British Sky Broadcasting (BSkyB) announced a deal to buy Virgin Media’s TV channels for 160 million pounds ($232M). BSkyB is 38% owned by News Corporation.
Under the deal announced Friday, BSkyB will pay Virgin 105 million pounds at closing and the remainder “following the regulatory process.” The agreement also provides for BSkyB’s existing basic channels to be carried on Virgin Media’s cable TV systems, along with Virgin having access to BSkyB content for VOD and Internet delivery.
The channels (collectively called VMtv) being acquired by BSkyB include LIVING, LIVINGit, Challenge, Challenge Jackpot, Bravo, Bravo 2 and Virgin 1 (which will be getting a new name). BSkyB will take over ad sales for the VMtv channels as of January 2011.
“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,” said BSkyB CEO Jeremy Darroch.
Neil Berkett, CEO, Virgin Media, 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.”