BSkyB buys Virgin Media TV for £160m

BSkyB has bought Virgin Media TV for £160 million, in a deal which will see Sky pay £105 million in cash on completion, with the remainder paid following completion of the regulatory process.

If the deal is given the all-clear, Sky will assume responsibility for selling advertising for VMtv channels from January 2011, taking over from Virgin’s sales house IDS. IDS is also the sales house for UKTV, Virginmedia.com and Virgin Mobile.

The acquisition expands Sky’s portfolio of basic pay TV channels and eliminates the carriage fees it pays for distributing Virgin channels on its TV services.

The Virgin channels include Living, Livingit, Challenge, Challenge Jackpot, Bravo, Bravo 2 and Virgin1.

New carriage agreements will secure wholesale distribution of Sky’s basic channel line-up, including Sky1 and Sky Arts, and the newly acquired VMtv channels, on Virgin Media’s cable TV service.

Virgin Media will also have the option of carrying any of Sky’s basic HD channels, Sky Sports HD 1 and Sky Sports HD 2, and all Sky Movies HD channels, for an incremental wholesale fee.

A range of content from Sky’s basic and premium channels will also be made available on Virgin Media’s on-demand service.

Jeremy Darroch, CEO, BSkyB, said: “VMtv is an attractive investment opportunity which complements our existing content business and delivers strategic and financial benefits. We are pleased that, through commercial negotiation, we have been able to ensure wide distribution of our channels to a growing pay TV universe.”

Neil Berkett, CEO, Virgin Media, said: “The sale of our channels business has generated substantial value. Together with the new commercial agreements we’ve announced today, it will allow us to focus more closely on our strategy of exploiting Virgin Media’s super-fast connectivity to offer our customers a range of the very best content through a highly versatile next generation entertainment application.”