UKTV channels on block

Virgin eyes programming unit sale

Virgin Media has appointed Goldman Sachs to advise on the sale of its programming division, which includes the wholly owned Living and Bravo channels and the bouquet of UKTV family channels it owns in a joint venture with the BBC.

The cable group is re-treading ground abandoned two years ago, when the then-branded NTL considered cashing out of the channels business.

The auction, which was later shelved, generated interest from such media ventures as Viacom, Disney, Sparrowhawk Media, News Corp. and ITV and valued the channels at a price tag of about £800 million ($1.6 billion).

But the plan was eventually ditched, in part because as part-owners of the six UKTV channels, the BBC has the power to veto any new buyer.

The cabler then faced bruising carriage renegotiations with satcaster BSkyB, resulting in significantly lower carriage fees for the channel portfolio.

"The problem that they faced then is the problem that they face now: All the value is in the UKTV channels and the BBC doesn't want to sell," one source familiar with the portfolio said. "They are going back to it because they have to as the channels are losing revenues every time they re-sign carriage deals with BSkyB."

Virgin Media bosses are being forced to consider a sale after the business revealed that fourth-quarter losses widened to $324 million last year.
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