Discovery and Sky agree ad partnership

Discovery Communications Europe and Sky Media, (the advertising sales division of BSkyB) have ended their 12 month legal dispute over terms for advertising representation and come up with a new £200m (E217m) four-year deal.

Sky Media will represent Discovery as its sole airtime advertising sales agent in the UK across its portfolio of 13 channels including Discovery Channel.

The deal is critical for BSkyB, as Discovery’s premium channels account for more than 15% of the TV advertising airtime that Sky Media offers to advertisers. Sky Media made £308m in ad revenue in the year to the end of June. The deal has been signed just ahead of the crucial trading season between TV companies and media agencies to secure billions of pounds of TV ad deals for 2010.

Without Discovery on board to boost its muscle in negotiations against rivals such as ITV, Channel 4 and Five, the satellite broadaster would have found it difficult and potentially lost millions in other deals.

BSkyB and Discovery have been locked in a legal wrangle for a year over a disagreement in the terms of the existing contract, which expires at the end of the year.

Discovery argued it was guaranteed extra revenue if its channels reached certain viewing targets and that it was owed multi-millions of pounds as a result. BSkyB disagreed and the legal battle was heading for the high court next month.

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