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Report: Sky to buy Virgin channels

by Scott Bicheno on 27 May 2010, 14:35

Tags: Virgin (NASDAQ:VMED)

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The right kind of choice

A source close to the deal has told The Guardian that satellite TV giant BSkyB is on the verge of buying all the TV channels owned by its rival - Virgin Media. "We are absolutely steaming ahead, and it should be done, if not by the end of this week, then next week," said the source. There was no official comment from either company.

Virgin Media Television's channels business owns Virgin 1, Living, Bravo and Challenge. It's understood that Sky would shell-out £150-£160 million for them in the culmination of what have been lengthy negotiations. The

The Guardian report also suggests that RTL, which owns Five, is looking to flog the channel and is speaking to anyone that will listen. In the past two years, it seems, RTL has dropped its valuation of Five from €600 million to  €100 million. That's got to chafe.

Finally, BSkyB continues to chunter about the strategic review undertaken by the BBC Trust. An open letter from Graham McWilliam, Group director of corporate affairs at BSkyB, accuses the BBC Trust of failing to discharge its responsibility to set the Beeb's strategy. He argues that, with the commercial sector delivering more than ever, further scaling back of the Beeb's operations would best represent the interests of licence fee-payers.

"It is important to recognise that the interest of license fee payers is not identical to the interest of the BBC," wrote McWilliam. "License fee payers want provision of content from a wide range of sources, including the commercial sector."

All good points, and we agree that the Beeb shouldn't be responsible for stifling innovation and growth in the commercial broadcasting sector. But it's hard to reconcile this concern he claims BSkyB has about ensuring a wide range of content sources with its decision to buy the content arm of its main competitor.

 



HEXUS Forums :: 11 Comments

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Surely that won't get through competition laws?
There are still loads of other channels not owned by Sky.
The whole ‘channel’ concept is pretty much outmoded with modern technology anyway. All channels are going to become worthless in time.

Still, there's hardly an abundance of channels not owned by BSkyB, they already control enough of them when it comes to British broadcasting.
Scott B;1929498
There are still loads of other channels not owned by Sky.

True, but when they're weakening Virgin and strengthening Sky that only makes things worse.
They might as well go all the way and rename Virgin media to Sky Cable Division and be done with it.