Virgin/Sky Channel Dispute Continues
Virgin Media has rebuffed Sky’s attempts to end the channel carriage dispute after James Murdoch, BSkyB CEO, wrote to Steve Burch, chief executive of Virgin Media, suggesting that the companies “meet in the middle”.
In a letter released by Sky, dated May 10, Murdoch said: “The speedy return of Sky One, Sky News, Sky Sports News and the other Sky basic channels to the Virgin Media platform is clearly in the best interests of customers and viewers and, we believe, of both companies. We urge you to make good on your promise to customers and work with us to bring about a speedy resolution.
“We continue to believe that the best and quickest way to resolve this situation is for Sky and Virgin Media to negotiate and agree new contract terms for the carriage of our channels on your network. That is why we have reached out to you to return to the negotiating table, and why we’ve been working with the National Consumer Council to find a solution for customers.
“Our new offer is that we simply split the difference between each party’s last offer in respect of the carriage of our basic channels. As you will appreciate this represents a significant ceding of value to Virgin Media on our part.”
However, Burch apparently turned down the proposal from Sky, saying that the satellite broadcaster had taken its channel from the Virgin platform after demanding an extreme and anti-competitive price. He added that Sky’s new offer does not promote good faith discussions.
In a second letter, dated May 18, Murdoch responded by saying that it seems that Virgin is not interested in resolving the dispute and accused Virgin of not making a “meaningful engagement” with Sky’s attempts to end it, adding that there is now “little prospect” of the channels being restored in the immediate future.
Sky said that Virgin Media has not tabled an offer for the channels since February 22, a week before the end of the previous carriage deal.
Virgin Media subscribers were left unable to view the basic Sky channels in February after talks between the companies broke down (see Virgin Media And Sky: The Story So Far).
Sky’s offer for the package was around £40 million, however Virgin was unwilling to pay more than £30 million.
At the end of April, Virgin Media submitted papers to the High Court in support of its argument that it is the victim of a deliberate strategy by BSkyB to stifle competition in the UK pay-TV market (see Virgin Media Submits Sky Complaints To High Court).
Virgin Media: www.virginmedia.com