BSkyB and Virgin Media yesterday ended their lengthy high profile spat over Sky basic channel charges as the two groups announced a breakthrough agreement.
Virgin has signed a deal that will see Sky’s basic channels return to the cable channel for the first time since last February, when the charges row left fans of hit shows such as Lost and 24 stranded mid-series.
Both firms said that they had agreed to end all High Court proceedings against each other.
The deal will see Sky basic channels – including Sky1, Sky News and Sky Sports News – return to Virgin Media on November 13 under a contract running to June 2011.
The agreement will also allow Sky to have continued carriage of Virgin Media’s basic TV channels, such as Living and Bravo, also until June 2011.
Each will pay fixed annual carriage fees for the channels, with options to hike payments – up to a set limit – if their channels meet certain performance-related targets.
Neil Berkett, chief executive of Virgin Media, said: “We are pleased to bring our carriage negotiations with Sky to a successful close.
“I believe this agreement represents a fair deal and is the right thing for our customers.”
The groups had been locked in a fierce battle since early last year when the two failed to reach agreement on charges for Sky basics. A raft of viewers deserted Virgin Media after the withdrawal of the channels and the cable channel – formerly NTL – launched High Court proceedings against Sky in April.
The group accused Sky of stifling competition with inflated charges, claiming that Sky attempted to double the price for its basic channels in contract renewal negotiations.
Sky’s chief executive Jeremy Darroch said the agreement was “great news”.
“We want our channels to be enjoyed by as many people as possible so we’re delighted to secure their return to the Virgin Media platform,” he added.
Sky said at the time that all Virgin Media’s accusations were without foundation.
It previously claimed that it was asking Virgin for the equivalent of 3p per customer a day which it said was the same price as it cost to send a text message on Virgin mobile.
The basic channel dispute heightened an already contentious relationship between the two, with Sky’s controversial move to buy a 17.9% stake in ITV at the end of 2006 effectively scuppering the then NTL’s hopes of merging with ITV.