Sky faces up to life without Murdoch

John Fellet says there has not been a plateau in new subscribers. Photo / Natalie Slade
John Fellet says there has not been a plateau in new subscribers. Photo / Natalie Slade

Sky Television chief executive John Fellet says it is business as usual after Rupert Murdoch's News Corp sold its 43 per cent controlling stake.

Fellet returned from Sydney following a watershed week for the NZX-listed company after the cornerstone shareholding dissolved into what is a now a more broadly held share register.

He says three insurance companies have registered shareholdings of 6 per cent, including the state owned ACC.

Peter Macourt has left News Corp and with stay on as an independent chairman, while the other News Corp representative, Michael Miller, has stepped down.

Fellet insists News Corp has always been hands off and not interested in operational issues.

News Corp has always had a hands-on role in the operational side of Foxtel - the dominant pay TV player in Australia, which is owned by it and Telstra. But Fellet said Foxtel and Sky were treated very differently.

Sky had never been under pressure to pick up content from Murdoch's programming interests.

"We were late picking up Fox News because they were more expensive than BBC of CNN," he said. "No one ever played the News Corp card, or told me to take it. In the end we took it at the lower price we wanted."

NZ's Todd Corporation exited its long-time investment in Sky in November.

The combined sell-down of Murdoch' s 43 per cent and Todd's 11 per cent have made for a big change in the listing.

The half year result to December 31 posted net profit up 7.5 per cent to $67.4 million and showed emphasis on increasing the amount spent by subscribers rather than increasing subscribers overall.

Business analysts have been upbeat on Sky's future, partly due to its dominance of the pay television sector and because of confidence that it will not face regulation elsewhere.

One industry insider said that a Commerce Commission investigation of Sky's relationships when wholesaling its programming to internet service providers may have influenced the sell-off of both parties.

As one well placed source said: "As its subscribers have started to plateau, Sky is moving from a growth stock to a utility with solid returns."

Fellet said yesterday the company was not hitting a plateau in new subscribers.

In a recession it was harder to bring on new subscribers and he thought the next quarter would be the same.

However, while it was harder to get new subscribers, existing customers stayed home a little more and bought Rialto or high definition services.

Around 30 per cent of Sky's subscribers had the basic package and so were open to premium services, he said.

Sky shares closed up/down 1c yesterday at $5.19.

- NZ Herald

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