LONDON — Details of new BSkyB topper James Murdoch’s remuneration package that could see him pocket up to £5.7 million ($10 million) over three years were revealed Wednesday, as the satcaster announced a slowdown in subscriber growth.
However, its fiscal third-quarter profit rose more than sixfold, helped by the sale of its 20% stake in a home shopping channel to QVC on March 1, generating a one-time gain of about $86.8 million. Net income in the quarter that ended on March 31 increased to $199 million from $30 million a year earlier, the company said. Sales rose to $1.65 billion from $1.45 billion.
The terms of Murdoch Jr.’s contract, reportedly finalized Wednesday, are expected to make him the highest paid senior executive in British television. He took the job in November.
However, following a shareholder rebellion over payments to his predecessor, Tony Ball, the new CEO will not receive a guaranteed bonus, and his potential bonus is capped at double his basic earnings of $1.3 million.
Murdoch will also be paid $340,000 a year for each of the next three years as a relocation allowance because he moved from running Star TV in Hong Kong to taking up the reigns at BSkyB.
Under a complex scheme related to various targets, including subscriber numbers, earnings and cash-flow growth over the next three years, Murdoch could receive shares worth up to around $5 million at today’s value.
Ball, much to the fury of BSkyB investors, pocketed a $2.5 million bonus on top of his $1.3 million salary last year.
Murdoch Jr. announced 66,000 new subscribers for the quarter, below the average of 100,000 per quarter it needs to meet its target of 8 million by the end of 2005. He blamed the slow-down on his decision to scale down marketing in the traditionally weak post-Christmas quarter.
But he remained confident that he would reach his target of 8 million subscribers by the end of next year.
Media analyst Theresa Wise, senior partner at Accenture, said the rapid growth of terrestrial digital platform Freeview, now in about 3.5 million U.K. homes, posed a challenge for BSkyB, but she expected the satcaster to reach its forecast growth, provided enough money was spent on marketing the service.
At 9.4%, churn remained low and the takeup of Sky Plus — BSkyB’s personal video recorder that allows subscribers to compile their own viewing menu — was impressive, Wise added.
Average revenue per subscriber was also up from $645 to $677 per home, due to a price hike.
(Reuters and Bloomberg contributed to this report.)