5 Tax on profit on ordinary activities
Analysis of charge in period:
----------------------------------- --------- --------- ---------
2004/05 2003/04 2003/04
Half year Half year Full year
charge charge charge
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
----------------------------------- --------- --------- ---------
Current tax
UK corporation tax 74 69 127
Adjustment in respect of prior
years (8) (8) (8)
Total current tax charge 66 61 119
----------------------------------- -------- -------- --------
Deferred tax:
Origination and reversal of timing
differences 29 8 34
Decrease in estimate of recoverable
deferred tax asset in respect of
prior years 1 5 5
Total deferred tax charge 30 13 39
----------------------------------- -------- -------- --------
96 74 158
----------------------------------- -------- -------- --------
At 31 December 2004, a deferred tax asset of GBP12 million (2003/04: half year
GBP18 million; full year GBP13 million) principally arising from UK losses in
the Group has not been recognised. These losses can be offset only against
taxable profits generated in the entities concerned. Although the Directors
ultimately expect sufficient profits to arise, there is currently insufficient
evidence to support recognition of a deferred tax asset relating to these
losses. The losses are available to be carried forward indefinitely under
current law.
A deferred tax asset of GBP64 million (2003/04: half year GBP64 million; full
year GBP64 million) has not been recognised in respect of trading losses in the
Group's German holding companies of KirchPayTV and a deferred tax asset of GBP6
million (2003/04: half year GBP6 million; full year GBP6 million) arising
principally on other timing differences has not been recognised, on the basis
that these timing differences are not more likely than not to reverse.
A deferred tax asset of GBP450 million (2003/04: half year GBP450 million; full
year GBP450 million) has not been recognised in respect of potential capital
losses related to the Group's holding of KirchPayTV on the basis that these
timing differences are not more likely than not to reverse. The Group has
realised and unrealised capital losses in respect of football club and other
investments estimated to be in excess of GBP25 million (2003/04: half year GBP21
million; full year GBP21 million) which have not been recognised as a deferred
tax asset, on the basis that they are not more likely than not to be utilised
and thus reverse.
6 Equity dividends
----------------------------------- --------- --------- --------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
----------------------------------- --------- --------- --------
Interim proposed dividend of 4.0p
(2003/04 half year: 2.75p; 2003/04
full year 2.75p) per Ordinary Share 77 53 53
Final proposed dividend of nil
(2003/04 half year: nil; 2003/04 full
year: 3.25p) per Ordinary Share - - 63
77 53 116
----------------------------------- --------- --------- --------
The Employee Share Ownership Plan ("ESOP") has waived its rights to dividends.
7 Earnings per share
Basic earnings per share represents the profit on ordinary activities after
taxation attributable to the equity shareholders, divided by the weighted
average number of Ordinary Shares in issue during the period, less the weighted
average number of shares held in the Group's ESOP trust during the period.
Diluted earnings per share represents the profit on ordinary activities after
taxation attributable to the equity shareholders, divided by the weighted
average number of Ordinary Shares in issue during the period, less the weighted
average number of shares held in the Group's ESOP trust during the period plus
the weighted average number of dilutive shares resulting from share options and
other potential shares outstanding during the period (see below).
The weighted average number of shares in the period was:
--------------------------------------- ----------- ----------- -----------
2004/05 2003/04 2003/04
Half year Half year Full year
Millions of Millions of Millions of
shares shares shares
(unaudited) (unaudited) (audited)
--------------------------------------- ----------- ----------- -----------
Ordinary Shares 1,939 1,938 1,940
ESOP trust shares (4) (2) (2)
Basic shares 1,935 1,936 1,938
--------------------------------------- ----------- ----------- -----------
Dilutive Ordinary Shares from share
options and other potential Ordinary
Shares outstanding 2 6 8
Diluted shares 1,937 1,942 1,946
--------------------------------------- ----------- ----------- -----------
8 Intangible assets
The movement in the period was as follows:
---------------------------------- ----------
Goodwill
GBPm
(unaudited)
---------------------------------- ----------
Net book value at 1 July 2004 417
Amortisation (57)
Net book value at 31 December 2004 360
---------------------------------- ----------
Goodwill of GBP272 million, GBP542 million and GBP5 million, arising on the
acquisitions of Sports Internet Group ("SIG"), British Interactive Broadcasting
("BIB") and WAPTV Limited respectively, is being amortised over periods of seven
years on a straight-line basis.
