[Media Boy UK]

Virgin dispute hits BSkyB profits

BSkyB boosted pay-TV customers over the past three months, but a continuing row with cable network provider Virgin Media dented profits.

Sky added 83,000 net new customers in the quarter with churn - a measure of subscriptions cancelled - falling to its lowest level in more than a year.

But the firm's pre-tax profit fell to £121m, down from £166m a year earlier.

Virgin's refusal to screen certain key Sky channels because of a row over transmission costs was partly to blame.
Virgin launched a High Court action against BSkyB in April, accusing the broadcaster of abusing its dominant position in the pay-TV market.

According to an agreed timetable, the case is unlikely to be heard before next summer.

The firm estimated that its operating profit would be hurt by about £15m for each full quarter that the channels, including Sky One, Sky News and Sky Sports News, remained unavailable to Virgin Media's 3.3 million subscribers.

"We expect that performance for the full year will be in line with our plans," said James Murdoch, BSkyB chief executive.

But Richard Hunter, equity strategist at Hargreaves Lansdown, said the run on Sky's shares "centred around some slight disappointment on the profit numbers".

This, he noted, came on top of continuing uncertainty surrounding the firm's contentious 17.9% stake in rival broadcaster ITV and the distraction of the Virgin Media lawsuit.

Full story here http://news.bbc.co.uk/1/hi/business/7074431.stm

Info from BBC News online.