HBO & Sky in $250 Million Drama Pact

HBO and Sky have announced a $250 million multi-year co-production agreement

"We continue to perform well, attracting another 106,000 customers across the group in the quarter, taking growth to 769,000 over the last 12 months", Darroch added. The company announced on Thursday that operating profit fell 11% to $1.3B, which Darroch put down to the rise in Premier League soccer costs (which were at $633.7M) coupled with the company's investment in Sky Q and the launch of Sky Mobile.

The aim of the deal is to make "high-end drama", putting out two drama series every year, and the first projects are already underway.

For the nine months ended 31 March 2017, the Sky Group posted revenues of £9.6 billion, up 11% annually on a reported basis and up 5% at constant currency.

Germany & Austria delivered a strong quarter, with revenue up 10%, helping Sky deliver its first ever operating profit at the nine month stage from those regions. Advertising revenue was 4% higher than in the corresponding period past year, despite a tougher market environment in the United Kingdom and Italy in particular.

"With Sky set to be acquired by 21st Century Fox, today's results are a bit of a side show, though perhaps that's a good thing because the numbers represent a little bit a wobble", said Laith Khalaf, senior analyst at stockbroker Hargreaves Lansdown. However, it said it had continued to outperform the market, with its advertising revenue down only 3% in the year to date.

Richard Plepler, HBO's Chairman and CEO of HBO said: "Sky has been a great partner for us and this deal allows even deeper collaboration between our two great companies, which have long tradition in creating superior content for our customers". Going into production later this year, users will be able to virtually visit the Natural History Museum, with Sir David Attenborough as their guide.

Sky is now in the throes of a deal that would see it entirely part of 21st Century Fox, which in 2014 made an opportunistic attempt to buy HBO parent Time Warner in a deal worth more than US$80 billion.

The deal already has the green light from European Union regulators, but Ofcom and the Competition & Markets Authority have until 16 May to investigate.