Outsider in the thick of it
Mike Darcey tells Andrew Billen that, while Sky would no longer claim to be an underdog, it will definitely never join the broadcasting establishment
From his office in what Sky high-mindedly calls its Osterley “campus”, its chief operating officer holds some commanding views. One, appropriately, is of the sky. Another, equally fittingly, is of a large television on which Mike Darcey jokes he enjoys 12 hours’ viewing every day – he arrives here from his home in Teddington at 7:15 each morning.
A third vista is of central London. Its distant cityscape somehow reinforces an impression I arrive with, which is that – although Sky is 23 years old and put £5.4bn into the UK economy last year – it remains an outsider: a big beast, but beating paths far from London’s broadcasting establishment.
My fears that Darcey will be a defensive interviewee have been heightened by reading some of his speeches.
In these he tends to play not just the outsider but the disgruntled outsider. Ofcom is closed-minded; the BBC’s licence-fee campaign is “threatening and Orwellian”; ITV and Channel 4 were “lemmings” for their free-online policies; Freeview a platform for the “elderly and economically inactive”. In person, however, he is cool but not belligerent and possesses a humorous, self-deprecating streak.
If, fussing with his Sky remote, he omits to offer a welcoming handshake – that might even be shyness. Occasionally, over our two hours, his long, fluent answers are interrupted by a just-noticeable stutter.
I ask whether the mindset of the underdog is one Sky likes to maintain.
“I’m not sure we’re the underdog, but I think we certainly consciously guard against any sense of ‘job done,’ any sense of complacency, any sense of, ‘we have arrived; we are a part of the establishment now’. Because then you get lazy and you just get attacked by the next young and keen and enthusiastic up-and-comer.”
Over the decades, its critics have seen Sky pass from being a folie de grandeur that would bankrupt its owners to the nemesis of public service broadcasting that will culturally bankrupt the nation.
With the 10 millionth subscriber signed in 2010 and the BBC still intact, the debate is quieter now. But, as Sky has moved into telephony, broadband and on-demand, objections remain.
Rivals protest at its clout in the movie and sports-rights markets (in the latter, the Competition Appeal Tribunal has just overruled Ofcom’s objections to Sky’s dominance). Viewers squeal when a previously free-to-air programme, such as Mad Men, is bought for Sky viewers’ private delectation. The view from Osterley is rather different.
“I think the fundamental story of what’s happened is that there’s been a constant stream of technological change, which has caused change in the industry,” says Darcey. “New business models have emerged and different people have played those in different ways.
“Sky has had a culture that’s seen this always as opportunity, an opportunity to do more, to do better, to do new things. Others have not. Some people have tried to stop the world turning, to fight it, hang on to the past, and that has not been very successful for them.
“Others have spent most of the time complaining about things to regulators, instead of getting on and thinking about customers and investing and building a better service.”
Did Sky not have its own distraction when, amid the phone-hacking scandal, News Corp last year withdrew its bid to buy the 60% chunk it did not own?
“We were certainly part of the story, because News Corporation wanted to own all of us, but we weren’t a central player and I think we worked very hard during that period not to get overly distracted by it,” he insists.
Would Sky be different if it were 100% owned by News Corp?
“I guess we shall never know,” Darcey says. The shareholders’ backing of the management team has not wavered. “The biggest impact on Sky, I think, from News Corp’s role, is not so much the News Corpness of it, but the fact of having a major, very stable, very committed shareholder with a very long-term view of the world.”
Towards the BBC – which Sky’s former chair, James Murdoch, savaged in his 2009 MacTaggart Lecture in Edinburgh – Darcey takes a positively conciliatory line. And only partly, I assume, because the screen facing him is showing its Olympics coverage.
“I think we’ve always had a good relationship with the BBC. Certainly I have. I think the BBC has been pretty pragmatic. We’ve always been able to get stuff done with the BBC.”
Last year he went to the BBC with a plan to make 24 live streams from the Olympics available on Sky and help with the costs. This year, iPlayer will become available on Sky Anytime+. Masters golf and Formula 1 are now shared with the BBC.
“Formula 1 is a property that Sky Sports coveted for many, many years, but [it] seemed to be permanently nailed on as a free-to-air property. But the time came and the opportunity was there,” Darcey says. “There came a point when we were interested and the BBC was interested in the conversation.
“So that deal got done between Dominic Coles [chief operating officer of the BBC News Group] and myself at the Tide End Cottage pub in Teddington over a couple of evenings.
