Sky in Virgin talks to return channels

by Fiona Ramsay Media Week 04-Mar-08, 11:05

LONDON - Sky has publicly confirmed for the first time that it has restarted talks with Virgin Media over a deal to return Sky’s basic-tier channels to the cable platform.

Sky pulled its basic-tier channels, such as Sky One and Sky Sports News from Virgin Media in February 2007 after the two companies failed to agree on a price that the cable company should pay Sky.

A Sky spokesman said: “From the outset we have expressed a desire to get the channels back on cable.”
He said a deal could be successfully negotiated if the two sides could “reach a point with a sensible valuation of the channels”.

As part of the resumed talks, Virgin Media is pushing for a deal that also covers what Sky pays for its TV channels, such as Challenge.

Virgin Media renewed a carriage agreement last year for its channels, which was understood to be worth around £30m a year less compared with the previous contract.

However, a deal between the two companies could be some way off, with uncertainty surrounding the future of Virgin Media TV.

The company has appointed Goldman Sachs to consider the future of the business.
A sale could trigger interest from Sky, ITV and RTL Group, owner of Five, which bid in 2005 when Telewest tested the market for its Flextech channels.