Sky points to Premier League costs as operating profit down 11% to £1.01bn

Sky has said rising costs from screening Premier League football and a "weaker UK advertising market" has dragged on its profits.

The broadcaster saw an 11% drop in operating profit to £1.01 billion in the nine months to March 31 as it pointed to a £494 million bill linked to Premier League costs.

On a statutory basis, operating profit fell from £802 million to £703 million.

Boss Jeremy Darroch said: "We enter the final quarter of our fiscal year in good shape. Despite the broader consumer environment remaining uncertain, we continue to deliver on our strategy and are on track for the full year."

Revenue rose by 5% to £9.6 billion during the period, with more than 100,000 new customers joining Sky in the third quarter.

Sky also announced a 250 million US dollar partnership with American production company HBO.

The partnership will bring together the Game Of Thrones broadcaster and producer, and aims to bring more "world-class drama series" to customers.

Sky is the subject of a £11.7 billion takeover bid from Rupert Murdoch’s 21st Century Fox.

Fox is aiming to seize control of the 61% of Sky it does not already own and the bid comes five years after Mr Murdoch’s last tilt at taking the business over through News Corporation.

The deal has the green light from EU regulators, but Ofcom and the CMA have until May 16 to investigate the deal.

Ofcom is charged with determining whether Fox would be a "fit and proper" owner of Sky.

News from the US that controversial Fox News host Bill O’Reilly has been dropped by the network - following allegations of sexual harassment - could have implications for the Sky deal being rubber-stamped in the UK.

Campaign group Avaaz said that it is "not safe" for the Murdochs to be given more control of the media in light of the O’Reilly scandal.

Alaphia Zoyab, senior campaigner at the group, said: "It’s not safe for the UK government to let them control even more of our media.

"We want to ensure that Ofcom is under no illusion that removing Bill O’Reilly addresses the massive misgovernance issues at Fox News."

It has been reported that 21st Century Fox has paid out over £10 million to settle allegations relating to inappropriate behaviour and sexual harassment.

Avaaz, which has made several submissions to Ofcom, also pointed to the phone-hacking scandal involving News International - which effectively derailed Mr Murdoch’s previous bid for full control of Sky - as another example of why the deal should not be approved.

Investors have also raised concerns about the involvement of Mr Murdoch’s son - James Murdoch - who is Sky’s chairman and Fox’s chief executive.

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