“We took a proposal to Mr Ecclestone. After a few weeks he said, ‘Yep, let’s do that.’ Bernie had said only three months earlier, ‘Formula 1 will always be a free-to-air property.’”
What about ITV? “ITV spent 15 years trying to stop the world turning, trying to turn back the clock. This feels like the first ITV management team that’s actually said, ‘Right, this is the way the world is. This is the way the world is going. What do we want ITV to be in that future world?’”
And Virgin and BT? “Well, Virgin and its predecessors focused on going bust a few times, but mainly focused on not doing stuff for themselves but complaining a lot.
“I think Virgin has got itself into a much better place. It is complaining less and is focused on what it is good at, where its advantages lie, where its strengths are, and it’s doing a much better job.
“BT has really picked up the mantle of spending most of the time complaining. Its latest move [into soccer] is the first real sense that it might actually try to do something for itself.”
Darcey, 47, who speaks in a soft Antipodean accent, was born in Oxford, where his Australian father, Warwick, a nuclear physicist, was studying at Magdalen College. The family moved to the US when Mike was five and after a year to Wellington, where Warwick taught at the university.
In New Zealand Mike grew into a competition-level athlete. Presciently enough, in 1989 his spins and flips featured on the launch advertisements for New Zealand’s third tele-vision channel. After taking a post-graduate maths degree in New Zealand he moved to London to study economics at the LSE.
His first job was as an economic adviser with Lexecon, a consultancy specialising in regulatory and competition law disputes. His two largest clients were BT and BSkyB. “So there was a certain inevitability, I think, that one of them was going to hire me, and I’m pretty happy that Sky came first,” says Darcey.
The transition from a very small firm to Sky was made harder by the sudden illness of the man who had recruited him, Sky’s chief financial officer, Nick Carrington. Darcey called him just before Christmas 1997 to say he had signed his letter of acceptance and would phone in the New Year to discuss a start date. “And that was the last time I spoke to him.”
Carrington died of a heart attack following kidney failure. Darcey arrived to find Sky in shock and no one sure who he was or what his job should be.
He started turning up at meetings, and it “sort of built from there”. It certainly did. Having established Sky’s strategic planning group, he became chief operating officer in 2006, two years after Sky had set itself a target of 10 million subscribers by the end of the decade (no one, he says, can quite remember who thought up that wild goal). His responsibilities included negotiating deals worth millions to secure those viewers. This summer he signed a £2.28bn contract with the Premier League.
“I was just reflecting on it the other day because I’ve just got through my fifth Premier League renewal,” says Darcey. “The first one I ever did in 2000 was a pretty stressful experience, and I remember sitting in the bar afterwards with the guy who was head of Sky Sports at the time, and he and I over beers agreed we were never, ever, ever going to do that again.
“And then three years later you do it again and again and again and again. I’m on five. They’re all pretty stressful. And they’ve all been different. They’ve all been exciting. They’ve all been stories that you wouldn’t want to have not been part of.”
Is that the fun, then: the deal, the handshake? “What’s the fun? I mean, yeah, doing the deals is always fun, doing the big deals and getting those calls right. But, in the end, I think the overall motivation is what has been the motivation for Sky and that is to make television better for the UK viewer. I think that has been what’s driven people.”
Yet he is aware, too, that the broadcaster’s success has not been enough to make it universally loved, no more than Sky News’s trail-blazing and Sky Sports’s transformative soccer coverage has necessarily won it credibility those 10 long miles away in Soho.
He thinks it is Sky Arts that is changing perceptions there. More hearts are being won over by Sky Atlantic, where media favourites such as Mad Men are to be found; he insists it is performing better now in Sky homes than it did when it was on BBC4.
And now Sky is investing massively in original comedy and drama. “There’s a view in some communities,” suggests Darcey “that you can spend all the money you like on content, but until you make original British drama nothing really counts.”
So does the schoolboy athlete turned young academic turned businessman now feel he is a TV person?
“I’ve been with Sky nearly 15 years,” Darcey replies, “and worked for it as an advisor three years prior to that. So I think it might be even worse than being a TV person – I might be a Sky person.
“I’m not sure, but I think I might be so institutionalised I’d never work for anyone else again. Sky’ll kick me out one day, but whether I’ll be any use anywhere else by that time, I’m not sure.
“It’s just been such a fantastic place to work, such a story to have been part of, such a place of passion and drive. It will come to an end for me one day. Finding that again somewhere else – that’ll be tough.”