Companies strike £195m drama deal.
Sky has struck a £195m drama co-pro deal with US network HBO as the pay-TV platform profits slipped by 11% over the last nine months.
The UK business expects to order two big-budget dramas per year in association with the Game Of Thrones broadcaster. The first series is expected to air in 2018.
The companies have a number of projects in development and will reveal full details in the coming weeks.
It is also reaching out to indies in the UK, US and Europe to pitch projects, which will be greenlit by a “panel” of executives from Sky and HBO.
The deal is an extension of the agreement that Sky’s UK division struck with the Time Warner-owned broadcaster in 2014 – expanding into a Europe-wide agreement.
The 2014 deal included a five-year extension to the Sky / HBO output deal that ensured Sky Atlantic remained the UK home for first-run HBO series until 2020.
HBO chief executive and chairman Richard Plepler said that the latest agreement would result in “deeper collaboration” as the businesses “raise the bar even higher in pay-TV programming”.
The agreement was unveiled as part of Sky’s financial results in the nine months to the end of March.
Revenues for the broadcaster, which has operations in Italy and Germany, rose by 5% year-on-year to £9.6bn. However, a “significant” hike in Premier League costs to £494m meant that operating profit fell by 11% to £1bn.
In the UK, revenues increased by 4% to £6.4bn, driven by total customer growth of 338,000 across broadband, telephone and TV over the last twelve months.
It claimed that although its advertising revenue was down by 3% over the period, it outperformed the industry-wide, 4% decline.
The company also noted that its next generation set-top box Sky Q was now in 1m homes, up from 600,000 at the end of 2016.
“It’s been another strong quarter for Sky, despite this being our seasonally quietest period,” said Sky chief executive Jeremy Darroch.
“Looking forward, 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. ”