Sky contributes £5.4bn to the UK economy, says report
Published Jul 6 2012, 11:15 BST | By Andrew Laughlin
© Sky
The report was released as Sky continues to be under the microscope at Ofcom, with the media regulator investigating whether the firm is still "fit and proper" to retain a UK broadcasting licence.
Ofcom's review was prompted by the phone hacking scandal at News International, the publisher owned by Rupert Murdoch's News Corporation, which also owns 39.1% of Sky.
In response, Sky asked Oxford Economics to look at its economic impact in the UK.
The report says that Sky has stimulated economic activity across a wide range of associated companies and industries, concluding: "Sky's footprint is UK-wide and its contribution is felt in almost every part of the country."
Sky is estimated to have contributed £5.4bn to the UK's gross domestic product (GDP) in 2011. It generated £6.4bn in sales, with more than 75% of this revenue said to have been "retained in the UK".
The direct GDP contribution of £2.2bn made by Sky was claimed to be equivalent to 40% of the overall contribution made by the entire TV and radio creative sector in the UK.
For every £1bn raised by Sky directly, a further £1.4bn is said to be generated in the rest of the economy through its purchase of goods and services, along with staff spending.
In 2011, Sky used 4,000 suppliers across the UK, including 645 independent production companies working with Sky Sports and 110 indies in arts and entertainment.
At the end of last year, Sky employed 22,800 people in Britain, including 9,400 in London, 6,430 in Scotland and 1,560 in Yorkshire and Humberside.
Around 2,600 people are employed by Sky in producing and commissioning content, but the firm expects this to grow as it intends to increase its investment in homegrown content to £600m by 2014. Last year, this stood at £450m.
Overall, Sky is estimated to support 118,600 jobs in the UK through its procurement of goods and services, as well as consumer spending out of wage income of its staff.
The company also feels that it has prompted rivals to innovate by ploughing £3.2bn into its digital TV platform, including the introduction of services such as Sky+, high definition and a dedicated 3D TV channel.
In the financial year 2010/2011, Sky directly contributed £941m in tax to the Exchequer, including £337m through corporation tax and business rates.
In total, Sky is estimated to support a £2.3bn tax contribution across its entire operation, equivalent to £36 for every person in Britain.
Jeremy Darroch, Sky's chief executive, said that the company has "grown rapidly" since it was established just over 20 years ago.
"Along the way we have taken risks, invested billions of pounds and been a driving force for innovation and change in our sector," said Darroch.
"As a result we have transformed UK consumers' experience of television and home communications, while generating significant returns for our shareholders and contributing positively to the UK economy as a whole."
Darroch added: "This report from Oxford Economics measures and explains the scale of our economic impact for the first time.
"We hope that Sky's story provides a good example of the important contribution that a successful British company can make, particularly at a time when economic growth is harder to come by.
"As we look ahead, our appetite to invest remains strong and we hope to contribute even more in the future."
> News Corporation confirms that it will split into two companies
> Sky's NOW TV streaming service coming to YouView
What I don't get is all the venom directed at Murdoch, (fair enough) whilst ignoring the actions of certain other media moguls who are every bit as taintd as Murdoch is.
July 7th 2012 at 4:51pm(+1 like)
I have just cancelled my Sky Subscription as my money is needed elsewhere these days. I have always had a positive experience with Sky customer services and was a willing customer who enjoys their offering. However, they do restrict competition and choice by buying up events and series and showing them when they feel like it (Supernatural Season 7 as an example). Other than wanting to save my cash, it doesn't sit well that they are increasing their basic package charges (£1.50 x how many customers?) whilst making huge profits. But, if you can afford it, like it and use it, it's a brilliant service.
July 7th 2012 at 1:55pm
I love my Sky package and never had a problem with Sky it does seem as if the contribute a healthy 30% of their revenue to the UK economy. I am sure there are many "tax efficiencies" within the Sky business, but if they are within the rules, we can only blame HMRC.
Whilst I don't agree with the way Rupert Murdoch conducts his other business affairs, there are thousands of talented people who work for Sky, honestely and innocently who bring customers (must I point out the defintion of Customers, who agree to pay for this service, you are NOT forced) this wonderful service.
Do we look at other huge businesses who make large amounts of money in the UK, but don't employ a 10th of the staff that Sky do, these business take money out of the UK's GDP total and simply that money doesn't get spent in the UK economy.
Dont get me wrong I am no advocate of Sky over any other business, but for all the Murdoch's wrongs, the Sky business is not doing bad.
July 7th 2012 at 12:03pm(+2 likes)
Who says so, oh yes, Sky says so.
Its got to be true then with their directors as honest as the days long.
July 6th 2012 at 3:41pm(+2 likes)
If you read the article properly from a neutral point of view then would of seen that this findings was made by ''Oxford Economics''.
Try reading a article properly before commenting.
July 6th 2012 at 5:18pm(+1 like)
People can't read around here. They read there headline and make a comment. It is so depressing.
July 7th 2012 at 9:12am(+1 like)
"findings was made by ''Oxford Economics''. "
lol, of course they were.
July 7th 2012 at 3:03pm
dijital - They were, clearly you don't know what or who Oxford Economics are. Oxford Economics have done countless report findings like these into many British companies on how they affect the economy. These findings are done by prestigious academics with years of insight and knowledge of the sector they study in, so don't slam something you don't know anything about with ill judge views.
July 8th 2012 at 1:11pm
"generates £2.3bn in tax contributions" = "This is the total of all the income tax paid by our employees, plus the amount of VAT that our customers are charged...but we ain't going to tell you how little the company and it's top executives are actually paying."
July 6th 2012 at 3:40pm(+7 likes)
Needs.More.Likes!!
July 6th 2012 at 5:04pm(+1 like)