The chief executive of Sky, Jeremy Darroch, is cashing in £11.5m in shares, the company announced as it reported a hefty fall in annual profits.

Darroch and Sky’s finance chief, Andrew Griffith, are to sell a combined 1.9m shares, worth £18.3m at Thursday’s share price of £9.65, which were awarded as part of Sky’s long-term incentive plan. In 2015 and 2016, Darroch’s total remuneration was £17.9m and £4.7m respectively.

Darroch has also been awarded 600,000 shares under the incentive scheme, worth £5.8m at the current share price. Griffith received 350,000, worth £3.4m. They will vest in July 2019, subject to hitting performance targets.

The broadcaster, which is waiting to see whether Rupert Murdoch’s £11.7bn takeover bid will be referred to competition authorities, reported a 14% fall in operating profits to £1.3bn at its UK and Ireland operation. The decline was mostly due to a one-time rise in the cost of its Premier League rights deal of £629m.

It said that in the UK and Ireland – its most important market, accounting for almost 90% of profits – it added 280,000 new customers in the year to the end of June, with 111,000 subscribers taking its TV services.



However, the rate at which customers left Sky for rivals, a key metric watched by analysts and investors, rose from 11.2% to 11.5% over the year. The company said the rate had come down since March, but that it was too high.

“It is a competitive world out there,” said the Sky chief executive, Jeremy Darroch. “There is more movement between platforms [rivals] than in the past. We need to keep focused and keep executing our plans. We have good plans in place.”

These plans include the creation of the 300 new tech roles, which will increase its software engineering workforce by 25%, for its Sky Labs operations in Milan, Leeds and London to keep pace with rivals such as Netflix and Amazon.



Gwendoline Christie as Brienne of Tarth in Game of Thrones season seven, currently airing on Sky Atlantic. Photograph: Helen Sloan/HBO

The company said the staff will be tasked with driving the development of its streaming services, which are set to expand with a new service in Spain and a broadband-delivered TV service for those who cannot, or will not, have a satellite dish.



Earlier this week Amazon, which runs the Prime TV service, announced it is doubling the number of research and development staff it employs in London. Earlier this month Netflix, which has grown rapidly to an estimated 6.4 million UK subscribers, passed the 100 million customer mark globally.



Darroch said that services such as Netflix, which Sky does not allow customers to access via its set-top box, were not a direct threat to his business.



“We try hard to be friendly with everybody,” he said. “A lot of our customers take Netflix alongside their bundle, not at the expense of Sky but alongside Sky.”



Sky is also beefing up its budget for original programmes by 25%, thought to be as much as £150m annually, as it looks to continue to reduce its reliance on sport and remain competitive with deep-pocketed rivals such as Netflix.

Darroch said that with the new investment, which brings Sky’s total budget for original shows to potentially as much as £750m a year, it will see four original dramas launch each quarter for each of its territories.

Sky also announced the first fruit of a $250m (£190m) co-production deal with HBO, the US network behind hits such as Game of Thrones and Sopranos, a mini-series called Chernobyl based on the 1986 nuclear plant disaster.

The company’s total operating profits fell by 6% to £1.47bn for the year, which it said was an “excellent” result given the additional Premier League cost and £51m spent to date getting its Sky Mobile service up and running.

Darroch said the protracted process surrounding Rupert Murdoch’s bid to take full control of Sky, which has so far cost it £16m in advisory fees, was not affecting the day-to-day running of the business.