BSkyB to buy VMTV for £160m

In a blow to the newly active Chairman and Chief Executive of ITV, the Competition
Commission have this morning definitively ruled that the CRR remedy, (which allows buyers
of advertising airtime to renew their existing contracts with ITV, with investment adjusted to
reflect the change in ITV1’s audience share), will be maintained for the foreseeable future.
The only concession that the Commission has made to ITV’s extensive lobbying is an
amendment to include viewers delivered by the ITV1+1 and ITV1HD channels.

Today's announcement that Sky have acquired the Virgin Media Channels (LIVING, LIVINGit, Challenge, Challenge Jackpot, Bravo, Bravo 2 and Virgin1) brings to a close one of the worst kept secrets in the media industry. The sale has been on the cards ever since it  became clear that Virgin's priority was to concentrate on building their cable platform business rather than producing and acquiring content for broadcast. Sky's position as the largest seller of multi-channel impacts is now consolidated, following the awarding of Viacom's sales contract to them last year. There are obvious synergies and efficiencies that can be implemented as a result of Sky's purchase and the deal makes sense for both parties. This announcement is almost certain to trigger the final round of TV saleshouse consolidation. IDS are now in an untenable position, having only the UKTV channels left to sell. Rumours persist that Channel 4 are close to securing this sales contract, although if legislation allows, Sky may take the opportunity to further strengthen their position. As the inevitable move towards 3 sales points gathers pace, that would then focus attention on Five. Their owners, RTL, have made it clear that offers for the channel would bewelcomed. Again, Channel 4 have been mentioned as potential suitors,but it would be no surprise to see ITV stake a claim in order to re-assert their position as the dominant TV saleshouse in the UK.  MediaCom believe this sale, and the further consolidation that will shortly follow, is inevitable. The falling price of TV advertising has led to widespread cost-cutting and these consolidations allow the TV companies to drive huge efficiencies. What is also certain isthat the need for powerful buying points has never been so important. This time last year there were 7 main TV buying points. This time next year it's virtually guaranteed there will be 3. The saleshouses will relish the opportunity to negotiate, safe in the knowledge that their size makes them virtually indispensable. In such a scenario GroupM's position as the largest buying point, with the greatest leverage, will be even more valuable in ensuring we can continue to drive value for clients in a consolidated market.