SKY move for Virgin Media Television

mike65

http://www.guardian.co.uk/media/2010/may/26/virgin-channels-bskyb-five-sale

There will be little left on a Sky dish soon that isn't Sky.

icdg

Almost certainly would mean the end of Virgin 1 as a seperate entity, although no doubt some of its rights would return to Sky One (indeed it could lead to Sky Two regaining its own schedule, at the moment it is basically Sky 1+1).

The other channels would no doubt survive in some shape or form with perhaps new names incorporating the Sky brand.

What would be more interesting is what would happen to UKTV, the home of witty banter, and stupid channel names alike. Would this sale include Virgin's 50% stake in the business (the BBC owns the other 50%)?

Meanwhile, what's happening to Channel 5? Rumour has it ITV have their eye on it, but would they be allowed own more than one major terrestrial network? In the digital age, there's a good argument that they might be.

BuffyBot

icdg wrote: »

What would be more interesting is what would happen to UKTV, the home of witty banter, and stupid channel names alike. Would this sale include Virgin's 50% stake in the business (the BBC owns the other 50%)?

I don't believe it does. From memory, BBC Worldwide get a veto/first option on the sale of the UKTV channels.

watty

And should Sky be allowed to purchase the Virgin Channels?

Should a Pay Platform owner in UK due to lack of payplatform competion be allowed to own ANY channels?

Other countries have multiple major PayTV operators on Satellite and sometimes more than one on Fibre or DTT. Or Cable/Fibre operators with no channels of their own.

ftakeith

watty wrote: »

And should Sky be allowed to purchase the Virgin Channels?

Should a Pay Platform owner in UK due to lack of payplatform competion be allowed to own ANY channels?

Other countries have multiple major PayTV operators on Satellite and sometimes more than one on Fibre or DTT. Or Cable/Fibre operators with no channels of their own.

if sky are smart they could get all the decent programmes and moved them from those channels to sky1, sky2, sky3 for quality programming

is it possible

byte

REAL Digital could buy them!

That said, I'd doubt very much they have much funds for such acquisitions.

Elmo

icdg wrote: »

What would be more interesting is what would happen to UKTV, the home of witty banter, and stupid channel names alike. Would this sale include Virgin's 50% stake in the business (the BBC owns the other 50%)?

The article seems to think that it would not include UKTV channels rather that Channel 4 may look to take hold Virgin's stake in the company however that has been put on hold if it ever does happen. While C4 may take over Ad sales for UKTV.

To me it seems like Sky will move to bring Virgin 1 into the pay model on DTT service in the UK. However why is sky interested in Virgin 1, Living and Bravo? Aren't they just copies of Sky 1? So much for the big shake up Virgin 1 planned when they re-branded from FTN.

Minstrel27

Elmo wrote: »

However why is sky interested in Virgin 1, Living and Bravo? Aren't they just copies of Sky 1?

Living gets good ratings I think. They are more like what Sky 1 was a few years ago i think. Reality rubbish has been creeping into the Sky 1 schedule for a while now.

icdg

Elmo wrote: »

To me it seems like Sky will move to bring Virgin 1 into the pay model on DTT service in the UK. However why is sky interested in Virgin 1, Living and Bravo? Aren't they just copies of Sky 1? So much for the big shake up Virgin 1 planned when they re-branded from FTN.

Sky will almost certainly close Virgin 1. The only reason it exists (and FTN before it) is to act as a FTA "shop window" for Bravo, Living, and Challenge on DTT. Sky has Sky Three for that. The fact that it (Virgin 1) is on other platforms too is a happy concidence and a way to maximise the advertising revenue. There is speculation in fact that the main reason Sky is after VMTV is to get Virgin 1's place on the platform.

Bravo and Living are seemingly a lot like Sky One, but are quite different beasts in that they are quite explicitly aimed at young men (Bravo) and women in general (Living) rather than Sky One, which would seek to transcend gender lines.

