21st Century Fox’s Sky Deutschland Boosts Sales, Trims Losses in 2013

Sky Deutschland, the German pay-TV operator controlled by Rupert Murdoch‘s 21st Century Fox, is still in the red but the slowly, slowly approach by Sky Deutschland CEO Brian Sullivan continues to pay dividends in the form of increasing revenues, shrinking losses and a growing subscriber base.

In full year figures released Friday, Sky reported total revenues of $2.12 billion (€1.546 billion) for 2013 – a 16 percent year-on-year jump – and a net loss of $182 million (€133 million). That compares to a $264 million (€193 million) loss a year earlier.

Sky Deutschland did, however, achieve one major milestone: its first-ever operating (EBITDA) profit, of $47.5 million (€34.7 million) against an EBITDA loss of $65 million (€47.5 million) in 2012.

Fox has taken a long-term view of Sky Deutschland, focusing on slowing building Germany’s pay-TV audience even if it means swallowing hundreds of millions in losses. Sky Deutschland had some 3.67 million subscribers at then end of 2013, securing its position as the leading pay-TV operator in Germany. But that pales beside the more than 4.7 million subscribers for Sky Italia or the some 10.5 million that subscribe to BSkyB in the U.K., both smaller television markets than Germany.

Fox is the majority shareholder in both Sky Deutschland and Sky Italia and is the largest single shareholder in BSkyB with a 39 percent stake.

Fox hasn’t been tight with its checkbook when it comes to Sky Deutschland. The group recently extended its rights deal with European soccer body UEFA for top soccer tournament the Champions League through 2018 and is a year into a $2.5 billion, 5-year deal with the German Soccer League to carry Germany’s top flight Bundesliga soccer across all pay-TV, web and mobile platforms through 2017.

Sky last year also signed a $78.4 million (€57.5 million) deal with Constantin Sport Holding to take full control of TV sports production company Plazamedia as well as a 25.1 percent stake in both sports TV channel Sport 1 and Constantin Sport Marketing.

The company has also made its first-ever move into original series production, giving the green light, together with Sky Italia and BSkyB, to a live-action adaptation of hit Italian comicbook Diabolik. It will be the first-ever co-production between the three European pay-TV companies.

For the full year 2014, Sky is forecasting subscriber growth of between 400,000-450,000 and a full-year operating profit (EBITDA) of between $96 million – $123 million (€70 million – €90 million).