Sky charges need revision
The poet Thomas Stearns Eliot once described April as the cruellest month 'mixing memory with desire. If he had decided to open a pub rather than write angst-ridden poetry he might well have revised his choice of ball-breaking month. In the pub industry, it's July each year that sees anguish mixed with a kind of numb disbelief as Sky unveils its latest inflation- busting price increases.
A few weeks ago, pub operators, including Derek Andrew of Wolves & Dudley's Pathfinder division, called on Sky to show restraint in the latest round of price increases. Instead, licensees are faced with an average 12% increase four-times inflation rising to near 30% in some cases.
The Spirit estate will respond by chopping out Sky in 10% of its pubs. The obvious conclusion to be drawn for the wider industry is that Sky has become unaffordable for one-in-10 pubs after the latest increase. For many pubs, forking out for a Sky subscription is akin to playing high-stakes poker. It is really difficult for licensees (and managed pubcos) to assess the exact economic benefit obtained through a Sky subscription. Licensees want to please their football teams and soccer-mad customers by showing high-quality Premiership football. Some games see a really good turnout. Lots of others are pretty much damp squibs. It's often an act of faith, an investment in the future to sign up for Sky with many licensees turning a blind eye to the actual profit and loss involved. Each price increase forces some hosts to take a long-postponed look at the poker-like economic realities of a Sky subscription. For many each year, the high stakes involved become a little too rich and it becomes time to fold.
The current banding system based on rateable values was laudably introduced to gear Sky subscriptions to pub size. The time has now come when the least Sky owes the industry is an attempt to fine-tune its charging system. For many pubs, rateable-banding value bears little relation to actual viewing area. It can't be beyond the wit of man to find a fairer charging formula than the imprecise and somewhat lumpen banding system currently in use. Over to you, Sky.
