The ever-improving prospects of satellite TV venture British Sky Broadcasting helped pump up the pretax profits of the media group Pearson by 38% to T208.6 million ($ 310 million) last year.
BSkyB, in which Pearson owns a 17.5% stake, made its first positive impact on the company’s bottom line, with a profit contribution of $ 10.3 million.
More significantly, Pearson is now so confident about BSkyB’s future that it has felt able to write back the $ 107 million provision that the media group made against its investment in the satellite broadcaster three years ago.
Thames TV, the former ITV broadcaster turned indie producer that Pearson bought for $ 150 million last July, also made its first profit contribution, a healthy $ 9.7 million.
Pearson is attempting to pursue an aggressive expansion strategy in TV, but this remains just a small part of the group’s activities, which are dominated by book publishing — it owns Penguin and Longman — and by newspapers, including the flagship Financial Times.
Group sales for 1993 totaled $ 2.8 billion, up 14%, with books accounting for $ 1.2 billion and newspapers for $ 576 million. TV weighed in at a puny $ 55 million, up from next to nothing in 1992.
Last year Pearson announced plans to refocus as a media group, pulling out of its unrelated oil and fine china businesses. It raised $ 300 million from selling 55% of its Camco oil services company, and hived off Royal Doulton into a separate company.
But Pearson failed in its bid to acquire pan-Asian satcaster Star TV, the hoped-for centerpiece of its media strategy, leaving the group’s TV holdings looking sketchy and underdeveloped. The company says it is scouting for investment opportunities in Europe and Asia, but nothing has materialized.
Thames execs told Daily Variety recently that they were negotiating to acquire an unnamed Hollywood production firm. Nick Alexander, who resigned recently as chief exec of Sega Enterprises in Europe, is widely rumored to be joining Pearson as the spearhead of its new media strategy.