Virgin Media's head of content, Malcolm Wall, will leave the company next month, sparking reports that Virgin has opted to sell its entire content division, which includes its 50% stake in UKTV.
Following months of speculation about a sale, company sources tell The Times that the departure should be read as a clear signal of Virgin's intent to sell the division. Investors are reportedly insisting that the firm focus on its core broadband, phone and TV businesses, rather than pursuing programming.
A separate report in The Telegraph claims that Virgin Media's board agreed to sell the content division in a recent meeting in the US, and that UBS and Goldman Sachs are currently preparing for a sale. The formal sale process may not begin until after the government has issued a ruling about how to plug Channel 4's funding gap, as this may impact upon Virgin's UKTV stake.
Virgin Media's content division is worth an estimated GBP500m (USD707m). Its most valuable asset is its UKTV stake, which includes digital channels such as Gold and Dave and is valued at between GBP300m (USD424m) and GBP350m (USD495m). The division's other assets consist of Virgin Media Television, which owns TV channels such as Trouble, Challenge and Bravo, and Virgin's ad sales unit, IDS.
BSkyB is tipped as a possible bidder for UKTV. However, speculation emerged in January that Channel 4 may buy Virgin's stake. This could act as the basis of a partnership deal between Channel 4 and BBC Worldwide, the co-owner of UKTV, and could form the cornerstone of a plan to address Channel 4's estimated GBP150m (USD212m) funding shortfall.
Other potential bidders for the UKTV arm could be Five’s owner RTL and US broadcast giant NBCU.
Wall leaves Virgin after three years running its content business. He was formerly CEO of United Business Media (UBM) and has been linked with other high-profile roles in the past, including CEO of ITV and CEO of Setanta.
"Malcolm's long experience in broadcasting, combined with an acute understanding of the changes that are taking place in the industry, have helped steer our content business into the digital age," says Virgin Media's CEO Neil Berkett. "On behalf of Virgin Media, I wish him every success for the future."
Last month, Virgin Media reported a GBP241m net loss for Q4 2008 after slashing the value of its home-shopping business Sit-up. The results compare to a net loss of GBP163m for the same quarter last year and are blamed on currency losses arising from the strength of the euro and dollar against sterling.
StrategyEye's related categories: Broadcasters - Cable
StrategyEye's related companies: RTL, UKTV, Channel 4, Virgin Media, Virgin Group, BBC Worldwide, UBS
