But there is also the reverse of the medal

Good or bad news for BSkyB When, on May 5, the results of the competition for the rights of English football for the period 2007-2010 Championship fell, the London Stock Exchange has been difficult to decide, revealing there even questions investors on prospects for the British bouquet of satellite television.

First, there are the positive aspects of this agreement: by winning 4 of the 6 main lots, bouquet led by James Murdoch the son of Rupert Murdoch, first shareholder of BSkyB through his Group News Corp. rescued essence, at least until 2010, date of expiry of the contract. Not only BSkyB guarantees its customers the best offer in qualitative terms, but the most dangerous competitors, cable operator NTL and BT telecommunications operator, came not encroach on its beds in what remains, in the eyes of the British, the "reserved domain" of BSkyB.

His new "partner", Irish Setanta, is a publisher specializing in sport which the strings are including broadcast on BSkyB, which drastically limits the risk of "leakage" of customers in the years to come. An important element at a time where churn is a variable that analysts watch closely and who alone decides sometimes stock course of action.

"BSkyB has avoided the worst scenario that would have been losing an important part of its offer of football for the benefit of one of its competitors as NTL, and estimated Credit Switzerland First Boston." Setanta is broadcast on BSkyB platform, so the potential loss of subscribers should be lower, and certainly much less than if an operator of the cable or terrestrial television won the rights and them was broadcast exclusively on its platform.

Football: costs under control

And financially, the inflation of those rights that will know BSkyB 2007 must be relative. Vastly superior to the forecasts of analysts, they will certainly rise to 438 million pounds sterling per year, compared to 340 million, or 29 more. These 340 million had represented 8.3 of the turnover of the mix in 2005. On the basis of a turnover that analysts see 4.8 billion pounds for the year will be ended in June 2008, the 438 million that BSkyB will pay for football represent only 9 of revenues. The rising costs of football is under control, which contributed substantially to reassure investors. In addition, BSkyB has clearly intended to limit its spending in other areas, such as film, to make more digestible addition.

But there is also the reverse of the medal. BSkyB lost the exclusivity of the retransmission of the English Championship, which he held since 1992 and on which he had built his success. Loss heavy symbols, but without real consequence on the industrial plan. For analysts, this episode is especially indicative of a structural trend of television, at the age of the digital and the emergence of new modes of broadcasting (digital terrestrial TV, Internet TV...). Namely, that the detention of the basic rights, whether for sport, and especially football, or film, is a key element for the success of an offer to the public.

At the time of the fragmentation of media, content, and primarily those exclusive as football, are therefore fundamental. Thus, their prices should be led to progress, as shown clearly the example of the rights of football that will bring 1.7 billion pounds in the English League, against 1.02 billion previously. Which is not bound to weigh on the margins of the broadcasters as BSkyB, who built his economic model on these rights. The group is therefore sentenced to grow its sales and margins to absorb this increase and maintain profitability. If he is confident, analysts, they are more cautious.

As soon as the announcement of this new contract, they therefore revised down their forecast of profits to the satellite from 2007-2008: 6.7 less bouquet for Merrill Lynch, 8.5 at Lehman Brothers or even 8 for UBS, thereby upgrading the action under pressure. More generally, their fears about the results explain the do-nothing BSkyB action for eighteen months in London, in the area of 500-600 pence. "The market finds that BSkyB must spend more to recruit subscribers, rights are more expensive and marketing costs are more important because of the competition." "As a result, it is concerned for the margins and sanctions action", said one London analyst.

Subscribers: growth in Bern

As a result, analysts remain very cautious about BSkyB. Conservation of the basic rights of football is certainly a good operation, but it is before all a defensive character. And, while thought to BSkyB omnipotent in the British pay-TV market, the model of the group, it is offensive, sentence today to convince, competition that much more difficult: the landscape of the cable is consolidated under the banner of NTL, digital terrestrial television is a success with Freeview and telecoms, BT top operatorsdevelop big ambitions.

"BSkyB is growth down," said a specialist. Of course, the financial results are expectations. But, quarter after quarter, the pace of growth in the portfolio of customers disappointed. As expected, BSkyB has crossed the Cape of the 8 million subscribers at the end of last year and is 10 million in 2010. A prediction that will be difficult to take, according to experts. The consensus table instead of a little more than 9 million subscribers at the same maturity.

The figures speak for themselves: in the third quarter of its fiscal year 2005-2006, BSkyB is recruited that 40,000 new subscribers, even after slightly less than analysts forecast and especially divided by 2 over the previous year. At the same time, churn rate remains at a level deemed high. 11.4 In the third quarter, it is still on the rise. But BSkyB promises to quickly back to 11 and, in the medium term to 10.

However, the group is not idle to boost its growth. In addition to the acquisition of the provider of access to Internet Easynet (see below), milestone in its process of diversification, there grow income per subscriber (Arpu) by launching new services like TV high definition (what will be done today), the Sky option which offers a decoder to drive hard and the success of which is real (the group the nominator also on very advantageous financial terms).

But, for the moment, the market is still awaiting tangible signs, the Arpu is not on an upward trend. "The share price remains vulnerable to weak operational performance, including at the level of the increase in subscribers", notes and Morgan Stanley. Valuation ratios show: BSkyB pay between 15 and 16 times the expected profits for the fiscal year that will be closed in June 2007, a ratio far below that of commercial television. The market still awaits to be satisfied by the emergence of a new virtuous for the British.