Virgin Media has sold off its stake in UKTV, whose channels include Watch, Gold and Dave, following more than a year of speculation. The move marks the end of almost 15 years of the company owning television content.
Virgin announced yesterday it had sold its 50 per cent stake in the business to Scripps Networks Interactive, a broadcaster based in Tennessee, in a deal worth £239m. Scripps will also pay about £100m to buy the outstanding stock and debt UKTV owes to Virgin Media. This marks the culmination of Virgin's strategy to develop its infrastructure and concentrate on distribution rather than owning content.
Neil Berkett, Virgin chief executive, said: "This will allow us to continue to focus on providing a transformative experience for our customers by developing our core strategic strength – the UK's leading digital network."
A spokeswoman for the company said the strategy was about gaining access to content "but not owning it". She said the group would still pay hundreds of millions of pounds for content to be shown on its video-on-demand service as well as in carriage agreements.
UKTV was formed in 1997 between BBC Worldwide and Flextech, which would later become Virgin Media Television. It currently has about 36 million viewers a month across 10 lifestyle, entertainment and factual programming channels.
John Smith, the chief executive of BBC Worldwide, thanked Virgin "for the part it has played in developing the business into one of the most successful pay-TV companies in the UK".
Rumours Virgin was looking to offload its half of the joint venture with BBC Worldwide, the corporation's commercial arm, have circulated for about 18 months. The talk ratcheted up when Virgin sold a portfolio of channels, which included Bravo and Living, to its arch rival BSkyB in a deal worth £160m in June last year.
Virgin did not reveal its plans for the proceeds of the deal yesterday. Analysts speculated that the sum would be used to pay down its debt, or increase the share-buyback programme it announced in the second quarter.
Scripps, which specialises in lifestyle programming and owns channels including the DIY Network, has targeted the UK as a part of an expansion drive. Kenneth Lowe, the chairman and chief executive of the group, said the investment marked "a significant opportunity" for the group to participate "in a thriving multi-channel, dual-revenue-stream media business in one of the world's largest television markets".