ALMR: Pubs 'footing the bill' for BSkyB's growth ambitions

UK pubs and bars are "footing the bill" for Sky TV's ambitions to build itself into a larger, more profitable business, according to a leading pub trade body.

The Association of Licensed Multiple Retailers (ALMR) said Sky Sports was a "fantastic product, and people love watching big games in the pub, but increasingly the maths just doesn't work."

Kate Nicholls, the ALMR's head of communications said: "Sky's chief executive [Jeremy Darroch] today said he wants to build a larger, more profitable business for the long term.

"Our figures show very clearly that it is pubs and bars who will be footing the bill to help realise that ambition."

BSkyB today revealed that its turnover for the year to June 30, 2010, rose 10.3 per cent to £5.9bn, with operating profits up 35 per cent to £855m, while pre-tax profits grew 157 per cent to £1.2bn.

The broadcaster said it had added 90,000 new domestic subscribers to its services during the fourth quarter of its financial year, with total subscribers now numbering just shy of 9.9 million.

Sky recently introduced a revised schedule for its subscriptions to pubs which saw some outlets' bills reduced, yet many licensees feel they are being charged too much for the service.

The ALMR said a survey of its members following Sky's announcement regarding its new subscription rates for commercial customers found that 94 per cent of outlets faced an increase in the cost of their service.

The trade body said its survey found the average rise was 21.5 per cent, with some venues facing hikes in excess of 30 per cent.

Only four per cent of pubs saw their subscription fall, on average buy eight per cent.

A third of those polled by the ALMR had already cancelled their subscriptions, while another third were considering doing so.

The ALMR added that its survey found the cost of a subscription would rise to more than £15,000 for the first time.

A pub "would have to sell 25,000 extra pints over the course of a season just to cover this cost", it said.

"Alternatively, a typical local would have to more than double its usual takings over the bar on all 92 Sky Premiership match days just to break even on Sky Sports."

Nicholls said: "We already know that a quarter of pubs have let their Sky subscription lapse over the past five years. These latest figures suggest more will follow.

"The net effect will be that fans will be disappointed and the unique atmosphere and excitement of watching a big game in the pub will be endangered."

A spokesperson from Sky, which disputes the ALMR's figures, said that pubs and clubs made a commercial decision to invest in live sport "because it brings in customers and generates revenue".

"It's encouraging that pubs are basing their decision to have Sky on a sound commercial analysis of what live sport can do for their business. The facts are that more and more people are coming to their locals to watch sport. And when they do, they spend money, which is good for business.

"The reason we can help customers grow their business is because of the investment we make each year to offer an exceptional product.

"We have held our prices for the last two years, but we live in a commercial world and Sky is unable to freeze its prices indefinitely. The 9-11 per cent increase reflects the fact that we have increased investment on screen, leading to a stronger product than ever."

Sky charged prices "we believe are both fair and economically viable for customers" the spokesperson said.

"This year we'll offer more than 40,000 hours of top-quality sport on the screen, including 138 live Premier League matches and up to 15 matches every week during the UEFA Champions League.

"This is in addition to the Football League, SPL, international football, Premiership, European and international rugby, the Ashes and the Ryder Cup. In total, they'll be more than 550 live football matches alone."

Sky has meanwhile announced it plans to broadcast parts of the forthcoming Ryder Cup golf tournament in 3D as well a number of Premiership fixtures including Chelsea versus Manchester United on August 8 at 3pm.