How many Sky customers will call it quits now they are having to pay more for the broadcaster’s investment in programmes like Game of Thrones and The Enfield Haunting, as well as the £4.2bn it splashed out for the latest round of Premier League rights?
An early indication could come when the company reveals third-quarter results on Tuesday, with analysts expecting a positive performance despite the price rise of up to 4% announced last month.
Goldman Sachs is forecasting an improved “churn rate” – a measure of customers leaving – of 10.5%, from 10.9% a year ago. Citigroup said: “The key question, especially in the UK, is what proportion of this price increase is anticipated to stick. If a better consumer environment does mean more drop-through [to profits], the impact on consensus earnings per share could be significant.”
Investors will also be keen to hear more about the timing of Sky’s planned mobile launch with Telefónica UK. Jefferies bank said: “BT has launched discounted mobile, a move that surely cannot go unanswered until 2016.”
On top of that there is also renewed talk of a possible bid, this time from French media conglomerate Vivendi. Although the company has denied it, some believe such a move would make sense – and with net cash of €17bn, Vivendi could certainly afford it.
Another Greek drama
Greece’s tortuous odyssey towards a resolution of its financial crisis hits another key stage this week, but probably not the final one.
Yanis Varoufakis, its colourful finance minister, said last week that Greece “went from a Ponzi scheme of unsustainable borrowing before the crisis to a scheme of Ponzi austerity after it”.
The trouble is that its creditors want Greece to stick to its austerity programme, or they will not supply the necessary bailout funding and the country will run out of cash. European teams meet this weekend to hammer out further details of Greece’s proposed reforms, which have so far not proved acceptable, with eurozone finance ministers then meeting in Riga on Friday to discuss the latest offerings.
However, it now seems unlikely there will be a resolution at that gathering, despite the prospect of Greece leaving the eurozone coming ever closer. A Eurogroup meeting on 11 May seems to be the new cut-off point, but before that Greece needs to scrape enough cash together to fulfil its imminent payments, with the International Monetary Fund on Thursday ruling out any postponement of what it is owed. As UBS said, by 11 May, “the situation around Greece might have turned into a real cliffhanger”.
Lone voice of protest at Barclays
Like the latest UK election debate, where Ed Miliband was the only leader from the three main parties to turn up, only one of the major investor bodies is this year protesting against Barclays’s pay policy.
A year ago more than a third of the bank’s investors opposed its remuneration report, which saw bonuses increased despite a 30% fall in profits. This time Barclays seems to be on safer ground, with bonuses to senior staff cut by 22% in 2014 and profits up 12% to £5.5bn (before various provisions and charges).
So corporate governance groups Institutional Shareholder Services and the Investment Association (formerly the Association of British Insurers) seem happy, and a similar rebellion at Thursday’s annual meeting is unlikely.
Even so, Pirc, the other main shareholder group, has taken exception to the pay packet awarded to chief executive Antony Jenkins. He earned £5.5m in total, including a £1.1m bonus, and Pirc said: “The chief executive’s salary is considered to be above the upper quartile of its comparator group.
“The ratio of chief executive pay to average employee pay is also considered excessive. Lastly, the balance of the chief executive’s realised pay with financial performance is not considered acceptable as the change in chief executive total pay over five years is not commensurate with the change in total shareholder returns over the same period.”
