Blighty’s biggest paybox just got bigger. Following months of speculation, News Corp. satcaster BSkyB has paid some £160 million ($232 million) for cabler Virgin Media Television.
The takeover, much anticipated as British TV undergoes further consolidation driven by competitive and financial pressures, involves a complex deal that gives BSkyB seven channels, including Living, plus new carriage arrangements for some basic pay Sky webs on Virgin Media.
BSkyB CEO Jeremy Darroch hailed the purchase of Virgin Media Television as “an attractive investment opportunity which complements our existing content business and delivers strategic and financial benefits.”
The deal is subject to regulatory approval. While it will inevitably attract criticism from those concerned about the market power of Rupert Murdoch’s BSkyB, the Virgin webs’ collective audience share is not large.
BSkyB will not license the Virgin brand, which means a new identity for the web in due course.
The satcaster will pay up to $232 million in cash, with $153 million due on completion, and the remainder paid following the regulatory process.
BSkyB hopes that having more basic TV channels will help maintain and grow its subscriber base. It will also save money because it no longer has to pay Virgin Media for distributing the channels.
The new carriage deal gives Virgin for the first time the option of carrying any of Sky’s basic HD channels — Sky Sports HD 1 and Sky Sports HD 2, and all Sky Movies HD channels.
Virgin will also be able to offer subscribers content from Sky’s basic and premium channels.