Sky chief ex­ec­u­tive re­ceives £12m pay­out de­spite a 6% fall in prof­its

Jeremy Dar­roch sees to­tal salary quadru­ple to £16m Broad­caster’s op­er­at­ing prof­its de­cline to £1.47bn

The Guardian - - FINANCIAL - Mark Sweney

Sky’s chief ex­ec­u­tive, Jeremy Dar­roch, was paid more than £16m in the year to the end of June as the broad­caster’s UK and Ire­land busi­ness re­ported a hefty fall in an­nual prof­its.

Dar­roch’s to­tal re­mu­ner­a­tion al­most quadru­pled year on year, from £4.6m in 2016 to £16.3m, thanks to a pay­out of nearly £12m un­der Sky’s long-term in­cen­tive plan. Dar­roch’s pay was a more mod­est £4.7m in 2015 as the scheme vests every two years. He also re­ceived a bonus of £1.9m, 186% of a po­ten­tial 200% of his £1.04m an­nual salary.

The pay­outs came as Sky’s to­tal op­er­at­ing prof­its fell 6% to £1.47bn for the year. The UK prof­its, which ac­counted for £1.3bn of the to­tal prof­its, were down 14%.

Sky called it an ex­cel­lent per­for­mance given a one-off rise in the cost of its Pre­mier League rights deal of £629m and £51m spent get­ting its mo­bile ser­vice up and run­ning. Rev­enues across the group, which in­cludes op­er­a­tions in Ger­many, Italy and Aus­tria, rose 10% to £12.9bn.

The £12m that Dar­roch re­ceived from Sky’s long-term in­cen­tive plan re­lated to the per­for­mance of the busi­ness in the three years to June 2016 and not the fall in prof­its in the most re­cent fi­nan­cial year.

Dar­roch cashed in £11.5m in shares in July, and An­drew Grif­fith, Sky’s fi­nance chief, sold £6.8m in shares.

Sky also said that it had paid £16m to ad­vis­ers in the year to the end of March in re­la­tion to 21st Cen­tury Fox’s bid for the 61% of the com­pany it does not own.

The cul­ture sec­re­tary, Karen Bradley, said on Tues­day that she was set to re­fer the deal to the com­pe­ti­tion reg­u­la­tor for a six-month in­ves­ti­ga­tion on me­dia plu­ral­ity and broad­cast­ing stan­dards grounds.

This means Sky share­hold­ers can look for­ward to a £172m spe­cial div­i­dend, which the com­pany said it would pay out if the deal did not com­plete this year.

The de­lay means Sky in­vestors will now also re­ceive a fur­ther in­terim div­i­dend of up to £224m, usu­ally paid out at the end of March. Fox has promised a £200m break fee if the deal fails to be sealed.

Wil­ton Fry, an an­a­lyst at RBC Europe, said in­vestors be­lieved there was still an 85% chance that the Com­pe­ti­tion Mar­kets Author­ity would clear the deal. RBC pre­dicts Fox will get the deal through by of­fer­ing to sep­a­rate Sky News to ad­dress the me­dia plu­ral­ity con­cerns.

“The is­sue of broad­cast­ing stan­dards is harder to gauge,” said Fry. “We be­lieve the is­sues raised – such as po­ten­tial un­due in­flu­ence, cor­po­rate gov­er­nance, etc – should all be able to be re­solved via ei­ther be­havioural and/or struc­tural reme­dies.

“The real ques­tion in our mind is where is the point of pain at which point Fox would not be will­ing to ac­cept the reme­dies? Very tough reme­dies could in­clude, for ex­am­ple, a pro­hi­bi­tion on James Mur­doch’s ex­ec­u­tive pow­ers, given his prior re­la­tion­ship with News Corp at the time of the phone hack­ing scan­dal.”

£11.5m Ju­lia Stiles, top, ap­pears in Sky’s re­cent big bud­get mini-se­ries Riviera. Above, the value of shares, above, that the com­pany’s chief ex­ec­u­tive, Jeremy Dar­roch, right, sold in July

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