Former BBC Daytime controller Liam Keelan was originally named dirctor of BSkyB‘s flagship Sky 1 HD back in December, but he later pulled out to move to BBC Worldwide. After opening up the search again, Sky has now named Adam MacDonald to oversee the channel. MacDonald joins from A+E Networks UK – a joint venture of A+E Networks and News Corp.-controlled BskyB – where he’s VP of programming. Former Sky 1 director Stuart Murphy has been bumped up to oversee Sky’s entertainment portfolio Sky 1, Sky Living, Sky Atlantic, Sky Arts, Challenge and Pick TV. Sky 1 was named Channel of the Year at the Broadcast Awards in 2012 and overall, Sky has commited £600M ($975M) for UK content and production across all of its channels by 2014. Among upcoming projects, Sky Atlantic is co-producing The Tunnel and biopic Fleming; Sky Arts has the Playhouse Presents series in the pipeline with talent that includes Anna Friel, Matt Smith, Idris Elba and Vanessa Redgrave and Sky Living is co-producing NBC series Dracula.
Upping the stakes in its rivalry with Virgin Media, News Corp.-controlled BSkyB will acquire the broadband and fixed-line telephone business of Telefonica UK making Sky the second-largest broadband provider in the market. The company is adding more than half a million subscribers via the deal for about 4.7M total, which puts it about 200,000 ahead of Virgin – itself the subject of a takeover by John Malone’s Liberty Global. Sky is paying £180M for Telefonica’s consumer broadband, home phone and line rental customers and up to £20M in contingency fees. The acquisition, expected to complete in April, is subject to regulatory clearance.
The deal gives BSkyB exclusive rights to Disney‘s new and classic titles and includes the creation of pay-TV channel Sky Movies Disney, which beings airing March 28, Bloomberg reports. Under the agreement, BSkyB will have first-run rights to the newest Disney films including Brave, Tinker Bell: Secret Of The Wings and Wreck-It Ralph. Older Disney films, including Finding Nemo, Cars and A Bug’s Life, also will be available on the channels. The deal also gives BSkyB first-run rights to show movies from Lucasfilm and Marvel Studios, such as Iron Man 3 and The Avengers across other Sky channels. BSkyB is about 40 percent owned by Rupert Murdoch’s News Corp.
UK telecommunications provider BT is negotiating to buy soccer rights from ESPN as the Disney-owned channel explores an exit from the UK, the Financial Times reports. BT aims to launch as many as three sports channels offering soccer, rugby and other sports content the company has already secured for about £1B ($1.6B). The ESPN rights that may be up for grabs to BSkyB as well as BT include games from the German Bundesliga, the Europa League and the English Football Association Cup. Interest in sports rights has driven up costs for broadcasters globally as well as in the U.S. The rights in question might cost £20M ($32M) or more annually. Last summer BT paid £738m ($1.18B or about $394M per season) for the rights to 32 Premier League football games for three years in a competition that split rights with News Corp’s BSkyB. ESPN was outbid in that contest and lost the rights. BT has acquired additional rights as well and is preparing the multiplatform sports service for a pre-summer launch.
Sky and Sony Pictures Television have signed a new multi-year agreement giving the News Corp-controlled group first window rights to the studio’s new and classic movies in the UK and Ireland. BSkyB made the announcement this morning as it reported better-than-expected fiscal first half results. Operating profit for the six months ended December 31 was up 8% to £647M ($1.02B) versus £601M ($951M) in the last comparable period. The leading satcaster noted this morning that, “In a tough economic environment, more customers are taking more products and spending more money with Sky.” In the three months to December 31, the company added 615,000 products and 88,000 new subscribers for a total base of 10.7M. The period saw particular growth of weekly On Demand downloads, up 150%, and users of the recently-launched Sky Go service also increased by 46% to 3.1M. Chairman Jeremy Darroch commented, “Although we expect the consumer environment in 2013 to remain challenging, we have a strong set of plans for the year ahead.
‘The Following’ Gets Killer Ratings On Sky Atlantic
Kevin Bacon serial killer drama The Following had a solid debut on Fox in the U.S. on Monday and on Tuesday premiered on UK pay channel Sky Atlantic. In the 10PM-11PM slot, the violent horror thriller drew an average of 270,000 viewers for a 1.4% share. The numbers may not sound earth-shattering but they were more than 636% higher than the slot average over the past three months, The Guardian reported. Meanwhile, the premiere of Downton Abbey creator Julian Fellowes’ reality show about English manses, Great Houses With Julian Fellowes, drew 2.2M viewers on ITV at 9PM for an 8.8% share on Tuesday.
