Virgin snubs BSkyB peace deal
Virgin Media customers will remain without shows such as Lost and 24 after the cable group rebuffed a fresh attempt by BSkyB to end the acrimonious row over how much Sky charges for its basic channels.
The BSkyB chief executive, James Murdoch, wrote last week to his counterpart at Virgin Media, Steve Burch, suggesting the companies "meet in the middle", after Sky demanded nearly £10m more than Virgin was willing to pay for channels such as Sky One and Sky News.
Sky's final offer when the two sides were negotiating in February was around £40m a year for its channels, while Virgin refused to pay more than £30m.
Mr Murdoch proposed a deal pitched at around £35m as a "straightforward solution" to break the deadlock that has deprived Virgin's 3.4 million cable TV customers of Sky's basic channels since the beginning of March.
"As you will appreciate, this represents a significant ceding of value to Virgin Media on our part," Mr Murdoch wrote.
However, Mr Burch turned down the proposal, accusing Sky of withdrawing its channels from the cable platform after demanding "an extreme and anti-competitive price".
He said Sky's proposed reduction in the amount it would charge "does not make it fair or lawful nor does it promote good faith discussions".
Responding in a letter today, Mr Murdoch accused Virgin of failing to make a "meaningful engagement" with Sky's attempt to resolve the dispute.
"Disappointingly, we can only conclude that you are not genuinely interested in offering Sky's channels to your customers, preferring to continue to deny Sky access to your network as a means of pursuing wider corporate goals, simultaneously harming Sky commercially by denying us wholesale subscription and advertising revenues."
Sky said Virgin had tabled no offer for the channels since February 22, a week before the previous carriage deal ran out and Sky One and other services disappeared from the cable operator's network.
The dispute has been the most visible sign of the acrimony that has developed between the two companies since Sky bought a 17.9% stake in ITV in November, thwarting Virgin's plans to take over the commercial broadcaster.
Virgin has taken its complaint about Sky's carriage charges to the high court, accusing Sky of trying to weaken and ultimately eliminate it with anti-competitive behaviour.
But both sides have admitted the row is damaging them. Sky has forecast it will lose £60m a year in carriage fees and advertising revenues, while Virgin said last week it could lose TV customers in the second quarter of its financial year because of the dispute.
At the company's first quarter results last week, Mr Burch defended his decision to reject Sky's terms.
"When we looked at the cost of what they were asking and what they were demanding and the collective issues we had with Sky ... it was really the only decision we could make," he said.
"We are not cavalier about this - we are comfortable we made the right decision economically for the business and we believe in the long term we made the right decision for the customer."
Regards Satdude. :thum:
Virgin Media customers will remain without shows such as Lost and 24 after the cable group rebuffed a fresh attempt by BSkyB to end the acrimonious row over how much Sky charges for its basic channels.
The BSkyB chief executive, James Murdoch, wrote last week to his counterpart at Virgin Media, Steve Burch, suggesting the companies "meet in the middle", after Sky demanded nearly £10m more than Virgin was willing to pay for channels such as Sky One and Sky News.
Sky's final offer when the two sides were negotiating in February was around £40m a year for its channels, while Virgin refused to pay more than £30m.
Mr Murdoch proposed a deal pitched at around £35m as a "straightforward solution" to break the deadlock that has deprived Virgin's 3.4 million cable TV customers of Sky's basic channels since the beginning of March.
"As you will appreciate, this represents a significant ceding of value to Virgin Media on our part," Mr Murdoch wrote.
However, Mr Burch turned down the proposal, accusing Sky of withdrawing its channels from the cable platform after demanding "an extreme and anti-competitive price".
He said Sky's proposed reduction in the amount it would charge "does not make it fair or lawful nor does it promote good faith discussions".
Responding in a letter today, Mr Murdoch accused Virgin of failing to make a "meaningful engagement" with Sky's attempt to resolve the dispute.
"Disappointingly, we can only conclude that you are not genuinely interested in offering Sky's channels to your customers, preferring to continue to deny Sky access to your network as a means of pursuing wider corporate goals, simultaneously harming Sky commercially by denying us wholesale subscription and advertising revenues."
Sky said Virgin had tabled no offer for the channels since February 22, a week before the previous carriage deal ran out and Sky One and other services disappeared from the cable operator's network.
The dispute has been the most visible sign of the acrimony that has developed between the two companies since Sky bought a 17.9% stake in ITV in November, thwarting Virgin's plans to take over the commercial broadcaster.
Virgin has taken its complaint about Sky's carriage charges to the high court, accusing Sky of trying to weaken and ultimately eliminate it with anti-competitive behaviour.
But both sides have admitted the row is damaging them. Sky has forecast it will lose £60m a year in carriage fees and advertising revenues, while Virgin said last week it could lose TV customers in the second quarter of its financial year because of the dispute.
At the company's first quarter results last week, Mr Burch defended his decision to reject Sky's terms.
"When we looked at the cost of what they were asking and what they were demanding and the collective issues we had with Sky ... it was really the only decision we could make," he said.
"We are not cavalier about this - we are comfortable we made the right decision economically for the business and we believe in the long term we made the right decision for the customer."
Regards Satdude. :thum: