BSkyB buys Virgin Media TV channels for £160m

The pay-TV company is buying VMTV's portfolio of subscription channels – Living, Livingit, Challenge, Challenge Jackpot, Bravo, Bravo 2 – and Virgin1, which is available on digital terrestrial TV service Freeview.

Sky Media will also take over selling advertising airtime on VMTV's channels from Virgin's sales house, IDS, in January 2011.

As part of the deal, Virgin Media has secured new long-term carriage agreements for its cable TV network for wholesale distribution of Sky's basic subscription channels, including Sky1, Sky News and Sky Arts, and the services it is selling.

The new carriage deals are understood be for up to nine years. Previously the carriage deals tended to be struck every three years.

For an incremental wholesale fee, Virgin Media will also for the first time 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.

Content from Sky's basic and premium channels and the VMTV services will be available through Virgin Media's on-demand service. Virgin Media will also have access to Sky Sports' red button interactive coverage and be able to deliver some Sky programming over the internet.

MediaGuardian.co.uk revealed last week that a deal was very close to be finalised after more than a year of complex negotiations.

The sale of VMTV to Sky is expected to be the first step in a consolidation of the UK commercial TV sector that is also likely to see new ownership of Channel Five.

Jeremy Darroch, BSkyB chief executive, 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, chief executive of Virgin Media, added: "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."

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source: http://www.guardian.co.uk/media/2010/jun/04/bskyb-buys-virgin-media-channels