Sunday Times: Virgin Media to sell stake in UKTV
BigFoot87
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http://www.marketwatch.com/story/virgin-media-to-sell-stake-in-uktv-report-2010-08-08?siteid=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20marketwatch%2Ffinancial%20%28MarketWatch.com%20-%20Financial%20Services%20Industry%20News%29
LONDON (MarketWatch) -- Virgin Media Inc. is selling its stake in the digital broadcasting business that it owns with the BBC, in a deal valued at at least GBP350 million, the Sunday Times reports without citing sources.
The business, called UKTV, consists of 10 channels. Proceeds will be used to pay down debt, according to the newspaper.
UBS and Goldman Sachs will begin looking for potential buyers in the coming weeks, the report adds.
Virgin Media representatives couldn't be immediately reached for comment.
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It says BBC Worldwide is regarded as the "frontrunner" to acquire the stake (it already owns the other 50%).
It seems like a conflict of interest, and a threat to the licecne fee.
Who knows? BBCW, and UKTV, are not subsidised by the licence fee, but profit they make goes back to the BBC.
If they can allow BBCW to own 50% then why object to 100%?
If UKTV and its channels disappeared then someone would buy the rights to repeat those shows. The BBC would still make that income, just not the profit of running the channels.
Of course the clause that the other partner, VM at the moment, is responsable for all of any losses incurred would vanish. BBCW would then be liable for any losses should UKTV make any. Being a limited liability there is no chance that they could drag BBCW and the BBC down with huge losses. If they suddenly lost billions then BBCW could just walk away.
Also BBCWW is starting to provide funding shows with the BBC, would for example a BBC 4 / Yesterday production be allowed? Seems to me that BBC 4 would be using money from advertising to fund the show.
I dont think this is an evil plan by the BBC, but it should not be seen to be taking money from the advertising pot. BBCWW is just not that far removed from the BBC.
ITV would be the best broadcaster in this case. they have their own extensive archive that could be used quite effectively on a 'gold' type channel.
Slightly OT but if ITV had a part ownership of BBC worldwide. It might encourage them to produce higher quality productions that are exportable overseas. They lack the infrastructure at the moment to exibit their content worldwide.
it could help them, Primeval shows that it can be done.
But they are not primarily funded by ads, they receive money via the subscriptions charges that Sky make.
And in essence, the whole setup would be little different from the way that overseas collaborations are set up and produced.
Anyway, I understood that BBCWW already had first refusal on any stake sale, and that it also had final say as regards who buys any stake (so as to keep the aims & ideals of the BBC).
With that in mind, which other broadcaster/media groups would make acceptable partners?
I am thinking this wont attract international bidders
What about any of the existing US/Canadian outfits that already are in partnership with BBCWW on other TV productions?
If HBO had not signed that deal with Sky, I might have said them.
PBS, does not seem to match what I know about them, depsite them working with the BBC a fair amount.
The previous government were keen for C4 to get involved with BBC WW, so I think the only way BBC WW would step aside to allow C4 to buy it would be because it has been ordered from very high up.
Why? They do not run the channels, make a pittance from them each year (a few million pounds), and pretty much have no involvement in the channels whatsoever. They are completely run by BBC WW. The resctrictive ownership clauses held by BBC WW mean UKTV could not be considered a strategic investment as they have virtually no say over who they could sell their share to or how the channels could be used to further their own gains (ie. as bargaining chips in negotiations with Sky or as exclusives to their own platform).
If anything, VMTV could at least have been considered a strategic investment in that sense - they had full control over some valuable TV property.
Rightly or wrongly, VM say they have no interest in owning content any more so UKTV has to go.
Five has just been sold for £100m, before that VMTV was sold to BSkyB for £160m.
How on earth could a 50% stake in UKTV be worth so much in comparison?
Five has a 6.1% viewing share across 5 channels.
Virgin had a 2.6% viewing share across 11 channels.
UKTV has a 4.3% viewing share across 18 channels.
Obviously both Virgin and UKTV benefit from having a secondary revenue source that Five currently does not have (pay TV in addition to ad revenue) but I still don't see how a 50% stake in UKTV could be worth so much more than Virgin as a whole.
Also UK TV is a group of channels as much as anything else, why would Starz want some UK TV channels?
So really then, it's C4 or BBCWW (unless there is *cough* pressure applied from Government circles for another broadcaster to be allowed consideration *cough*
Going back a bit, I do think it wrong that the BBC could keep 100% of the profits generated by a free to air ad supported channel like Dave. I am amazed that ITV is not making this point, as it would be a case of the BBC making money from advertising.
I know many here want East Enders axed, but would settle for the licene fee no longer paying for it, would we really all be happy if EE became ad funded on a BBC WW free to air channel?
Gets a bit complicated when Dave buys in stuff from other broadcasters such as Five (soon to be Channel five) such as Fifth Gear, The Gadget Show, thus assisting their profits, and when it financed part of the cost for Primeval, whilst not having first or maybe even second refusal on it
Both channel are fine, but the BBC really should not be so quick to give the impression it runs ad funded channels, that compete with the other free to air boradcasters for advertising.
Dave airing The Gadget Show could be spun as "BBC profits from the TV shows of other channels"