Sky completes Virgin Media TV buy-out

UK satcaster BSkyB has completed its £160m (US$241.6m) acquisition of Virgin Media’s channels business, following the granting of regulatory approval in Ireland.

Sky now owns the Virgin Media TV (VMTV) channels bouquet, consisting of Living, LivingIt, Challenge, Challenge Jackpot, Bravo, Bravo 2 and Virgin 1, and has re-branded the networks as the Living TV Group. Virgin1 will also be rebranded, as Sky has not licensed the Virgin moniker.

The deal sees Sky paying Virgin £105m in cash, with another £55m payable if UK regulators give approval.

News Corp-backed Sky sees the acquisition as an opportunity to tighten its grip on the UK cabsat TV market by expanding its basic line-up and eliminating the carriage fee it previously paid to VMTV to air the networks.

Another element to the deal secures Virgin Media’s cable TV service wholesale carriage of Sky’s basic cable line-up, including Sky1 and Sky Arts, plus the newly acquired VMTV channels.

Virgin will also offer Sky’s basic cable HD channels, Sky Movies HD and Sky Sports 1 and Sky Sports 2 HD for an incremental fee. It was announced separately today that Virgin has also added Five HD and two time-shifted networks, Fiver +1 and Five USA +1, to its line-up.

The company is also looking forward to offering English Premier League soccer at reduced rates, following UK media regulator Ofcom’s ruling that Sky should lower the wholesale price it charges for Sky Sports 1 and Sky Sports 2.

Earlier this month, rival provider BT decided to offer both SSP1 and SSP2 for £16.99 per month, despite it potentially making a loss from its sports coverage as a result. Virgin offers the channels for £9 and £13.50 respectively, while Sky has increased its fee to £29 from £26, though its bundle includes others networks, including ESPN.