BSkyB and Reuters in alliance of spacey

Reuters and British Sky Broadcasting yesterday formed an international television alliance aimed at building "a major new force in international news".

Under the agreement Sky News will retain editorial control of its output on the 24-hour news channel, while Reuters will supply and manage UK and global news gathering.

Sky News journalists and presenters are largely unaffacted; expected £10m savings a year for Sky will come from Reuters providing and managing editing facilities, camera crews and satellite feeds.

Reuters, which has been expanding into television and radio with mixed success, will also produce several programmes for Sky News. It has had a limited news supply deal with Sky since it started broadcasting more than five years ago.

BSkyB's chief executive, Sam Chisholm, said:"Reuters' enormous international infrastructure and facilities will provide a platform for the global expansion of Sky News."

Reuters' editor- in -chief, Mark Wood, said: "The agreement will lead to a significant increase in the news-gathering resources we now commit to Sky News and provides a new opportunity for us to develop our programme-making expertise."

The deal follows abortive negotiations with ITN and earlier soundings from the BBC. The BBC last year forged a strategic alliance with the Pearson media company to develop international satellite-delivered services, launching two for Europe last week.

Adam Boulton, Sky's political editor, said last night that staff had been told that most of the technical staff would be re-employed by Reuters.

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