– Competition –
BSkyB is facing intense competition from British telecoms firm BT, which launched its own pay-TV sports channels last year showing English Premier League football.
And BT outgunned BSkyB last November to secure exclusive rights to televise across Britain all of Europe’s Champions League and Europa League football matches for three seasons from 2015.
BSkyB, which sells also phone and Internet services to its customers, said on Friday that its annual net profit dropped 11.6 percent to £865 million in the 12 months to June, hit in part by costs linked to broadcasting rights to the Premier League, which last season was won by Manchester City.
Shares in BSkyB slumped 5.30 percent to 876 pence in afternoon deals on London’s benchmark FTSE 100 index, which was down slightly overall.
“The weakness in the share price … is reflective of the fact that the acquisition will represent a major challenge to execute, at a time of fierce competition and therefore potential growth erosion in Sky’s domestic market,” said Richard J Hunter, head of equities at Hargreaves Lansdown Stockbrokers.
“Sky is clearly taking the strategic view that Pay TV, already ingrained in the US culture, will become prevalent in Europe.”
Earlier in July, 21st Century Fox revealed that it had made an unsuccessful bid for Time Warner.
A successful bid would merge two of the world’s biggest media-entertainment empires if allowed to proceed. The initial offer was for $80 billion, a source familiar with the talks had told AFP.
Also this year, British mobile-phone group Vodafone bought Spanish cable giant Ono for 7.2 billion euros, having already snapped up Kabel Deutschland, the largest cable operator in Germany, for 7.7 billion euros in 2013.
US giant Liberty Global meanwhile took over its British rival Virgin Media last year in a deal worth $23.3 billion.
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