Market reacts to new Sky originals

Sky’s announcement this week that it would be investing in more than 50 new TV series (up from 24) and including a second series of ratings winner Riviera as well as bringing a slew of high-visibility acting talent (Benedict Cumberbatch, Idris Elba, David Morrissey, Kelly Reilly etc) was well received by the viewing public, but the news did little for its share price on November 22nd which – at best – was flat (at £9.42/£9.43).

Equity analysts at investment bank Exane/BNPP reminded clients that most of the plans had already been well flagged by CEO Jeremy Darroch and MD/Content Gary Davey. Sky had already announced its increased spend on (non-sports) programming across all of its flagship channels, including Sky Arts.

Over 20 of the original series will be returners, says the bank, and new shows will include Gangs of London and Urban Myths.

Sky subscribers to its Ultra-HD service will appreciate the improvement in broadcast quality, as a key benefit.

The bank, in its note to clients, said: “Sky’s ambitious plans for original content has been well flagged (including at Sky’s investor day last year) over recent years. In our view the key share price driver at Sky is the 21C bid which we expect to be approved in March 2018 although i) Corbyn government ii) further scandals at 21C bring risk.”

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