Called it
Respect to The Guardian on this one: it reported BSkyB was going to buy Virgin Media's TV channels over a week ago and today the two companies confirmed the deal.
Sky will acquire VMtv, which produces the LIVING, LIVINGit, Challenge, Challenge Jackpot, Bravo, Bravo 2 and Virgin1 channels for £160 million and add them to its basic package. It won't license the Virgin brand, so Virgin1 will have to be called something else. Sky will take over ad sales on the VMtv channels from next year.
On top of the cash, Virgin also gets certain Sky channel distribution deals in return. It will be able to broadcast the full basic Sky package and will have the option of carrying any of its basic HD channels. Virgin will also be able to offer some Sky premium stuff through its on-demand TV service as well a some Internet TV options, including ‘red button' content.
"VMtv is an attractive investment opportunity which complements our existing content business and delivers strategic and financial benefits," said Jeremy Darroch, BSkyB CEO. "We are pleased that, through commercial negotiation, we have been able to ensure wide distribution of our channels to a growing pay TV universe."
"The sale of our channels business has generated substantial value," said Virgin Media CEO Neil Berkett. "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."
In other words: Virgin Media needed the cash.
