Living TV Group - Sale To BSkyB

Sale To BSkyB

On 7 April 2009, Virgin Media formally began the sale of its content operation, issuing a sales memorandum for its Virgin Media Television unit plus ad sales house IDS. It excluded its 50% stake in UKTV from the sale.

On 4 June 2010, British Sky Broadcasting and Virgin Media announced that they had reached an agreement for the acquisition by Sky of Virgin Media Television. The companies had, in parallel, agreed to enter into a number of agreements providing for the carriage of certain Sky standard and high-definition (HD) channels. Sky acquired VMtv for a total consideration of up to £160 million in cash, with £105 million paid on completion and the remainder paid following the regulatory process. The acquisition expanded Sky's portfolio of basic pay TV channels and eliminated the carriage fees it previously paid for distributing VMtv channels on its TV services. New carriage agreements secured wholesale distribution of Sky's basic channel line-up, including Sky1 and Sky Arts, and the VMtv channels, on Virgin Media's cable TV service. For an incremental wholesale fee, Virgin Media, for the first time, had 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 Media will make available through its on-demand TV service a range of content from Sky's basic and premium channels, including the VMtv channels. Virgin Media also gained access to red button interactive sports coverage and the opportunity to deliver selected standard definition programming over the internet. Sky would assume responsibility for selling advertising for the newly acquired VMtv channels from January 2011. Completion of the agreements was conditional on obtaining merger control clearance in the Republic of Ireland.

Virgin1 was also a part of the deal, but was rebranded as Channel One on 3 September 2010, as the Virgin name was not licensed to Sky. Virgin Media's stake in UKTV was not included in the deal.

On 29 June 2010, The Competition Authority in Ireland cleared the proposed transaction. The parties proceeded after the Minister for Enterprise, Trade and Innovation did not direct the Authority to carry out a full investigation within 10 days of the date of the Authority’s decision.

On 13 July 2010, British Sky Broadcasting and Virgin Media announced that Sky has completed the acquisition of Virgin Media Television (VMtv) following regulatory approval in the Republic of Ireland. VMtv was then renamed the Living TV Group. In completing the acquisition, Sky paid Virgin Media an initial £105 million. Up to an additional £55 million would be paid on UK regulatory clearance.

On 20 July 2010, The Office of Fair Trading announced that they would review BSkyB's acquisition of the Virgin Media Television business to judge whether it posed any competition concerns in the UK. The OFT planned to investigate the deal to see whether it could constitute a qualifying merger under the Enterprise Act 2002. The watchdog invited interested parties from the industry to comment on the sale, including its potential impact on the pay-TV market. On 14 September 2010, The OFT decided not to refer BSkyB's takeover of Virgin Media's TV channels to the Competition Commission.

Following the sale, BSkyB chose to integrate the Living TV Group into its own operations. This resulted in the closure of Bravo, Bravo 2, Challenge Jackpot on 1 January 2011 and Channel One on 1 February 2011. On 1 February 2011, Living, Livingit and Living Loves were rebranded as Sky Living, Sky Livingit and Sky Living Loves, while Challenge was added to Freeview, with the channels receiving a 25% boost to their programming budget. Fifty-two of the Living TV Group's 110 employees were made redundant as part of the process, including managing director - Johnny Webb, director of television - Claudia Rosencrantz and director of programmes for Channel One, Bravo and Challenge - Daniela Neumann. The integration process was completed at the end of January 2011.