Sky homes in on Virgin Media channels
February 16, 2010
Virgin Media is reportedly in the final stages of selling its wholly-owned television channels, including Virgin 1 and Living, to BSkyB after months of negotiations.
According to Media Guardian, Virgin Media suggest that a deal is very much on the cards, even though related talks relating to UKTV â€“ the independent commercial joint venture, between Virgin Media and BBC Worldwide, the commercial arm of the BBC – are understood to have been stalled as recently as last month. Furthermore, Virgin Media Chief Executive Neil Berkett told the Financial Times at the beginning of February that because Virgin had undertaken a series of refinancing deals that reduced net debt and postponed the maturity dates of loans towards the end of the decade, there was “no compelling need” to sell assets such as its pay-TV channels.
Sky chief executive, Jeremy Darroch, has previously said that the satellite TV broadcaster would potentially be interested in buying Virgin Media’s channels business.
For Sky, the UK’s largest pay-TV business with 9.7 million customers, one benefit of a deal would be that it would no longer have to pay £30 million a year to distribute Virgin’s channels, which also include Bravo and Challenge, via its satellite TV service.
Buying Virgin 1 would also provide Sky with a coveted channel slot on the Freeview digital terrestrial TV service, though it would most probably have to be rebranded.