Sky News Limited

Grant Way
Isleworth, TW7 5QD
England
Telephone: (+44 20) 7705 5500
Web site: https://news.sky.com

Wholly Owned Subsidiary of Sky plc
Founded:
1989
Employees: 500 (est.)
Sales: $860 million (2017 est.)
NAICS: 515120 Television Broadcasting

Headquartered in Isleworth, England, Sky News Limited operates a 24-hour news channel available in the United Kingdom by broadcast, cable, and satellite transmission. Sky News also delivers local, regional, national, and international news, business news, sports, weather, and travel information online and via streaming and mobile devices. In addition, its radio arm, Sky News Radio, provides content to nearly every commercial radio station in the United Kingdom and their associated websites. The Sky News International feed is available in 127 countries around the world on cable and satellite systems and streaming devices. Besides generating income from advertising and cable sales, the Sky News Library Sales division licenses Sky News footage from its extensive and ever-expanding archives.

COMPANY ORIGINS

The inspiration for Sky News was the United States' pioneering Cable News Network (CNN), a 24-hour cable news channel that had been launched in 1980. The Australian-born newspaper mogul Rupert Murdoch, founder and CEO of News Corporation, announced in June 1988 that he planned to launch the Sky Television network, which would consist of four new satellite television channels in the United Kingdom: Sky Channel, Sky Movies, Eurosports, and Sky News, a 24-hour news channel modeled after CNN.

At 6 p.m. on February 5, 1989, Sky News went on the air for the first time. The Sky News studio was a working newsroom, creating the impression of immediacy as the news was delivered. In addition, a good portion of Sky News' programming was produced by Visnews, a U.K.-based news service that was jointly owned by Reuters, the British Broadcasting Corporation (BBC), and the U.S.-based television network NBC. (Visnews would be renamed Reuters Television after Reuters bought out its partners in 1992.) The channel adopted the motto “We're there when you need us” and generally found favor with U.K. viewers. It was voted best new media product of 1989 by the business magazine Management Today.

Meanwhile, a rival U.K. satellite provider, British Satellite Broadcasting (BSB), had formed in 1986. It had won the official U.K. satellite TV license, but its launch was delayed. By the time it went on the air in March 1990, BSB had spent more than $550 million on securing rights to television programs and films, as well as on marketing.

Murdoch had similarly racked up costs to launch Sky Television. In November 1990 the two rivals surprised the U.K. television industry when they merged to form British Sky Broadcasting (BSkyB).

COMPANY PERSPECTIVES

Sky News—First for Breaking News. International. Impartial.

COMPETITION FROM THE BBC

Sky News was essentially a break-even business. However, it was deemed a crucial element in BSkyB's brand image. Moreover, it curried favor with politicians by providing them with a forum to reach the public.

Within a few years Sky News faced new competition from the BBC, which had developed its own 24-hour news service, News 24. BSkyB attempted to prevent the November 1997 launch by issuing a complaint to the government, arguing that the venture would be an inappropriate use of the license-fee money the BBC received from the U.K. public. Because the BBC was offering its service free to cable companies, Sky News faced the possibility of being dropped by cable systems in favor of News 24. BSkyB's entreaties fell on deaf ears, and News 24 reached the air in November 1997. BSkyB also appealed to the European Commission, claiming that the publicly funded News 24 was unfair and illegal under European Union law. In September 1999 the European Commission ruled against BSkyB's complaint.

Meanwhile, in 1996 Murdoch's News Corporation had launched a 24-hour news channel in the United States, Fox News, that adopted a right-wing political stance. Sky News, in contrast, maintained a strictly neutral tone, one that appealed to U.K. viewers and elevated the reputation of Sky News, which also received industry recognition for the quality of its reporting.

As the new century began, Sky News unveiled a new service. Called Sky News Active, it was a 24-hour, on-demand service that provided headlines, weather, and other information. By then the internet was providing competition in news delivery, but Sky News also had to contend with a direct competitor in the form of the ITN News Channel, a 50-50 joint venture between Independent Television News Limited (ITN) and British cable television operator NTL Incorporated.

