Sky Network forecasts revenue drop after investments

Operating earnings are expected to be down at least 21 percent to between $170m and $190m from the previous year's $241m. - Photo: no caption

Pay TV operator Sky Television expects its revenue and earnings to fall after investing in new content, new services and sponsorship deals.

In a trading update, the company has forecast revenue to drop at least 3 percent this financial year, at between $750 million and $770m from last year's $795m.

Operating earnings are expected to be down at least 21 percent to between $170m and $190m from the previous year's $241m.

"As we signalled at our recent annual general meeting and in various reports to the market, the ways that customers want to view content are changing," Sky said.

"We are focused on delivering our great content to every New Zealander in ways that work for them."

Accounting changes would also affect its financial result.

In recent months, Sky has renewed the rights to broadcast the SANZAAR rugby competition, launched a new sport streaming service, and revamped its sports channels, as well a renewing content deals at higher prices.

It also bought a Dublin-based broadcaster RugbyPass for US$40m, bought the naming rights for Wellington's stadium, and said it planned to sponsor more sporting codes, including more women's teams.

Sky posted a net loss of $607.8 million in the year to June, after significant write-offs in the value of some assets and scrapping a technology project.

It would release its first half financial result in February and update shareholders on its transformation strategy.

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