British Sky Broadcasting Group PLC ADRBSY

Morningstar Rating

Stock Research and Analysis

by Allan C. Nichols, CFA

British Sky Broadcasting (BSkyB) has performed admirably in the face of a weak British economy, as the firm has continued to grow its subscriber base recently. We believe this performance demonstrates the high value consumers place on its services despite Read more

Bulls Say

BSkyB has more than twice as many pay television subscribers as Virgin Media, the cable operator in the U.K.

The firm has the best content, especially for sporting events in the U.K., including football, rugby, and cricket.

BSkyB added additional games from the Scottish Premier League starting this year and will add more from the English Premier League starting next year.

The firm is adding new broadband subscribers faster than any other operator in the U.K. Read more

Bears Say

Competition for television content is increasing. At a minimum this will increase the costs BSkyB has to pay for content and potentially could cause it to lose its lock on major sporting events.

Ofcom is cracking down more from a regulatory perspective. It has ruled BSkyB must reduce its ITV stake to below 7.5% and is trying to regulate the prices at which BSkyB resells its content to other operators.

The firm is losing money in its broadband and telephony businesses. These businesses are also much more competitive than the pay television market.

The Murdoch family controls BSkyB, and their objectives may not be in alignment with minority shareholders. Read more

Strategy

BSkyB's strategy is to dominate the U.K. pay television market and to add ancillary services. The firm has more than twice as many pay television subscribers as its nearest competitor and is using its Read more

Management

Rupert Murdoch and his family control BSkyB. The family owns about 40% of the stock and Rupert was CEO until 2003 and chairman until 2007. His son James took over the two positions when Rupert stepped down. When James took over the CEO role, there was Read more

Profile

British Sky Broadcasting is the only satellite television operator and largest pay television provider in the U.K. with 9.4 million subscribers. It has the best content, Read more

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