Sky plc is a pan-European media and telecommunications company headquartered in London. It has operations in the United Kingdom, Ireland, Germany, Austria, Italy and Spain. Sky is Europe's biggest and leading media company and largest pay-TV broadcaster, with 21 million subscribers and 30,000 employees as of 2015.
Initially formed in 1990 by the equal merger of Sky Television and British Satellite Broadcasting, BSkyB became the UK's largest digital subscription television company. In 2014, after completing the acquisition of Sky Italia and Sky Deutschland, the merged company changed its name to Sky plc. Sky is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £18.75 billion (€26.76 billion) as of 2015.
Rupert Murdoch's 21st Century Fox owns a 39.14% controlling stake in the company; on 9 December 2016, following a previous attempt under News Corporation that was affected by the News International phone hacking scandal, 21st Century Fox announced it had agreed to buy the remainder of Sky, pending government approval. As of July 2017, it has been subject to government review. The Walt Disney Company announced in December 2017 that it would acquire 21st Century Fox, including the Sky stake, while Comcast made a counter-offer in February 2018.
British Sky Broadcasting was formed by the merger of Sky Television and British Satellite Broadcasting on 2 November 1990. Both companies had begun to struggle financially and were both suffering financial losses as both competed against each other for viewers. The Guardian later characterised the merger as "effectively a takeover by News Corporation".
The merger was investigated by Office of Fair Trading and was cleared a month later since many of the represented views were more concerned about contractual arrangements which had nothing to do with competition. The Independent Broadcasting Authority was not consulted about the deal; after approval, the IBA demanded precise details about the merger, stated they were considering the repercussions of the deal to ultimately determine whether BSB contracts were null and void. On 17 November, the IBA decided to terminate BSB's contract, but not immediately, as it was deemed unfair to 120,000 viewers who had bought BSB devices.
Sam Chisholm was appointed CEO in a bid to reorganise the new company, which, continued to make losses of £10 million per week. The defunct BSB's HQ, Marco Polo House were sold, 39% of the new company's employees were made redundant to leave just under 1000 employees, many of the new senior BSkyB executive roles were given to Sky personnel with many BSB leaving the company. In April the nine Sky/BSB channels had been condensed into five, with EuroSport being dropped soon after the Sky Sports launch. Chisholm also renegotiated the merged company's expensive deals with the Hollywood studios, slashing the minimum guaranteed payments. The defunct Marcopolo I satellite was sold in December 1993 to Sweden's NSAB, and Marcopolo II went to Norway's Telenor in July 1992 after the ITC was unable to find new companies to take over the BSB licences and compete with BSkyB. News International received 50%, Pearson PLC 17.5%, Chargeurs 17.5%, Granada 12%, Reed International 2% of the new shares in the company.
By September 1991, the weekly losses had been reduced to £1.5M a week, Rupert Murdoch said "there were strong financial marketing and political reason[s] for making the compromise merger instead of letting BSB die. Many of the lessons had been learnt with more than half the running cost of the combined company". Further cuts in losses were a direct result of 313,000 new customers joining during the first half of 1991. By March 1992, BSkyB posted its first operating profits, of £100,000 per week, with £3.8 million weekly from subscriptions and £1 million from advertising, but continued to be burdened with £1.28 billion of debt. James Capel forecast BSkyB would still be indebted in 2000.
In the autumn of 1991, talks were held for the broadcast rights for Premier League for a five-year period, from the 1992 season. ITV were the current rights holders for the Football League, and fought hard to gain the new rights. ITV had increased its offer from £18m to £34m per year to obtain the new rights. BSkyB joined forces with the BBC to make a counter bid. The BBC was given the highlights of most of the matches, while BSkyB paying £304m for the Premier League rights, would give them a monopoly of all live matches, up to 60 per year from the 1992–93 season.  Murdoch has described sport as a "battering ram" for pay-television, providing a strong customer base. A few weeks after the deal, ITV went to the High court to get an injunction as it believed their details were leaked before the decision was taken. ITV also asked the Office of Fair Trading to also investigate since it believed Rupert Murdoch's media empire via the newspapers had influence the deal. A few days later neither action took effect, ITV believed BSkyB was telephoned and informed of its £262m bid, and Premier League advised BSkyB to increase its counter bid.
Following a lengthy legal battle with the European Commission, which deemed the exclusivity of the rights to be against the interests of competition and the consumer, BSkyB's monopoly came to an end from the 2007–08 season. In May 2006, the Irish broadcaster Setanta Sports was awarded two of the six Premiership packages that the English FA offered to broadcasters. Sky picked up the remaining four for £1.3bn.