ITN was hardly a newcomer to the market. It had been established in 1955 to provide news coverage for the United Kingdom's first commercial television stations, thus bringing an end to the BBC's monopoly over the new medium. ITN gained wider visibility in the 1990s when its coverage of the First Gulf War was carried by television stations around the world. Later in the decade, it launched 5 News for Britain's newly created independent Channel 5 and developed a news crawl service and weekend newscast for Channel 4.

NEW HEADQUARTERS, NEW PROGRAMS

The 24-hour ITN News Channel reached the air in August 2000 and became available to cable, satellite, and digital terrestrial carriers. Although its coverage garnered praise, the channel was not commercially successful and did not have the luxury of a parent company to subsidize losses. ITN sold its interest in 2002 but continued to produce the channel, which was rebranded as the ITV News Channel. Unable to compete with BBC News 24 and Sky News, however, the ITV News Channel shut down in 2005.

Sky News bested ITN on another front during this period. In 2004 it wrested away the Channel 5 contract, signing a five-year agreement to provide news bulletins starting in January 2005. The deal did not make an appreciable difference to Sky News' bottom line. In February 2005 the head of Sky News, Nick Pollard, speaking at a Broadcasting Press Guild lunch in London (as reported by Steve Clarke in a February 2005 Daily Variety article), said the channel “is not making money … and I don't know if it will ever.” Clarke wrote, “Pollard does not think Murdoch will close Sky News, because of its reputation among British politicians and opinion formers. It is an open secret that in the early 1990s when BSkyB was losing so much money that it was jeopardizing News Corp., Murdoch refused to axe Sky News and save $55 million a year.”

Murdoch's commitment to Sky News was demonstrated later in 2005, when Sky News moved into new headquarters in London. It included a 7,500-square-foot newsroom, about twice as large as the previous facility. The new studio played a major role in the relaunch of Sky News as it fought to retain its place in the United Kingdom's highly competitive news sector. Observers feared Sky News would become more conservative, like Murdoch's notoriously right-wing Fox News in the United States. However, thanks to the influence of Murdoch's son, James Murdoch, Sky News continued to provide neutral, unbiased news coverage.

KEY DATES
1989:
Sky News begins broadcasting.
1997:
Sky unsuccessfully attempts to prevent the BBC's launch of its own 24-hour news channel.
2004:
Sky News wins a five-year contract to provide news bulletins to Channel 5.
2010:
Sky News launches a high-definition news channel.
2018:
21st Century Fox and Comcast Corporation engage in a bidding war for Sky News' parent company, Sky plc.

UNCHANGED EDITORIAL STANCE

With Pollard's departure, the reins of Sky News were handed to John Ryley, a veteran of news broadcasting whose previous stops included the BBC. On occasion Rupert Murdoch continued to express a desire to make Sky News more like Fox News and provide what he considered a proper alternative to the BBC, which he viewed as too liberal in orientation. He also admitted that his son James would not allow it.

Throughout its changes in editorial leadership, Sky News maintained a consistent editorial stance. Not to be discounted in the decision to stay the course were Britain's impartiality rules that would make it difficult to license a service modeled after Fox News. In a January 14, 2010, article, Daily Variety's Clarke reported that Ryley said he admired Fox News. However, he continued, “At Sky News, we provide impartial and independent news. That's not because Ofcom (the media regulator) tells us to but because it's what our audience expects of us. In simple terms, it's good business for us to be impartial.”

In January 2009 Sky News covered U.S. president Barack Obama's inauguration in high definition (HD) on its satellite and online streaming platforms. The success of the broadcast and growing viewer demand for HD content led Sky News to close its main studio in March 2010 for an upgrade. Newscasts originated in Studio B until May 6, 2010, when Studio A reopened and Sky News launched a permanent HD news channel. Sky News thus became the first United Kingdom news channel to broadcast in HD. The work on Studio A was completed in time to cover the 2010 general election results.

