Sky teams up with HBO for $250 million drama deal

Sky inked a $250 million (£195 million) deal with Time Warner’s HBO on Thursday to develop high-quality dramas.

Chief executive Jeremy Darroch says the two broadcasters have “a common creative culture”.

Investors will hope this partnership offsets headwinds, which include what Darroch calls “anaemic” consumer confidence and a weak advertising market.

Profit for the nine months to the end of March came in at just over £1 billion, lower than last time due to the extra £494 million spent on the Premier League.

HBO and Sky have history. HBO’s Game of Thrones is broadcast on Sky Atlantic in the UK, and Sky’s biggest shareholder Rupert Murdoch made a bid in 2014 for all of Time Warner.

That deal failed, but 21st Century Fox’s £12 billion bid for Sky looks set to go ahead.

So far, it seems the only significant objections to the deal have from the Guardian Media Group.

Media analysts say the general election could confuse the situation, pushing back clearance by a few weeks.

Sky revenues rose 11% to nearly £10 billion.

The shares, at 982p, are well shy of the £10.75 Fox bid, reflecting some concern that the deal could yet be blocked.