Coronavirus: Sky shares fall sharply, again, as sport calendar decimated

Sky is trying to accentuate the positive as the sporting calendar is gutted on Covid-19 fears, with Super Rugby and cricket joining codes on hold - and one broadcaster across the Tasman issuing refunds.

LASTEST: Sky hoses down Spark's free sport offer

Investors weren't buying as the NZX opened, however. Sky shares, which were pummelled down 15 per cent on Friday, fell another 22 per cent to a new all-time low of 30.5c today (and 78 per cent down over the past year). The broader market was down 3.6 per cent.

"While it is clearly a fluid situation, there is still sport being played and shown, including strong domestic competitions like the ANZ Premiership netball, trans-Tasman competitions like the NRL and A-League and great local sport on the Sky Sport Next programme," external relations director Chris Major said this morning before the market opened.

"Sky also has a lot of sport-related content that keeps fans engaged beyond games including studio shows, documentaries and strong archive content. But we understand and share the disappointment sports fans are feeling."

A two-sentence update to the NZX this morning said Sky supports government steps to contain Covid-19 and that, "Sky is assessing the immediate implications for Sky Sport in light of the travel restrictions and consequences for some sports events, and expects to be in a position to provide more details later this week." It did not address any implications on existing guidance.

When the pay-TV broadcaster last updated the Herald, on Friday morning, the situation looked serious, but Major noted that "the other major sports that Sky Sport customers watch the most" were still on, including Super Rugby, NRL, ANZ Premiership netball, the Black Caps ODI series against Australia and Supercars – are all scheduled to carry on this weekend".

But the situation deteriorated rapidly, with Supercars cancelled, the Black Caps coming home after their first match and Super Rugby joining the long list of codes whose seasons are on-hold - which includes NBA basketball, NHL hockey and Champions League football. Major tennis and golf is also on hold.

SKY

The Super Rugby development will be especially worrying for Sky, which the Herald understands sunk some $400 million into retaining Sanzaar rights for another five years. Even before the competition was caught up in the Covid-19 scare, its future was looking wobbly as South African teams eye defection to a new European competition being bankrolled by the deep-pocketed CVC Capital.

And wealth manager Jarden has pointedly noted that across the Tasman, Optus is now issuing refunds to customers following English Premier League football being put on hold until at least April 3 - with Brighton's manager saying none of the clubs anticipate it will resume on that date (Sky and Spark have been asked for comment on that front; a Sky insider noted that Sky UK and BT in the UK are not offering refunds over suspended football coverage).

Things could get worse. The Summer Olympics in Tokyo, scheduled to start on July 24, still hangs in the balance.

A number of people told the Herald they had already cancelled their Sky subscriptions. One, who received Sky via Vodafone TV, said "It's just not worth it anymore", with the looming dearth of A-list sports content.

And although it will be further down the track, Sky also faces possible interruption to its entertainment schedule. Overnight, Universal halted production on all of its live-action films, joining a long list of Hollywood studios calling an open-ended halt to shoots.

Sports-streaming rival Spark is faced with the cancellation of the season-opening Melbourne Grand Prix, with other races in doubt. Its other signature content, English Premier League football, is on hold until at least April 3.

However, while Sky staked its future on sport during last year's spend-up, which also included $62m to buy global streaming player RugbyPass, sports is a relatively tiny portion of Spark's $4 billion or so annual revenue.

Spark even managed to earn an upgrade from Jarden amid the market carnage, with the wealth manager saying is recent tumble (in line with the broader market) had brought its valuation in line with performance for the first time in five years.

In its first-half result, Sky reported an increase in total subscribers as its streaming services surged, but a 78 per cent fall in net profit to $11.9m as its spend-up on sports rights weighed.