In 2010 News Corporation began making plans to acquire the 61 percent of BSkyB it did not already own. To receive regulatory approval, in 2011 it agreed to spin off Sky News as an independent operation. The spin-off was meant to assuage concerns that Rupert Murdoch would have too much control over the news in the United Kingdom, where he already owned several major newspapers. The BSkyB acquisition and Sky News spinoff were scotched, however, because of a phone-hacking and police-bribery scandal involving Sky News and the Murdoch-owned tabloid newspaper News of the World. With permission from a manager, one of Sky News' reporters had intercepted the emails of members of the public on two occasions. One case involved a man who faked his death as part of an insurance fraud scheme, and the other concerned a suspected pedophile and his wife.

BIDDING WAR FOR CONTROL OF SKY

In 2013 News Corporation split into two publicly traded companies; News Corp encompassed its publishing operations, and 21st Century Fox consisted of its broadcast media operations, including BSkyB. Another change occurred in 2014, when BSkyB acquired sister companies Sky Italia and Sky Deutschland and was subsequently renamed Sky plc. The following year Sky News launched a rebranding effort with new graphics and a new opening voiceover. In 2016 Sky News began broadcasting from a new studio in Sky Central, Sky's new headquarters in Isleworth, a town in west London. Changes were also made to the program schedule.

In January 2017, 21st Century Fox announced that it would acquire the 61 percent of Sky plc it did not already own, in a transaction valued at nearly $15 billion, about $3 billion more than the 2010 price. Although the deal was quickly approved by the European Union's competition authorities, U.K. regulators had not forgotten the hacking scandals and exacted concessions from 21st Century Fox. In June 2018 U.K. regulators finally agreed to approve the deal, provided Sky News was sold to an appropriate buyer and Fox underwrote funding for Sky News to the tune of at least £100 million a year for at least 15 years. At the time, Sky News was losing between £15 million and £20 million a year. Although Sky News would be owned by another party, Fox would still have to make up for any shortfall in revenues to maintain Sky News' budget at the designated level.

The Walt Disney Company had already offered to buy Sky News but also made a $71.3 billion bid to acquire other Fox assets. A wild card was Comcast Corporation, which made offers for both Fox and Sky. On July 11, 2018, Fox increased its offer for Sky plc to $33 billion, but hours later Comcast raised its own bid to $34 billion. As of August 2018 it remained to be seen whether Fox would top Comcast's bid. Should Fox win the bidding war for Sky plc, Sky News would be spun off, possibly sold to Disney. In any event, the mandatory funding from Fox would ensure Sky News' existence well beyond 2030.

Ed Dinger

PRINCIPAL DIVISIONS

Sky Data; Sky News International; Sky News Library Sales.

PRINCIPAL COMPETITORS

BBC News Limited; Cable News Network, Inc.; Euronews.

FURTHER READING

Clarke, Steve. “ITV Nixes News Net: Struggling Channel to Shutter in 2006.” Daily Variety, December 15, 2005, 18.

———. “Pollard Looks Hard at Sky.” Daily Variety, February 24, 2005, 14.

———. “Sky Chief Defends Fox.” Daily Variety, January 14, 2010, 12.

De la Merced, Michael J., and Edmund Lee. “Comcast and Fox Engage in Bidding War for Control of Sky.” New York Times, July 11, 2018.

Evans, Richard. “The £199 Dish That Will Launch a Television Revolution: Sky Channel.” Times (London), June 9, 1988.

“Licensed to Kill: 24-Hour News.” Economist, October 4, 1997.

“Monopoly Games; Fox's Bid for Sky.” Economist, July 8, 2017.

Sweney, Mark. “Murdoch ‘Must Increase Sky News Budget to £100m.’” Guardian (London), June 19, 2018.