Challenge stands apart, it's its own channel and has its own fanbase. It won't really sit well with the rest of Sky's portfolio though, but arguably neither does either Sky Arts or Sky Real Lives.

Elmo

icdg wrote: »

Bravo and Living are seemingly a lot like Sky One, but are quite different beasts in that they are quite explicitly aimed at young men (Bravo) and women in general (Living) rather than Sky One, which would seek to transcend gender lines.

Only in terms of Male V Female but ultimately like many channels they happily reside in the General Entertainment Category in the same manner as MTV and Discovery have become General Entertainment services of late.

I would say Virgin 1 and Sky 3 will merge, Virgin Sky or something.

Minstrel27

Why would Sky keep the Virgin brand alive on any channels that they buy?

Elmo

Minstrel27 wrote: »

Why would Sky keep the Virgin brand alive on any channels that they buy?

Again according to the article both Sky and Virgin see FreeView as the common enemy. It might be part of the deal.

But another question is will the keep Living and Bravo Brands alive?

Minstrel27

I would see no reason not to. Living is popular enough and Bravo has its own market

icdg

I wouldn't see Sky being allowed use the Virgin brand. Remember the brand is not Virgin Media's to do as they please with, it is owned by Richard Branson. Virgin Media (and hence VMTV, as a wholly owned subsidary thereof) only licence the brand from Branson (behind the scenes, they are after all the same NTL, Branson only has a very small minority stake in the company) and any deal to further sublicence it to Sky would need to have his consent, and no doubt, a heafty licencing fee.

Its cheaper and simpler for Sky not to licence the Virgin brand (after all, why would they dilute their own brand in such a manner?) and to rebrand Virgin 1, if not close it completely (which I think more likely). This problem doesn't arise with any other VMTV channel as VMTV (nee Flextech) own all the other brands they use outright.

Mike 1972

Is there any reason why the likes of Canal +, Mediasat, RTL etc cant/dont move into the UK/Ireland market by acquiring some of these channels

Okay I know RTL (for now) have a stake in Five as it stands but in most European countries they have a much bigger presence.

Is there some resaon why mainland European media groups dont have much presence in the UK market ?

Minstrel27

Deal has been completed

Mediaweek website wrote:

BSkyB has acquired Virgin Media Television for up to £160m and entered into a number of agreements providing for the carriage of certain Sky standard and high-definition (HD) channels.
Sky: buys Virgin Media TV for £160m
Sky: buys Virgin Media TV for £160m

Today's acquisition will expand Sky's portfolio of basic pay TV channels and eliminate the carriage fees it currently pays for distributing VMtv channels on its TV services.

The acquisition will also result in Sky assuming responsibility for selling advertising for the newly acquired VMtv channels from January 2011.

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.

Sky is believed to have fought off bids from Channel 4 and RTL to secure the acquisition.

Completion of the agreements is conditional on obtaining merger control clearance in the Republic of Ireland.

Once passed, a range of content from Sky’s basic and premium channels, including the newly acquired VMtv channels, will be made available through Virgin Media’s on-demand TV service.

Virgin Media will also have access to red button interactive sports coverage and the opportunity to deliver selected standard definition programming over the internet.

Jeremy Darroch, chief executive of 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."

Sky and Virgin Media TV have been bitter rivals ever since the formation of the cable operator through the merger of Telewest and NTL in 2005.

From the outset James Murdoch, then chief executive of BSkyB, infuriated VMtv management when he secured a 17.9% stake in ITV in late 2006, thwarting a potential takeover by Virgin Media.

The move ultimately lost Sky in the region of £350m after it was forced to sell the majority of its stake in ITV for £196m in February.

At the start of 2007, the two TV companies began a very public war of words over a dispute over carriage rates for the use of Sky's major channels.

Relations hit rock bottom in March 2007, when Sky stopped airing its channels on the cable network altogether, leaving 3.3 million subscribers unable to watch the end of several high profile series such as 24, Lost and Nip/Tuck, along with popular shows like The Simpsons.