In October 1994, BSkyB announced its plans to float the company on the UK and US stock exchanges, selling off 20% of the company. The stock flotation reduced Murdoch's holding to 40 percent and raised £900m, which allowed the company to cut its debt in half. Sam Chisholm said "By any standards this is an excellent result, in every area of the company has performed strongly". Chisholm, became one of the world's most highly paid television executives.
In 1995, BSkyB opened its second customer management centre at Dunfermline, Scotland, in addition to its original centre at Livingston which opened in 1989. BSkyB entered the FTSE 100 index, operation profits increased to £155M a year, and Pearson sold off its 17.5% stake in the company.
Sam Chisholm resigned from BSkyB due to a rift with Rupert Murdoch. A week later, Murdoch was quoted as saying "I cannot understand the fuss; BSkyB was grossly overpriced", which caused further rifts with the new management.
In 1997, BSkyB formed a partnership with Carlton and Granada to bid for the right for the new digital terrestrial network. In June, it was awarded the right to start the service, ONdigital under the condition BSkyB withdrew from the group's bid.
In February 2003 BSkyB wished to renegotiate its deal with MTV to reduce its payment from £20m. Chief executive Tony Ball said "We're definitely prepared to stare them down if we can't get a sensible deal, MTV, and other channels, have done particularly well out of the growth of Sky but the opportunity for savings is now there and Sky will be taking it," he added. "MTV has done extremely well out of that original deal." On 17 April 2003 BSkyB launched its own range of music channels Scuzz and Flaunt with The Vault being added in Summer 2003, as part of its plan to create its own original channels for the platform. Within 18 months the channels failed to make impact, and were outsourced to the Chart Show Channels company.
Shortly afterwards it acquired Artsworld, giving a majority of subscribers full access to the channel. The buyout was part of James Murdoch's strategy to improve the perceptions BSkyB which could lead to potential new subscribers. John Cassy, the channel manager of Artsworld, said: "It is great news for the arts that a dedicated cultural channel will be available to millions of households."
In early 2007 Freeview overtook Sky Digital with nearly 200,000 more subscribers at the end of 2006, while cable broadcaster Virgin Media had three million customers.
Virgin1 was also a part of the deal and was rebranded as Channel One on 3 September 2010, as the Virgin name was not licensed to Sky. The new carriage deals are understood to be for up to nine years.
On 20 July 2010, The Office of Fair Trading announced that they would review BSkyB's acquisition of the Virgin Media Television business to judge whether it posed any competition concerns in the UK. The OFT planned to investigate the deal to see whether it could constitute a qualifying merger under the Enterprise Act 2002. The watchdog invited interested parties from the industry to comment on the sale, including its potential impact on the pay-TV market. On 14 September 2010, the OFT decided not to refer BSkyB's takeover of Virgin Media's TV channels to the Competition Commission.
In June 2010, News Corporation made a bid for complete ownership of BSkyB. However, following the News International phone hacking scandal, critics and politicians began to question the appropriateness of the proposed takeover. The resulting reaction forced News Corp. to withdraw its bid for the company in July 2011. The scandal forced the resignation of James Murdoch, who was the chairman of both BSkyB and News International, from his executive positions in the UK, with Nicholas Ferguson taking over as Chairman of BSkyB.
On 28 June 2013, News Corporation was split into two publicly-traded companies; the company's publishing operations (including News International, renamed News UK) and broadcasting operations in Australia were spun into a new company known as News Corp, while the company's broadcast media assets, including its 39.14% stake in Sky, were re-named 21st Century Fox.
On 12 May 2014, BSkyB confirmed that it was in talks with its largest shareholder, 21st Century Fox, about acquiring 21st Century Fox's 57.4% stake in Sky Deutschland and its 100% stake in Sky Italia. The enlarged company (dubbed "Sky Europe" in the media) will consolidate 21st Century Fox's European digital TV assets into one company. The £4.9 billion takeover deal was formally announced on 25 July, where BSkyB would acquire 21st Century Fox's stakes in Sky Deutschland and Sky Italia. BSkyB also made a required takeover offer to Sky Deutschland's minority shareholders, resulting in BSkyB acquiring 89.71% of Sky Deutschland's share capital. The acquisitions were completed on 13 November. British Sky Broadcasting Group plc changed its name to Sky plc to reflect the European acquisitions, and the United Kingdom operations were renamed Sky UK Limited. Sky plc bought out the remaining minority shareholders in Sky Deutschland during 2015, using a squeeze-out procedure to obtain the remaining shares and delist Sky Deutschland on 15 September 2015.