Makers Of ‘Rake’, ‘Saving Mr. Banks’ Feted
Australia’s Essential Media and Entertainment, producers of TV legal drama The Rake and Saving Mr. Banks, the film about Australian author P.L. Travers and the making of Mary Poppins starring Tom Hanks and Emma Thompson, has been named Independent Producer of the Year. The award was made by the Screen Producers Association of Australia. Essential and Sony Pictures TV are planning a U.S. pilot remake of Rake for Fox Broadcasting starring Greg Kinnear. Headed by Chris Hilton, Ian Collie, Sonja Armstrong and Carmel Travers, Essential Media’s slate also includes the Jack Irish crime drama telemovies starring Guy Pearce for Australia’s ABC, My Brother, the Serial Killer for Discovery Channel, and Raising The Curtain, a celebration of Australia’s history of live theater. - Don Groves
In a blow to comers Netflix and Lovefilm, the UK’s Sky has entered a new multi-year deal with NBCUniversal International Television Distribution that will give it exclusive rights to current, upcoming and library film titles for its Sky Movies service. The pact will give customers an exclusive first window to Universal films after their theatrical runs for at least a year. Titles covered include The Bourne Legacy, Snow White And The Huntsman, Ted and, down the road, Les Miserables, Anna Karenina and Despicable Me 2. All movies will also be available on Sky’s recently-launched video on demand service Now TV.
The deal comes on the heels of September’s exclusive arrangement with Warner Bros. for recent and upcoming titles. That extended agreement was Sky’s first with a Hollywood major since Netflix appeared on the scene at the beginning of 2012. It was also the first pact announced with a major after the UK’s Competition Commission confirmed this summer that the News Corp-controlled Sky does not have a material advantage over its rivals in the first window pay-TV arena. These latest agreements mean that Sky retains exclusive first window rights to films from all of the Hollywood majors.
UPDATE, 5:15 AM: James Murdoch has been re-elected as a non-executive director of BSkyB. Murdoch won more support at today’s shareholder meeting in London than he had at the last one when he was still chairman of the pay-TV group. Although some investors opposed his retaining a seat, only 4.98% of proxy voters wanted him out this year compared to 19% last year. One shareholder, alluding to the troubles at News Corp.’s UK newspapers, asked if the name Murdoch is now “toxic,” but chairman Nicholas Ferguson replied there had been no negative impact on company business.
PREVIOUS, 3:19 AM: BSkyB earnings were up 16% in the fiscal first quarter on revenue of £1.715B (+4%) and operating profit of £310M (+5%). The increases came as the pay-TV giant offered new products and added 20,000 net customers to its subscriber base, for a total of about 10.7M subscribers. In response to competition in the UK streaming arena from Netflix and Amazon’s Lovefilm, BSkyB added Now TV during this quarter, a service that allows non-Sky customers to access movies on demand. It also agreed to pay £760M per season for rights to the English Premier League soccer games through 2014 (NBC just acquired rights in the States for a reported $83M per year).
Britain’s leading pay-TV group, BSkyB, reported increased revenues this summer for the year ended June 30 and a record jump in operating profit to £1.22B ($1.98B). Directors at the News Corp.-controlled company also saw increased payouts for the year. The BSkyB annual review, mailed to shareholders yesterday, reveals that chief exec Jeremy Darroch received about £7.3M ($11.85M) in total remuneration and share awards including a maximum bonus of £1.87M ($3M). His total package this year reps a 7% jump on salary, bonus, pension and benefits for the previous period. His base salary rose to £935K ($1.5M) from £888K. James Murdoch, who stepped down as chairman of BSkyB in April but remains a non-executive director, made £1.045M ($1.7M) annually when he was chief exec of the company for four years until Dec. 2007, according to The Guardian. He was paid a salary of £89,417 ($145,160) this year. Nicholas Ferguson, who took over as chairman when Murdoch left, got a nearly 50% bump bringing his salary to £230,657 ($374.450).
