BSkyB Buys VMtv

LONDON: Virgin Media has agreed to sell Virgin Media Television (VMtv) to BSkyB for £160 million ($234 million), which includes the acquisition of LIVING, Bravo and Virgin1.

Also included in the deal are LIVINGit, Challenge, Challenge Jackpot and Bravo 2. Sky will not license the Virgin brand and will announce the new channel brand for Virgin1 at a later time. The acquisition expands Sky’s portfolio of basic pay-TV channels and eliminates the carriage fees it currently pays for distributing VMtv channels on its TV services. Sky will be responsible for selling ads on the newly acquired channels as of January 2011.

The two companies have also struck a number of carriage agreements for certain Sky standard- and high-definition channels. These agreements secure wholesale distribution of Sky’s basic channel lineup, including Sky1 and Sky Arts, as well as the acquired VMtv channels, on Virgin’s cable service. For a fee, Virgin Media will 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. Virgin will additionally make a range of programming from Sky’s basic and premium channels available through its on-demand service.

Jeremy Darroch, the CEO 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.”

Neil Berkett, the CEO 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."