On 9 December 2016, 21st Century Fox announced that it had made an offer to acquire the remainder of Sky plc for £11.7 billion at a value of £10.75 per-share. It marks Fox's second attempt to take over Sky, as its previous attempt under News Corporation was affected by the News International scandal. The two companies reached an agreement on the deal on 15 December; it is subject to regulatory approval.
On 29 June 2017, culture secretary Karen Bradley recommended that the deal be subject to a six-month review by the Competition and Markets Authority to examine its overall effects on the industry. Ofcom had expressed concern that this deal would give the Murdoch family "material influence over news providers with a significant presence across all key platforms" and "increased influence over the UK news agenda and the political process". However, the regulator did deem a Fox-owned Sky would be "fit and proper" to hold broadcast licences, despite the recent sexual harassment controversies that had emerged at the U.S. Fox News Channel, as there was no evidence to the contrary. Avaaz filed an opposition to Ofcom's assessment that 21st Century Fox would be "fit and proper" to own Sky and its broadcast licences, alleging Ofcom "made mistake after mistake in deciding to give the Murdochs a clean bill of health to take over more of our media".
In October 2017, Sky told the CMA that it would be prompted to review the position of Sky News if "the continued provision of Sky News in its current form unduly impeded merger and/or other corporate opportunities available in relation to Sky's broader business." This implied that closing the channel entirely was an option if it hindered the sale; Sky News has operated on a loss of at least £40 million per-year.
On 14 December 2017, The Walt Disney Company announced that it would, in turn, acquire 21st Century Fox, including its stake in Sky plc, barring specific U.S. assets. Fox stated that this purchase would "not alter [its] full commitment and obligation to conclude our proposed transaction." Analysts suggested that Disney's proposed transaction could ease regulatory concerns over Fox's purchase of Sky, as the company will eventually lose its ties to the Murdoch family. Disney also has a narrower scope of media ownership in the country than the Murdoch family. Sky already has a relationship with Disney for its Sky Cinema service, holding pay television rights to its films in the United Kingdom and operating a dedicated Sky Cinema channel devoted to Disney content.
In a preliminary report issued 23 January 2018, the Competition and Markets Authority assessed that, in its present form, the proposed transaction was not in the public interest. Citing the plurality of media that the Murdoch family would control, the CMA recommended that Sky News either be "insulated" from the Murdoch trust or divested, so that it is editorially independent from the Murdoch family. The final report is expected to be presented to the government by May. On 20 February 2018, Fox issued a proposed package of concessions to the CMA, including an independent editorial board and 10-year funding commitment for Sky News. This commitment would be inherited by Disney if it were to go ahead with its own purchase.
On 27 February 2018, Comcast, a competing conglomerate with interests in media (NBCUniversal, owner of the film studio Universal Pictures and U.S. media rights to the Premier League) and telecom (including cable internet and television services), made a £22.1 billion counter-offer for Sky, at a value of £12.50 per-share. The Wall Street Journal reported that Fox had declined a US$60 billion acquisition offer by Comcast in favour of its deal with Disney, due to anti-competition concerns. NBCUniversal CEO Steve Burke stated that purchasing Sky would roughly double its presence in English-speaking markets, and allow for distribution synergies between NBCUniversal and Sky's respective networks and in-house studios (such as Sky producing programmes for U.S. broadcast on NBCUniversal properties, and vice versa with Sky's European properties). Fox stated that it "remains committed to its recommended cash offer for Sky", and that Comcast had not yet made a "firm offer".
On 3 April 2018, Fox proposed additional remedies to satisfy regulatory concerns, including Disney having offered to acquire Sky News. The proposed sale would be a separate transaction from Disney's proposed acquisition of 21st Century Fox assets, and not be conditional on its completion.
The first CEO of BSkyB was Sam Chisholm, who was CEO of Sky TV before the merger. Chisholm served in this position until 1997. He was followed by Mark Booth who was credited with leading the company through the introduction of Sky. Tony Ball was appointed in 1999 and completed the company's analogue to digital conversion. He is also credited with returning the company to profit and bringing subscriber numbers to new heights. In 2003, Ball announced his resignation and James Murdoch, son of Rupert Murdoch was announced as his successor. This appointment caused allegations of nepotism from shareholders.
On 7 December 2007, it was announced that Rupert Murdoch would be stepping down as BSkyB's non-executive chairman and would be replaced by his son, James. In turn, James stepped down as CEO of BSkyB, to be replaced by Jeremy Darroch.