UPDATE: News Corp. “is pleased” with the UK regulator’s decision that BSkyB is fit to hold a broadcast license. But, the company took issue with Ofcom’s stance on former chairman James Murdoch, whose actions were called “ill-judged.” News Corp. said: “We disagree with with certain of the report’s statements about James Murdoch’s prior actions as an executive and Director, which are not at all substantiated by evidence.” (Full statement below)
PREVIOUS, 12:01 AM PT: Sky has passed the “fit and proper” test. British regulator Ofcom has concluded its months-long consideration of whether the satcaster is fit to hold a broacast license in light of phone hacking and other allegations surrounding News Corp.-controlled media properties in the UK. News Corp. owns 39% of Sky. The org today said: “There is no evidence that Sky was directly or indirectly involved in any of the wrongdoing either admitted or alleged to have taken place” at News Of The World or at The Sun. However, Ofcom was critical of James Murdoch, who stepped down as chairman of BSkyB in April this year. The org said today: “The evidence available to date does not provide a reasonable basis to find that James Murdoch… was complicit in a cover up” at the News International newspapers. But, while Murdoch was exec chairman of News International, Ofcom says it considers his conduct, “including his failure to initiate action on his own account on a number of occasions, to be both difficult to comprehend and ill-judged.”
Regarding his father, Ofcom says it does not consider the evidence currently available “provides a reasonable basis on which to conclude that Rupert Murdoch acted in a way that was inappropriate in relation to phone hacking, concealment or corruption by employees of [News Group Newspapers] or News International.” It also gave a pass to News Corp., saying it has no evidence to “reach any conclusion that News Corporation acted in a way that was inappropriate in relation to phone hacking, concealment, or corruption.”
As it increases its investment in original British fare, Sky has acquired Parthenon Media Group to establish an international distribution arm within the company. Parthenon founder and CEO Carl Hall will oversee the new business. Sky has said it intends to up its annual spend on British content creation to £600M by 2014. Funds generated by sales of its original programming will be funneled back into UK production. Among shows commissioned this year are dramas and comedies starring Hayley Atwell, Brenda Blethyn, Stephen Fry, Richard E. Grant, John Hurt, Eddie Marsan, Stellan Skarsgård, David Tennant, Emma Thompson and Olivia Williams. Sky1 comedies Stella, Starlings and Trollied have all been ordered for a second run and drama Hit & Miss, starring Chloe Sevigny, started its run in May. The indie Parthenon has distributed and produced factual and children’s programming since 2002 and has 1,400 hours in its catalog, according to its website. As of June 30, 2011 it had gross assets of £18.2M, although financial terms for the Sky deal were not disclosed.
Also joining in the payment to the streaming media player maker are Menlo Ventures, Globespan Capital Partners — and an “unnamed strategic investor” that the Wall Street Journal identified as Dish Network. Roku says it will use the cash for advertising, to expand overseas, and to develop more sophisticated offerings. It hopes to build on its early start in sales of devices that bring streamed video and audio services including Netflix and Pandora to the living room. This fall it will introduce the Roku Streaming Stick, which it describes as “a wireless, dongle-sized streaming device that seamlessly integrates with newer TVs and consumer electronics devices.” With the investment, News Corp Chief Digital Officer Jon Miller will join the Roku board. “Roku’s significant technology advantage, coupled with a strong market position, places them in a unique position to be an integral part of the television landscape for years to come,” he says. Rupert Murdoch’s company owns about 39% of BSkyB. Roku founder and CEO Anthony Wood says that with the new relationships with News Corp and BSkyB “we are poised to further grow our leadership position and to become the TV distribution platform of the future.” Not for nothing: Dish and Fox are battling each other in court over whether the satellite company’s Hopper DVR — which can automatically skip over recorded broadcast TV ads — infringes on Fox’s copyrights.
BSkyB Reports Record Financials …
Revenues at Britain’s leading satcaster, BSkyB, were up 4.5% to £6.79B for the year ended June 30, 2012. Operating profit jumped a record 14% to £1.22B at the company which is 39% controlled by News Corp. Sky now has 10.6M subscribers in the UK, having added 312,000 in the past year. The biggest growth is in triple-play with 3.4M now turning to Sky, a 21% increase on the previous year. Sky also recently launched internet TV service NOW TV and its free-to-air catch up service, Sky Anytime, will launch in the fall on the on-demand players of rival networks. In reporting the results, chief exec Jeremy Darroch talked up the recent Tour de France win of Bradley Wiggins. “We are proud to have played our part in the wonderful achievement of Team Sky and Bradley Wiggins, who created sporting history this week by becoming the first British winner of the Tour de France… We all hope that success at the Tour de France will add fuel to Britain’s cycling boom and inspire a whole new generation to get on their bikes.” The company also announced it would expand telephone and broadband services to the Republic of Ireland later this year.
