Sky Network Television has signed a conditional five-year deal to secure broadcast rights to the New Zealand Rugby Union and Sanzar unions for an undisclosed amount, a deal it could not afford to lose.
The share price rose quickly on the news.
Craigs Investment Partners broker Chris Timms said the dominant pay-television company in New Zealand was probably losing subscribers through the loss of some golfing and football rights.
But rugby and cricket reigned supreme and Sky could not afford to lose either.
Securing the rugby rights had been a major plank in the company's success in penetrating almost half of the country's households, and its investment in broadcast equipment meant it was the only entity able to offer comprehensive coverage of local rugby, he said.
''People with Sky don't usually get it to watch television programmes; they want to watch sport. People tell me they are cancelling because of the loss of golf but for me, it's all about the rugby.
''This has to be good news for Sky but the big question will be how much they paid for it. It won't have been cheap.''
Sky broadcasted a lot of local rugby and sporting content, but the international games were the major drawcards, Mr Timms said.
Sky TV still faced increased rivalry from firms using cheaper web-based platforms, such as sports-focused Coliseum and entertainment-focused offerings from Spark New Zealand, formerly Telecom, as well as overseas services from the likes of Netflix, Quickflix and Ezyflix.
Sky TV yesterday forecast its annual profit to rise as much as 8.6% in the 2015 financial year, and planned to upgrade its customer set-top boxes and roll out Neon, a new web-based on-demand service.
The Auckland-based company forecast annual profit of between $170 million and $180 million in the 12 months ending June 30, 2015, from $165.8 million in 2014.
Revenue was expected to rise to between $930 million and $940 million, from $909 million in 2014, according to slides accompanying chief executive John Fellet's speech to shareholders at the annual meeting.
Sky TV anticipated capital expenditure to rise to between $115 million and $125 million in the 2015 year from $93.2 million in 2014.
It planned to introduce a new video on-demand service targeting non-Sky customers as it faced intensifying competition for viewers, Mr Fellet said.
From March, Sky would embark on a plan to replace its old Sky decoders, giving existing customers My Sky recording services and internet connectivity.
''At completion in 2016, we effectively double our usable satellite capacity. Right now, we are essentially dual broadcasting content to the two decoder types,'' chairman Peter Macourt said in speech notes published on the stock exchange.
''This opens up future broadcasting opportunities for more channels, more HD content, and even ultra HD, with the increased capacity.''
Shares of Sky TV last traded up 2.9% to $6.10.
