TV & PVR Blog by XtendedPlay

Satellite television operator BSkyB has acquired a significant stake in ITV. It is a typically bold strategic move that could inhibit a bid by rival cable company NTL for the leading commercial television network in the United Kingdom.

BSkyB spent £940 million paying 135 pence per share to acquire a 17.9% stake in the commercial network without the knowledge of the ITV board of directors.

Their announcement after trading came as a surprise to most of the city and no doubt a shock to NTL.

The amount paid was a considerable premium over the prevailing share price, which closed the day at just over 115 pence. For investment houses like Fidelity that have been unimpressed by the performance of ITV, the offer was too good to refuse.

The satellite television operator said it would not make an offer for the remaining shares but said it would be a supportive shareholder. Under cross-media ownership rules in the Communications Act, News Corporation controlled BSkyB is prohibited from having an interest of more than 19.9% in ITV plc.

In a statement the company said: “BSkyB wishes to explore options to create value in the interests of both BSkyB’s and ITV’s shareholders. BSkyB believes that ITV is one of Europe’s premier broadcasting and production businesses, and holds substantial potential for long-term value creation.”

Briefing analysts, BSkyB chief executive James Murdoch said “Our investment is a long term and supportive shareholding in ITV. It reflects our belief that ITV’s decline has been overstated. We realise that ITV has been going through tough times but with careful stewardship it can return to form.”

The apparently charitable offer may also be seen as a ploy to frustrate rival NTL Telewest, coming a week after the cable company approached ITV about a potential merger.

While many analysts and commentators initially failed to see the business logic behind the cable and broadband operator merging with the leading commercial broadcaster in the country under the Virgin brand, the competitive threat was clearly not lost on Sky.

Sky has also been investing in broadband and remains a partner in the Freeview digital terrestrial platform.

This pre-emptive intervention by Sky makes it more difficult for anyone to complete a takeover of ITV, although Richard Branson and NTL could appeal to regulatory authorities over the move.

Source: http://www.dtg.org.uk/

Sky Sports is to launch a second high-definition television channel. Sky Sports HD2 will be broadcast on Sky HD channel 409 from July 31, alongside Sky Sports HD1 which launched with the initial Sky HD channel portfolio in May.

Sky Sports HD2 will carry a full day’s schedule from one of the Sky Sports channels.

Sky said all live Barclays Premiership matches, Coca-Cola League games, selected matches from the UEFA Champions League, FA Cup, Carling Cup and European Championship qualifiers plus Guinness Premiership Rugby union, domestic county and international cricket were now produced in HD. The 2006 Ryder Cup will also be live in Sky HD.

BSkyB installed 2,500 Sky HD set-top boxes on launch day but was forced to delay some of the 40,000 advanced orders due to supply problems. “We ordered more than enough boxes to meet demand and we’re ready to install them but they’re not arriving from our supplier as fast as we agreed,” a Sky spokesman told Lovelace Consulting at the time.

Sky HD costs £10 per month in addition to a Sky digital subscription (currently priced between £15 and £42.50 per month). Subscribers will also pay £299 for a set-top box that incorporates a 160GB hard drive, allowing them to record 30 hours of high-definition programmes or 80 hours of standard definition content using the full functionality of Sky+.

Other channels available on Sky HD include Sky One HD, two Sky Movies HD screens, Sky Box Office HD, Artsworld HD, Discovery HD and National Geographic HD, plus the BBC’s trial HD channel.

Source: http://www.dtg.org.uk/