The current 13 company directors include James Murdoch (chairman), Nicholas Ferguson (chief executive), David Darroch (chief executive officer), Andrew Griffith (chief executive officer), Martin Gilbert (chief executive officer), Matthieu Pigasse (managing director), Tracy Clarke (bank executive), David Lewis (chief executive officer), Andrew Sukawaty (manager), Adine Axen (director), John Nallen (company director) and Charles Carey (chief executive officer and president).
Financial results have been as follows:
|Year ended||Revenue (£m)||Profit/(loss)
before tax (£m)
|30 June 2017||12,916||803||691|
|30 June 2016||11,965||752||663|
|30 June 2015||9,989||1,516||1,952|
|30 June 2014||7,632||1,082||865|
|30 June 2013||7,235||1,257||979|
|30 June 2012||6,791||1,189||906|
|30 June 2011||6,597||1,014||810|
|30 June 2010||5,709||1,173||878|
|30 June 2009||5,359||456||259|
|30 June 2008||4,952||60||(127)|
|30 June 2007||4,551||815||499|
|30 June 2006||4,148||798||551|
|30 June 2005||4,048||631||425|
|30 June 2004||3,656||480||322|
|30 June 2003||3,186||128||190|
|30 June 2002||2,776||(1,276)||(1,383)|
|30 June 2001||2,306||(515)||(539)|
|30 June 2000||1,847||(263)||(272)|
|30 June 1999||1,545||(389)||(285)|
|30 June 1998||1,434||271||249|
|30 June 1997||1,270||314||288|
|30 June 1996||1,008||257||–|
|30 June 1995||778||155||–|
|30 June 1994||550||93||–|
|30 June 1993||380||(76)||–|
|30 June 1992||233||(188)||–|
|30 June 1991||93||(759)||–|
|Sky UK Ltd
The original Sky Television plc, now a holding company for Sky plc's United Kingdom operations.
|Sky Subscriber Services Ltd
Operating company for the Sky pay-television service.
|Sky In-Home Services Ltd
Home installations of satellite dishes and set-top boxes.
|Sky Broadband Ltd and Sky Home Communications Ltd
Operating companies for Sky's broadband and telephony services, including Be Un Limited which was acquired from Telefónica UK/O2.
Operating company for Sky pay-television service in Ireland.
|Sky Italia Srl
Operating company for Sky pay-television service in Italy.
|Sky Deutschland AG
Operating company for Sky pay-television service in Germany and Austria.
In September 2017, Sky launched an over-the-top video streaming service in Spain, featuring content from 21st Century Fox, Disney, NBCUniversal, Turner and Viacom.
A video on demand movie rental service.
British electronics company acquired by BSkyB.
Wi-Fi provider acquired by BSkyB.
|A&E Networks UK (50%) – with A&E Networks. Operates History, Lifetime and CI channels.|
|Arena Racing Company (48.5%) Operates At the Races|
|Australian News Channel Pty Limited (33.3%) – with Seven Network and Nine Entertainment Co. Operates Sky News Australia|
|Ginx TV Ltd (50%) - with ITV plc|
|Nickelodeon UK Ltd (40%) – with Viacom International Media Networks Europe, part of Viacom. Operates Nickelodeon and associated channels|
|Love Productions (70%)|
|Comedy Central (UK and Ireland) (25%) – with Paramount British Pictures, part of Viacom/National Amusements|
|DTV Services Ltd (20%) – with Arqiva, BBC, Channel 4 and ITV plc. Manages and markets the Freeview brand.|
ITV plc has been the subject of a flurry of rumoured take-over and merger bids since it was formed. For example, on 9 November 2006, NTL announced that it had approached ITV plc about a proposed merger. The merger was effectively blocked by BSkyB on 17 November 2006 when it controversially bought a 17.9% stake in ITV plc for £940 million, a move that attracted anger from NTL shareholder Richard Branson and an investigation from media and telecoms regulator Ofcom. On 6 December 2006, NTL announced that it had complained to the Office of Fair Trading about BSkyB's move. NTL stated that it had withdrawn its attempt to buy ITV plc, citing that it did not believe that there was any possibility to make a deal on favourable terms. On 17 July 2014, BSkyB's 6.4% stake in ITV was sold to Liberty Global, valued at £481 million.
Freeview is managed by DTV Services Ltd, a company owned and run by its five shareholders – BBC, BSkyB, Channel 4, ITV and Arqiva.