LONDON — British Sky Broadcasting has posted a record loss of £1.26 billion ($1.8 billion) after writing off its $1.39 billion investment in Kirch Group’s pay TV platform, Premiere World.
The satcaster, however, said it still hopes to recoup on its 22% holding in Premiere, although exactly how that will play out is to be determined.
While noting that much could change between now and October, when BSkyB can exercise its put option on its stake in Premiere, forcing Kirch to buy BSkyB’s shares, BSkyB chief exec Tony Ball said, “We’ll do whatever it takes to get the investment back.”
Ball admitted it was “possible” that Kirch, which is carrying $5 billion in debt, could go bankrupt, leaving BSkyB with no return on its investment.
Ball also maintained there was no interest in taking over Premiere, despite speculation that Rupert Murdoch’s News Corp, which controls BSkyB, is looking to use Kirch’s dilemma to further its ambitions in Germany.
Kirch owns the biggest film and TV library outside the U.S. and holds the rights to 2002 and 2006 World Cup soccer as well as formula one motor racing.
Discounting the write-off, BSkyB’s interim results to Dec. 31 were above expectations.
Operating profit was up 39% to $99.4 million on sales of $1.87 billion, up 22%. But the continued subsidizing of the company’s digital roll-out, notably the cost of set top boxes, meant BSkyB had an after-tax loss of $94.9 million.
Subscribership to BSkyB’s Sky Digital platform in the second quarter was up 218,000 homes to 5.72 million. ARPU, the average customers spend on the service over a year, increased 11% to $469 in the period.