Sky offers compensation deals to media agencies

by Emma Barnett, Media Week 17-Jul-07, 10:30

LONDON - Sky could lose up to £10m in ad revenue after agreeing a range of deals with agencies to compensate for the loss of 3.3 million Virgin Media subcribers to its basic channels.

As well as some financial compensation, Sky is offering new sponsorship and advertising opportunities across a range of its properties, including its digital arm.
One agency head of television said: "They are complex deals, because the one thing Sky can't do is offer more airtime if it hasn't got it. Therefore, Sky is looking at all of its properties."

Media Week spoke to buyers who estimated that the negotiations could cost Sky anything from £6m to £10m. One said he was still in "delicate negotiations", but a number had concluded deals and said they were happy with the outcome.

A Sky spokesman said: "Sky has always been transparent about the implications of Virgin's decision to remove some of our channels from its network. We have an open and constructive dialogue with our agency partners and we always aim to help them get full value from the Sky schedule."
Despite the ongoing row with Virgin Media, Sky posted positive results last week, reporting an increase in its pay-TV customer base of 90,000 in the last year, to bring its total to 8.6 million.