BSkyB's profit plummets 28%

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British Sky Broadcasting shares dropped 4% to £6.63 ($13.85) after the satcaster revealed that net profit fell 28% to £84 million ($175.5 million) for the three months ending Sept. 30 on revenue up 11% at £1.2 billion ($2.5 billion).

The company said Friday that the increased costs related to new soccer contracts and the nonrenewal of its £60 million ($125.4 million)-a-year channel supply deal with Virgin Media.

BSkyB added a net 83,000 subscribers during the period, bringing its total customer base to 8.7 million, with a record 323,000 customers signing up for Sky Plus, its DVR product. Sky Broadband, the Internet service launched 14 months ago, passed the million customers mark in October.

Speaking at the company's annual general meeting in London, BSkyB chairman Rupert Murdoch said that the satcaster intends to take a "long term" view of its 17.9% shareholding in commercial broadcaster ITV despite its shares trading 35% lower than the £1.35 BSkyB paid a year ago.

"We believe it is a good long-term investment and will perform better under the new management (of executive chairman Michael Grade)," Murdoch told the gathered shareholders. "As a company, we believe it will do very well and has strong franchises."

Murdoch said that Sky will continue to attract customers by offering increased choice.

"The good news for companies like Sky is that consumers are taking charge. People everywhere will soon have the power to access a virtually unlimited wealth of information, to choose what they want from it, to add to it and create new communities that transcend old boundaries," Murdoch said. "No doubt this will be painful for some. It will threaten businesses that fail to adapt, but it will be good for our society."

The satcaster's annual general meeting turned out to be a sparsely attended affair, with fewer than five actual shareholders in a room at the Royal Institute of British Architecture, although about 80 Sky executives, not including the 12-strong board, were present as was a gallery of media.

Shareholders who did attend blamed the meeting's early timing for the fact that few were able to be present.

"Shareholders who come are usually quite elderly and cannot use their (senior citizen) rail cards before 10 a.m.," shareholder Roger Mortlock said. "It is ridiculous."
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