Virgin sells TV channels to Sky as bitter rivals close in on peace deal

British Sky Broadcasting has agreed to pay its arch-rival Virgin Media £160m for a clutch of television channels in a deal that will be seen as further evidence of a rapprochement in the bitter row between the two companies over access to content.

The deal announced yesterday will see Sky buy its rival's Virgin Media Television subsidiary, best known for channels such as Bravo, Living and Virgin 1. The latter channel is to be rebranded under its new ownership.

In addition, Virgin will for the first time be able to offer its subscribers access to a number of Sky's high-definition channels, including Sky Sports HD 1 and the Sky Movies HD range. Virgin's existing deals to screen other Sky channels, including Sky 1, Sky News and Sky Arts, will be extended, and it will continue to provide access to the channels it is selling to Sky.

The move reflects Virgin's desire to concentrate on distribution rather than content, although it will retain its UK TV operation, a joint venture with BBC Worldwide that owns channels such as Dave.

Improving its HD channel range – it currently has 10 compared with Sky's 40 – will improve subscription rates, Virgin hopes, while Sky will save more than £30m a year on the fees it pays to transmit the Virgin Media channels it is buying.

Neil Berkett, the Virgin chief executive, said: "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."

As well as the Sky television content, Virgin will be able to transmit some of the channels' programming over the internet and to provide its customers with access to Sky's red button interactive service on Sky Sports. Jeremy Darroch, Mr Berkett's opposite number at Sky, added: "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 two companies have fought bitterly in the past over access to each other's channels, so yesterday's deal represents a move towards more peaceful relations.

However, Sky is still in the process of appealing against a ruling by Ofcom, the broadcasting regulator, that it must cut the prices it charges Virgin and others for premium channels such as Sky Sports. Virgin, BT and several smaller operators hope they will be able to compete more effectively with Sky for subscribers thanks to the Ofcom ruling.

Media analysts believe yesterday's deal could be the beginning of a new round of consolidation in the commercial television sector, as operators attempt to cut costs and exploit the opportunities that scale might give their advertising businesses.

In particular, speculation continues to surround Five, the terrestrial broadcaster which has effectively been put up for sale by its current owner, RTL of Germany. ITV, Channel Four and Sky have all been linked with a deal to buy the channel.

Sky's payment to Virgin will be staggered as the two companies await regulatory approval. It expects to hand over £105m within a month or so, once the Irish regulatory authorities clear the transaction, with the balance due once Britain's Office of Fair Trading gives the go-ahead.

Suggested Topics
ebookA unique anthology of reporting and analysis of a crucial period of history
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Accounts Payable

£12 - £15 per hour: Cameron Kennedy Recruitment: Excellent opportunity to join...

Technical BA - Banking - Bristol - £400pd

£400 per hour: Orgtel: Technical Business Analyst - Banking - Bristol - £400pd...

Account Management Strategy Manager

£38000 - £42000 per annum + competitive: Real Staffing: Required skills:Previo...

Business Analyst Consultant (Financial Services)

£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice