Tim Westcott: As Sky exits, RTL may be preparing an entrance

The failure of BSkyB's legal challenge against the ruling that it must sell down its stake in ITV is certainly a setback, but it has had plenty of time to limit the damage.

If BSkyB's initial aim was to block Virgin's takeover approach to ITV, then it was certainly successful. It must be said that ITV was not at the time a particularly willing suitor for the cable company and we may never know what threat a merged ITV/Virgin Media really would have posed.

Competition regulators were very clear that a scenario where BSkyB could potentially exert influence over ITV's decisions as a sizeable stakeholder was a no-go. One very pertinent discussion ITV management has been having recently is about whether to convert some or all of its digital channels to pay – which would never work without a favourable distribution deal with BSkyB.

At least ITV shares have rallied as the appeals process has taken its course, after the broadcaster's strong end to 2009. BSkyB has also had time to limit the damage by writing off part of the value of its ITV investment.

The question now will be: who will buy BSkyB's shares? The likeliest industry candidate remains RTL, which sees the UK as a key stepping-stone to the global English-language market. The Luxembourg-based giant has made no secret of its view that the UK free-to-air market needs to consolidate. Channel 4 was not interested in merging with RTL's Five (we will see whether the new management team has a rethink), leaving ITV as the only real possibility for RTL.

Tim Westcott is a senior TV analyst at Screen Digest