Letter: Cloud-free Sky

Mr Gary Davey
Friday 07 August 1992 23:02 BST
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Sir: We are writing in response to your article (3 August) regarding City valuations of British Sky Broadcasting. Your article suggests the City's view about Sky is being influenced by disappointing dish sales figures.

The figures you quote in your article are grossly misleading. We cannot understand why eight- month-old information in a rapidly growing business such as ours has any relevance, especially in the context of an article about the valuation of the future of the business.

The three estimates you referred to date back to December 1991 and one relates to a survey commissioned in July 1991. Your article failed to point out that data on dish installations is published on a monthly basis.

The two most reliable independent measurements of satellite dish penetration are now broadly in line, with Continental Research estimating 2.5 million dishes and BARB (the Broadcast Audience Research Board) estimating 2.4 million.

Both organisations have earnt considerable credibility in three years of developing methodologies for measuring satellite installations. Barb, in particular, is the industry body responsible for gathering television's official viewing figures, and, being owned by ITV and the BBC, has no motivation whatsoever to inflate the Sky success story.

We are not in a position to comment on the calculations of City analysts. However, we believe it grossly misleading to quote unnamed 'observers' as suggesting these valuations may be inflated, particularly on the basis of statistics that were not only wrong but also published eight months ago.

The Smith New Court report used as the basis for your article runs to 33 pages of detailed analysis of the satellite television market. To highlight one question about the validity of 1991 data is a distortion of the report's conclusions.

As the report concludes that 'BSkyB will be a great success', we cannot see the justification for the headline to your article referring to a 'cloudy outlook' for our company.

Yours truly,

GARY DAVEY

Deputy Managing Director

British Sky Broadcasting

Isleworth, Middlesex

4 August

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