British Sky Broadcasting posted its fourth quarterly loss in a row yesterday and moved to enhance its sports might with a £300 million sterling (A501 million) agreed offer for Sports Internet Group.

Unveiling its third-quarter results, BSkyB said it slipped into a pre-tax loss of £28.4 million (A47.4 million) from a profit of £16 million due to heavy subscriber acquisition costs.

But worries over growing competition and the prospect of BSkyB having to dig deep into its pockets to clinch the next Premier League soccer screening rights deal sent shares in Europe's second biggest pay-TV company over 13 per cent lower.

"The shares are suffering as there was no surprise on the upside as we've seen the last few times. There's also some uncertainty over the cost of the transition to broadband, increased competition from cable and how much they will pay for soccer rights," said Mr Julien Roch, analyst at Lehman Brothers.

BSkyB, 37.5 per cent owned by Rupert Murdoch's News Corp and 25 per cent by France's Vivendi, has been handing out free set-top boxes to increase take-up of its digital service and keep competition at bay - so far successfully.

But cable operators such as NTL and Telewest are starting to break into the market with their own digital services and competition for sports and movie rights looks set to get heavy. Sport has been a keystone of BSkyB's success, and Sports Internet would bring the broadcaster's skysports.com venture closer to its goal of becoming the leading sports Internet site.

Set up by Freeserve founder Mr Peter Wilkinson, Sports Internet's prized asset is Planetfootball, which runs a portfolio of Premier League Websites.

Under the terms of its bid, BSkyB said it was offering 0.5622 new BSkyB shares for each Sports Internet share, valuing Sports Internet at around 850p per share based on Tuesday closing prices, or a total £301.3 million.