Sky may be forced on ITV stake issue
Monday, April 30th, 2007Regulators to make Sky give up the goods?
Sky could be forced to cough up a portion of, or all of the 17.9% ITV stake, after Ofcom and the Office of Fair Trading have both stated that the move, widely regarded as a cynical move to curb the expansion of NTL/Virgin Media, is anticompetitive.
Ofcom said that ownership of a controlling share in the terrestrial channel represented a number of “public interest issues in relation to sufficient plurality of news provision for both cross media and television news in the UK,” with the OFT echoing this sentiment saying that the purchase could “result in a substantial lessening of competition.”
These announcements come pending the Ofcom investigation of Sky and the rest of the pay-TV market, and just after Virgin Media submitted their case to the High Court, regarding the Sky/Virgin dispute over carriage fees, potentially adding more wood to the Virgin bonfire.
These are testing times for the satellite broadcaster, who has seemingly run into opposition from all sides in the last six months. Firstly the swoop-purchase of the ITV stake last year which prompted these comments was followed by Sky’s announcement of plans to replace its Freeview channels with pay-per-view content, which prompted its competitors – BT, Top-Up TV, Setanta and Virgin – to submit a joint plea to Ofcom, which was followed by the withdrawal of some of its channels from the Virgin cable platform as a result of the dispute mentioned above.
Despite this, Sky viewing figures continue to grow, although this may be a result of Virgin Media customer migration.
The worst-possible outcome for Sky is that a relinquished grasp on ITV would leave another buyer, potentially Virgin, free to steam in and make for a bid – a rejuvenated terrestrial TV platform would pose a direct threat to the appeal of Sky’s pay-TV package.