Last week, Rupert Murdoch resigned from the board of News International, the holding company of News Corp’s UK newspapers, as well as other subsidiary boards connected with News Corp in the UK and the U.S. News Corp explained the move as corporate housecleaning ahead of a restructure that will split the conglomerate into two distinct publishing and entertainment companies. Some watchers have been skeptical, suggesting this is a further step in putting distance between Murdoch and the UK print assets that have been embroiled in a phone-hacking and bribery scandal for more than a year. The taint was emphasized today when eight former employees of the now-shuttered News Of The World, including erstwhile News International chief exec Rebekah Brooks, were informed they would face criminal charges in relation to phone hacking. Other watchers see this as potentially setting the stage for a sale by News Corp of the UK papers which now include The Sunday Times and tabloid The Sun. If Murdoch no longer sits on the News International board, in other words, it makes it more plausible for a sale of that company to go through down the line. Still another view is that distancing himself from his beloved British press holdings is a means to clear the way for the acquisition of the long-coveted 61% stake in British satcaster BSkyB that News Corp does not already own.
In its annual report, the BBC today revealed it has reduced talent pay by £9.5M ($14.8M) in the last year. There are still a handful of show hosts earning more than £1M, but an austerity drive is aiming to keep paydays in check. On the executive side, outgoing director general Mark Thompson took a £157K pay cut this year, but still earned 15 times more than the average BBC employee. Total income was £5.086B in 2011/12, up a touch from £4.993B in the previous period. Spend in the creative economy was also up, to £489M versus £467M a year earlier. But, the group said it will keep current levels of spend on BBC1 and reduce spending on BBC2′s daytime schedule. In the past year, the BBC has cut its senior managers by 24.4% and has achieved efficiency savings of £500M. In total, the broadcaster is looking to deliver £700M in savings per year by 2016/17.
A report commissioned by BSkyB detailing the company’s economic footprint hopes to provide “a good example of the important contribution that a successful British company can make, particularly at a time when economic growth is harder to come by.” The report also comes at the same time as UK regulator Ofcom is deciding whether it is fit to hold a broadcast license in light of the scandals at News Corp-controlled newspapers. News Corp owns 39% of BSkyB and the consideration of whether a licensee is “fit and proper” takes into account any relevant misconduct of those who manage and control it.
A major question swirling around News Corp since last week’s announcement that the company will divide itself in two has been whether another run will be made at the 61% of British satcaster BSkyB that News Corp does not already hold. UK regulator Ofcom is currently weighing whether News Corp is fit to own a broadcast license at all in light of the phone-hacking scandal at its UK print business. And, although the org isn’t commenting publicly, I understand that News Corp’s intent to divide may be taken into consideration for the “fit and proper” test. All information and evidence that’s available will continue to be assessed as the process is ongoing, I’m hearing. There is no time frame for Ofcom’s decision, but contrary to some reports, no announcement is expected before the Olympics later this month.
Although News Corp chief Rupert Murdoch told Fox News last week, “We’ve moved on in our thinking….I’m much more bullish about America,” Panmure Gordon media analyst Alex De Groote tells me he thinks another attempt to acquire BSkyB will happen “two to three years down the line.” He calls the move to split News Corp “tactically quite shrewd” as it detaches the tainted UK print assets from the entertainment division. But, he says, “Even if phone hacking had never happened, shareholders would have legitimately pushed” to separate the businesses. De Groote calls it getting away from what’s known as “the conglomerate discount”, which reflects the difference between what a conglom’s holdings are worth and the real value the market places on the whole. He adds that “Everything is about survival in the long term. In the short term, it’s sacrifice the British newspapers and everybody who gets in the way. The long term is preserving the Murdoch family and the medium term is to get BSkyB.”
The News Corp CEO just said in an interview on Fox News that his son is happy running his businesses in Australia. And there’s no decision yet about whether Rupert’s other kids — including James and Elisabeth Murdoch — might play bigger roles once the media giant is divided into an entertainment company and a publishing one. “They have to earn it, and they have to want it,” Rupert says. He also told interviewer Neil Cavuto that he’s no longer interested in BSkyB. “We’ve moved on in our thinking….I’m much more bullish about America.” Europe is in for “a tough, long haul” and possibly a recession, while “we’ve got things to be very bullish about in this country.” No, he isn’t tacitly endorsing President Obama. “I’m taking a medium and long term view” of the economy. Indeed, he says that the presidential election might not have a big impact on News Corp although “if taxes go up, we’ll have less cash. If that happens, the economy will go down.”