Uproar as Sky fees jump 12%

by Graham Ridout

Licensees have reacted angrily to the news that Sky subscription rates are to rise 12% more than four times the rate of inflation.

The new charges will take effect from 1 September and are based on the new rateable values that were introduced in April.

Pubs were being told of the new charges as the Morning Advertiser went to press. But licensees were already phoning the MA to register their disapproval of the news, which follows last year's 18% hike in rates.

Sky estimates that 60% of existing subscribers will remain in either the same rateable band or be put in a lower band after the review of rateable values.

For example, a pub that saw its rateable value rise from £25,500 in the 2000 review to £33,000 under the 2005 assessment will remain in the same band J. The pub's Sky subscription rate will increase from the current figure of £570 per month to £640 from September. Pubs that have been reclassified in a lower band will have their subscription charges cut.

Sky plans to soften the blow for hosts whose pubs have moved several bands by shielding them from the full increase over a two-year period.

Under its 'transitional relief scheme, a pub that, for example, has gone from band D to G will pay a subscription based on going up one band, to E, from this September. In September 2006, the rate will be based on band F before going up to band G in September 2007.

Sky is also reconfiguring the rates for PremPlus. Instead of just four rates, PremPlus will be banded from A to W to match the categories for rateable values. Licensees will be able to pay in eight instalments.

Sky justified the increases by quoting research that shows more than one million people watched key matches on PremPlus last season and the average spend per customer was £15.50.

The research also revealed that 5.4 million people watch live sport in a pub each week up one million over the past year. Of those surveyed, 65% said they deliberately choose a pub with PremPlus to watch sport.

Bolton host Douglas Stoneley-Hulme hit out at the 'hefty 12% increase. Subscription charges for his Antelope pub have risen from £330 to £370 per month. 'It's not as bad as the last rise of 20%. But if I increased my prices at the bar by 12%, I wouldn't have any customers.

Robert Linnell of the Exeter Arms in Rutland called his rise 'astronomical.

He said his rateable value had increased from £2,200 to £2,800, and his Sky charges went up from £200 to £300 a month.

'To go up by £100 just doesn't seem fair, Linnell added.