Sky has reported a £750m loss after the Qatar World Cup pushed up broadcasting costs and the company wrote down more than £1bn on its operations in Italy and Germany.
The British broadcaster, which is owned by the US telecoms and media giant Comcast, doubled its operating losses as it shifts from its traditional satellite model to broadcasting channels over internet streaming.
Accounts for 2023 filed at Companies House showed revenues slightly up at £10.2bn, partly because of higher prices for its TV, broadband and mobile services, which offset declines in areas such as advertising and revenues from its Sky Q satellite box.
However, the company’s costs also rose in the year, partly because of the timing of the Fifa World Cup at the end of 2022.
The winter tournament meant more Premier League games – Sky’s key draw to football fans – were played in 2023. As a result, more of the cost paid to the Premier League to broadcast them fell in that year.
The fees the company pays to broadband and mobile companies to use their networks also rose slightly. As a result, Sky’s operating losses doubled from £111m in 2022 to £224m last year.
The company’s pre-tax losses climbed from £563m to £773m, due to a £1.2bn writedown on subsidiaries including its German and Italian businesses.
It said the impairment was partly the result of “adverse macroeconomic conditions resulting in reduced estimated future cash flows”.
Sky has continued to bet heavily on Premier League football as a way to protect its subscription business against a bevy of US streaming giants such as Netflix, Amazon and Disney.
Last year, it paid more than £5bn to acquire four out of five available packages of Premier League games, which will see it broadcast a record number of matches – at least 215 a season – from next year.
At the same time, the company’s entertainment business faces a crucial moment as its deal to screen shows from the US broadcaster HBO expires next year.
The agreement, which was last extended in 2019, gives Sky the rights to shows such as Game of Thrones and Succession.
HBO relaunched its streaming service in the US last year and has expanded it to Europe, and could choose to launch directly in the UK instead of partnering with Sky.
Sky has been ramping up its investment in its own original programming to safeguard itself in case the HBO deal does end.
Productions include comedy Brassic starring Michelle Keegun, which has since been syndicated to Netflix, and the recently released serial killer drama Sweetpea.
Comcast paid $39bn (£30bn) for Sky, which was previously listed on the London Stock Exchange, in 2018, beating 21st Century Fox, now owned by Disney, in an auction.
Comcast subsequently wrote down the value of the business by $8.6bn in 2022.