Baaaaad news from BSkyB

This coming Friday will see BSkyB unveil its latest quarterly results (3 months to Sept 30), and the news had better be good. The problem is the market has already decided that Sky's news is probably going to be baaaaad.

Friday (Oct 24) saw Sky's already miserable share price tumble another 43p (to 329p, and a 10-year low for the stock) and continuing a massive 4-day fall of 80p from 410p. But more worrying is that this time last year Sky's stock price was in 700p territory. This past week has not been helped by a highly negative reports from stockbrokers Collins Stewart, and investment bankers Dresdner Kleinwort.

Collins Stewart said that BSkyB would fail to hit its 10m subscriber 2010 target, falling short by around 600,000 customers. "We believe BSkyB faces greater threats to its business model than ever before," said the brokers. "Recession, technology shift and regulation could together combine to make the perfect storm." The report draws comparisons between the current sharp economic downturn and forecasts that British pay-TV subscribers are going to tighten their belts from now through 2010. "By then the UK may be mid-recession, Ofcom should conclude its potentially damaging pay-TV review and BSkyB will be riding the uncertainty of the next Premier League rights auction," the report added, suggesting that Sky might have to cough up an extra 500m over the current three-year fee of 1.31bn for its next batch of Premiereship English league soccer matches.

Then, to add salt into Sky's wound, Dresdner's came out with its note, and cut its price target for the broadcaster from 480p to 430p, and expressed anxieties that Sky might be looking too closely at bidding for Spain's Digital+ pay-TV platform.

Not helping matters is a yet another report (from Continental Research) suggesting that BSkyB's all-important ARPU numbers will also slip, and stating that its study showed that 10% of Sky subscribers that its sample covered "planned to end their subscriptions".