In accordance with FRS 11, impairment reviews were performed on the carrying
values of BiB and SIG goodwill balances at the end of the first full financial
year after acquisition, at 30 June 2002, which did not indicate impairment.
Consistent with the Group strategy, the business plans on which these reviews
were based reflected significant projected increases in betting and other
interactive revenues over the subsequent five years. The Group continues to
monitor the performance of these businesses and is satisfied that no impairment
of goodwill has occurred.
9 Fixed asset investments
------------------------------ ----------- ----------- --------
31 December 31 December 30 June
2004 2003 2004
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
------------------------------ ----------- ----------- --------
Investments in joint ventures
and associates 25 34 33
Other investments 2 3 2
Total investments 27 37 35
------------------------------ ----------- ----------- --------
Investments in joint ventures
On 1 November 2004, the Group sold its 49.5% investment in Granada Sky
Broadcasting ("GSB") for GBP14 million in cash, realising a loss on disposal of
GBP23 million. This included the write back of GBP32 million of goodwill which
had previously been written off to reserves. The carrying value of this
investment prior to disposal was GBP4 million.
Other investments
On 1 March 2004, the Group sold its 20% shareholding in QVC (UK), operator of
QVC - The Shopping Channel, for GBP49 million in cash, realising a profit on
disposal of GBP49 million. The carrying value of this investment prior to
disposal was nil.
In the six months to 31 December 2003, the Group increased its provision against
its remaining minority equity investments in football clubs by GBP9 million.
On 7 October 2003, the Group announced that it had sold its entire holding in
Manchester United plc for GBP62 million, recognising a profit on disposal of
GBP2 million following the release of GBP33 million provision previously held
against the investment, effective as at 30 September 2003.
In August 2003, the Group sold its 9.9% equity investment in Chelsea Village
plc, reducing the cost by GBP25 million and the provision by GBP19 million.
10 Reconciliation of movement in shareholders' funds
--------------- --------- --------- --------- --------- --------- --------- --------- -------------
Capital Profit Total equity
Share Share ESOP Merger Special redemption and loss shareholders'
capital Premium reserve reserve reserve reserve account funds
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
--------------- --------- --------- --------- --------- --------- --------- --------- -------------
At 1 July 2004 971 1,437 (30) 222 14 - (2,524) 90
ESOP shares
utilised - - 7 - - - 5 12
Profit for
the financial
period - - - - - - 154 154
Dividends - - - - - - (77) (77)
Transfer from
merger reserve - - - (36) - - 36 -
Write back
of goodwill - - - - - - 32 32
Share buy-back (11) - - - - 11 (128) (128)
At 31 December
2004 960 1,437 (23) 186 14 11 (2,502) 83
--------------- --------- --------- --------- --------- --------- --------- --------- -------------
Goodwill
In accordance with FRS 10, "Goodwill and Intangible assets", the Company has
included the write off of GBP32 million of unamortised goodwill in the
calculation of the loss on disposal of GSB, the effect of which has been
included in the Profit for the Financial Period (see note 4). The goodwill arose
on the original purchase of GSB and had previously been written off to the
profit and loss reserve as permitted prior to FRS 10. Accordingly, an adjustment
has been made to write back the GBP32 million charge to the profit and loss
reserve.
Share option schemes
At 31 December 2004, the Group's ESOP held 3,784,392 Ordinary Shares in the
Company at an average value of GBP6.18 per share. The 963,123 shares utilised
during the period relate to the exercise of Long Term Incentive Plan, Equity
Bonus Plan, Key Contributor Plan and Executive Share Option Scheme awards.
Purchase of own shares
On 12 November 2004, the Company's shareholders approved a resolution at the
Annual General Meeting for the Company to purchase up to 97,000,000 Ordinary
Shares. During the financial period, the Company purchased, and subsequently
cancelled, 23 million Ordinary Shares at an average price of 557 pence per
share, with a nominal value of GBP11 million, for a consideration of GBP128
million. This represents 1% of called-up share capital at the beginning of the
financial period under review.
