Virgin Media and Sky Sports Deal

Virgin Media and Sky Sports have extended their deal for a further year.

The agreement for the Richard Branson company to carry Sky Sports 1 and 2 was set to run out this summer but has now been secured for another 12 months, it has been reported. The deal places additional pressure on BT to sign a similar deal ahead of the new football season in August.

Neil Berkett, chief executive of Virgin Media, said the company has surety through 2013 and he is comfortable with where they are in terms of continuity.

Contrastingly, BT has struggled to agree terms to carry Sky Sports on its YouView service. But it is determined to take on Sky’s football dominance. It is paying the Premier League £738 million for rights to show 38 matches a year for three years. And dedicated sports channels will be launched this summer. There is a deal in place until 2016 for BT to carry Sky Sports 1 and 2 on the BT Vision service, but this is being phased out for YouView to take over.

TalkTalk also has a deal to carry Sky sports channels, leaving BT as the only leading pay TV service  to not have a deal with the satellite broadcaster.

But a BT spokesman did not seem to think this was a bad thing, saying: “We’re not really going after Sky sports customers.

“There are a lot of customers out there who are loyal to Sky and we’ll be looking to sell them our service as well.”

Virgin and Sky have also made a deal on fibre-optic cables. Virgin announced that it will rent the ‘backhaul’ to Sky to help carry internet traffic on the core network. But this would not extend to homes, with Sky still relying on BT lines.

One analyst said it would be “unbelievable” that Virgin and Sky Sports would not have a deal. Toby Syfret of Enders Analysis added: “There is a better and better relationship between them helped by the aggressive stance taken by BT which it feels it has to attack Sky directly in the content area.”

Virgin is the biggest wholesale customer that Sky has and generates around 700,000 Sky Sports subscriptions. The access began in June 2010 when Virgin ceased programme making and sold its remaining channels to Sky for £160 million. Virgin Media’s recent results, released this month, saw revenues rise 3.6% to just more than £1 billion in the first quarter of the year.

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