* £5.4 billion contribution to GDP in 2011
* Almost 120,000 UK jobs supported
* £2.3 billion tax contribution generated
The impact made by Sky on the UK economy is revealed for the first time in a comprehensive, independent study conducted by the leading economic consultancy, Oxford Economics.
The report, The Economic Impact of Sky on the UK, finds that Sky makes a significant contribution to the economy in terms of GDP, jobs and taxes paid. It also shows how the company has stimulated economic activity in a wide range of associated companies and industries, through relationships with thousands of UK suppliers and business partners. The report concludes: "Sky’s footprint is UK wide and its contribution is felt in almost every part of the country."
The key findings from the study include:
Contribution to GDP
- Sky is estimated to support a £5.4 billion contribution to UK GDP in calendar 2011.
- In that year, Sky generated sales of £6.4 billion and over 75% of this revenue was retained in the UK.
- Sky’s direct contribution to GDP of £2.2bn is equivalent to around 40% of the contribution made by the entire TV and radio creative sector in the UK.
- For every £1 billon Sky contributes directly to GDP itself, it generates another £1.4 billion in the rest of the economy through its purchase of goods and services and staff spending their wages.
- In 2011 Sky used 4,000 suppliers across the UK, including 645 independent suppliers in sports production and 110 independent producers in entertainment and the arts.
Contribution to jobs:
- At the end 2011, Sky employed 22,800 people in the UK, more than half as many as the entire pharmaceuticals industry. This included 9,400 people in London, 6,430 in Scotland, and 1,560 in Yorkshire and Humberside.
- 2,600 people are employed by Sky in producing and commissioning content. This is set to grow as Sky increases its investment in original British content to £600 million by 2014. By the end of 2011, Sky had already increased its UK content spend to £450 million a year.
- In the last three years, Sky has hired 3,800 young people (16 to 24 years), including nearly 300 graduate trainees and apprentices.
- Sky employs 800 engineers in software development and testing, representing 1% of all people employed in the UK’s software development industry.
- Sky supports thousands more jobs through the suppliers it uses and the products and services it procures.
- In total Sky is estimated to support 118,600 jobs in the UK through its procurement of goods and services and consumer spending out of the wage income of its staff. This includes 1.2% of all employment in London and 0.6% of all jobs in Scotland.
Contribution to tax revenues:
- In the financial year 2010/2011, Sky directly contributed a total of £941 million to the Exchequer.
- Of this, £337 million came through corporation tax and business rates, with the balance collected on behalf of HM Treasury through employees’ labour taxes and customers’ VAT payments.
- In total, Sky is estimated to support a £2.3 billion contribution to tax revenues, including Sky’s procurement of inputs and direct and indirect staff spending is included. This is equivalent to £36 for every person in the UK.
Jeremy Darroch, Sky’s Chief Executive, comments:
"We have grown rapidly since our business 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. 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.
"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."
The full report can be downloaded by clicking here.
An infographic outlining the report’s key findings can be downloaded by clicking on the image below:
About Oxford Economics
Oxford Economics – formerly Oxford Economic Forecasting – was founded in 1981 to provide independent forecasting and analysis tailored to the needs of economists and planners in government and business. It is now one of the world’s leading providers of economic analysis, advice and models, with over 300 clients.
The author, Andrew Logan, is a Senior Economist in Oxford Economics’ Consultancy Team. He has undertaken a range of economic analyses projects in the television and film area. These include: the economic impact of Channel 4, the economic impact of UK film and the economic impact of various tax reliefs on the UK film. Prior to joining Oxford Economics he spent 15 years working as an economist at the Bank of England in various roles.
This report investigates Sky’s contribution to the UK economy. It undertakes a standard economic impact analysis looking at the impact of the company on the economy through its own activities (direct effects), the impact of its procurement (indirect) and staff spending their wages on consumer goods and services (induced). Impact is measured in terms of the contribution to GDP, employment and tax revenues generated. The report then looks at the additional economic activity the company enables (termed the ‘catalytic’ effects), quantifying these where possible.