BSkyB, Virgin settle dispute

U.K. pay TV rivals sign two package deals

U.K. paybox BSkyB has resolved its 18-month long dispute with cabler Virgin Media after signing two carriage deals that will see BSkyB channels return to Virgin.

The pair have also agreed to drop legal proceedings against each other in the London High Court.

Sky1, the operator’s flagship entertainment web, Sky News and Sky Sports News will be available to Virgin Media subscribers beginning Nov. 13.

The second agreement involves a new deal for Virgin’s basic channel packages and will see channels such as Living, Bravo, Trouble, Challenge and Virgin 1 continue to air on Sky.

The deals will run until June 12, 2011.

Financial terms have not been disclosed, although the deals include fixed annual carriage fees for the channels, with both parties able to secure additional payments if their channels meet certain performance targets.

BSkyB removed the channels, including Sky One, from Virgin Media in March last year after a spat over carriage fees.

Virgin subsequently filed court proceedings. It claimed the satcaster was abusing its dominant position in the U.K. pay TV market and had charged “onerous” rates for distributing the cable company’s channels on BSkyB.

The return of Sky One, which airs premium U.S. fare like “Lost” and “The Simpsons,” to the Virgin platform will provide a much-needed boost for the channel, which lost more than 3.6 million homes, around a third of its audience, when it was removed from Virgin.

This was reckoned to have cost BSkyB about £25 million ($40.3 million) a year in lost sales.

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