Both parties blamed the other for being unable to reach a satisfactory agreement, in a stalemate which raged for more than 18 months. Sky's basic packages – including Sky One and Sky Sports News, only returning to Virgin Media TV on 13 November, 2008, amid the threat of pending High Court proceedings against each other.

The two companies have cooperated better after Jeremy Darroch was promoted in December 2007 from chief financial officer to chief executive of BSkyB.

Last year, Virgin Media pushed ahead with plans to take a secondary listing in the UK in a bid to raise its domestic profile and the number of its investors.

At the time, Neil Berkett, the chief executive of Virgin Media, said the company was at an "inflection point" after a robust financial performance and was "extremely attractive" for investors.

Today he 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."

http://pressoffice.virginmedia.com/phoenix.zhtml?c=205406&p=irol-newsArticle&ID=1434556

http://www.mediaweek.co.uk/News/MostEmailed/1007965/Sky-buys-Virgin-Media-TV-160m/

Elmo

I don't see why this take over would interest ROI's Competition Rules???? Neither are Irish companies.

I would love to see the Competition Authority say no to this merger. Can't see it happening. Can't see them being interested. Can't see Virgin or Sky taking that ruling seriously. Surely it is a bigger deal for the UK competition authority.

mike65

Completion of the agreements is conditional on obtaining merger control clearance in the Republic of Ireland.

Anyone fancy putting odds on Eamon Ryan putting the skids under this deal?

edit - snap!

Elmo

mike65 wrote: »

Anyone fancy putting odds on Eamon Ryan putting the skids under this deal?

edit - snap!

It seem to be a competition authority issue which would not be Minister Ryan's Portfolio. Batt O'Keeffe would be the Minister with Responsibility for such issues.

http://www.compecon.ie/imlaw.htm

Would seem sky earns more than €40,000,000 in Ireland.

I assume it will appear here soon enough http://www.tca.ie/EN/Mergers--Acquisitions/Merger-Notifications.aspx

channelsurfer2

interesting the mention of ireland on it. wonder will our competition authority acutally have any teeth and block it or is it just straightforward?

Elmo

channelsurfer2 wrote: »

interesting the mention of ireland on it. wonder will our competition authority acutally have any teeth and block it or is it just straightforward?

They probably won't care and just consider them really outside our jurisdiction and simply allow it to happen.

Audience share
Sky 1 = 1.41
Sky News = .55
Sky Sports 1 = .89
Sky Sports 2 = .43
Sky Sports News = .63
Living = .96
Total = 4.87 + Bravo + Living+1 + Bravo+1 + (Sky Movies *10) + Sky Sports 3 + Sky Arts + Sky 2 + Sky 3 + Virigin 1 etc.

Elmo

http://www.tca.ie/EN/Mergers--Acquisitions/Merger-Notifications/Sky--VMtv.aspx?page=1&completed=False&year=0

Elmo

Sky are moving Sky Real Lives budget to Sky 1 and 2.

http://www.broadcastnow.co.uk/news/sky-axes-real-lives-to-beef-up-sky-1-and-2/5015071.article

If Sky can make Sky 1 and Sky 2 a version of HBO, Showtime or quality cable then the have a fighting chance of winning audiences and getting back into payTV. The programmes provided have to be quality especially going up against similar FTA channels, Sky 1 and Sky 2 need to be competing heavily with BBC 1 and ITV1 in terms of Drama, Comedy and other home produced programming. Why they want to buy VMTV when they are closing Real Lives makes no real sense.

Minstrel27

I have a feeling that they are closing them as a result of acquiring VMTV. Throw all the Real Lives stuff onto Living

Elmo

Minstrel27 wrote: »

I have a feeling that they are closing them as a result of acquiring VMTV. Throw all the Real Lives stuff onto Living

True Real Lives would work well on Living. However I still think that Sky need to improve their basic channels if they are that fearful of Freeview and Freesat. Sky can't just continue to rely on Sports and Movies.

I wonder if UPC will gain access to Sky HD set of channels.