BSkyB hit with £21m legal bill as EDS battle continues

Sky expects to incur a total of £21m in legal costs this year as it continues its battle against EDS.

Sky reported £17m of legal costs arising this year from its claim against EDS, which provided services to the group as part of the its investment in CRM systems software and infrastructure.

The broadcaster has already spent £9m in 2007 on the case.

BSkyB rolled out the CRM system with EDS in 2000, but severed the relationship in early 2002 and, after failed discussions, decided to take legal action.

Revenue for Q1 2008 was up 10% but the broadcaster reported a loss of £118m over the nine months to the end of March 2008.

"We currently expect to incur exceptional costs of around £21m in total for the 2008 financial year in respect of this claim," said Sky in its interim results.

BSkyB began its case last year seeking £709m in damages, part of which is compensation for alleged lost ­benefits. EDS denies the allegations.

Operating expenses increased by £193m to £790m primarily due to the inclusion of residential broadband and telephony and Easynet Enterprise.

Total administration costs of £395m included the £17m exceptional charge relating to the legal costs of BSkyB's claim against EDS, a full nine-months' of consolidation of Amstrad and 365 Media costs and higher depreciation following investments in IT infrastructure and systems.