11 Notes to consolidated cash flow statement
a) Reconciliation of operating profit to operating cash flows
----------------------------- --------- --------- ---------
2004/05 2003/04 2003/04
Half year Half year Full year
GBPm GBPm GBPm
(unaudited) (unaudited) (audited)
----------------------------- --------- --------- ---------
Operating profit 297 225 481
Depreciation 48 58 102
Amortisation of goodwill and
other intangible fixed assets 57 58 119
Loss on disposal of tangible
fixed assets - 1 1
Decrease in working capital 7 62 182
Decrease in provisions - (3) (3)
Foreign exchange movement (2) - -
Net cash inflow from operating
activities 407 401 882
----------------------------- --------- --------- ---------
b) Analysis of changes in net debt
----------------------------- ------------ --------- --------- ---------
As at 31
As at 1 July December
2004 Cash flow Exchange 2004
GBPm GBPm GBPm GBPm
(audited) (unaudited) (unaudited) (unaudited)
----------------------------- ------------ --------- --------- ---------
Overnight deposits 73 144 - 217
Other cash 63 (7) - 56
136 137 - 273
----------------------------- ------------ --------- --------- ---------
Short-term deposits 338 94 2 434
Commercial paper 173 (173) - -
Cash and liquid
resources 647 58 2 707
----------------------------- ------------ --------- --------- ---------
Debt due after more than
one year (1,069) - - (1,069)
Capital element of
finance leases (7) - - (7)
Total debt (1,076) - - (1,076)
----------------------------- ------------ --------- --------- ---------
Total net debt (429) 58 2 (369)
----------------------------- ------------ --------- --------- ---------
12 Regulatory update
European Commission investigation - Football Association Premier League Limited
The European Commission's investigation into the FAPL's joint selling of
exclusive broadcast rights to football matches has not yet concluded: the
Commission published a notice last year inviting third party comments on its
intention to adopt a decision making commitments offered by the FAPL legally
enforceable and to close its file. Among other things, these commitments address
the next auction of rights by the FAPL for the 2007/08 and subsequent seasons.
The outcome of this consultation has not yet been disclosed and the Commission
has not yet adopted a decision.
The Commission confirmed last year in a "comfort letter" that, on the basis of
the performance by Sky of certain commitments given by Sky to the Commission, it
has fully and finally settled the Commission's other investigations in
connection with Sky's bids for all rights in relation to FAPL matches throughout
the 2004/05 to 2006/07 FAPL seasons and any resulting agreements between Sky and
FAPL.
European Commission Investigation - Movie Contracts
The European Commission has announced in a press release (dated 26 October 2004)
that it has settled and closed its investigations with a number of major US
movie studios into the terms of which movies produced by them are supplied to
distributors, including pay television operators, throughout the European Union.
The investigations centred on the inclusion of "most favoured nations" (MFN)
clauses in these studios' output agreements and the settlements centred on
commitments offered by the studios to phase out all MFN clauses in their output
agreements. The Commission stated in its press release that two studios had not,
however, offered to phase out such clauses, in relation to which it appears that
the Commission's case remains open. The Commission has not published any further
statement or (final or provisional) decision indicating the actual terms on
which it has closed its investigations.
European Commission Sector Inquiry - "New Media" Sports Rights
The European Commission has opened a sector inquiry regarding the conditions of
provision of audio-visual content from sports events to internet and other "new
media" companies such as 3G mobile operators. The European Commission has stated
that the purpose of its investigation is to gain as clear and wide a view as
possible of the availability of audio-visual sports rights in the European
Union, so as to ascertain whether access by "new media" operators to such
content is not unduly restricted. The Group is co-operating with this
investigation. At this stage, the Group is unable to determine whether the
investigation will have a material effect on the Group.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BRITISH SKY BROADCASTING GROUP PLC
Date: 2 February 2005 By: /s/ Dave Gormley
Dave Gormley
Company Secretary