C4 wants Virgin Media’s UK channels

Chris Forrester

UK press reports suggest Channel 4 is interested in buying Virgin Media’s stake in the old Flextech bundle of channels. These include the ‘Trouble’ and ‘Bravo’ brands in Britain.

The reports say that First Round expressions of interest and bids for the channels are due this week, and over the past months a number of parties have reportedly expressed interest. The start of the sale process will bring to an end a considerable degree of speculation on the future for the Virgin’s wholly-owned channels, as well as Virgin Media’s UKTV bundle of channels where Virgin’s partner is the BBC through its BBC Worldwide commercial division.

In 2005 the value of the complete bundle (wholly-owned as well as the UKTV channels) was put at around £1bn. Today’s price is likely to be well down on that number.

Virgin Media’s own channel list is extraordinary, and contains some of the longest-lasting names in British television, including Living, Bravo, Challenge and Trouble. Virgin Media also has an ownership position in Setanta Sports News but it is not known whether this channel will be included in the sale. Then there are the company’s 50% stakes in the UKTV cluster (UKTV History, Dave, GOLD, Watch, Style, Food, Eden and Alibi).

Virgin Media values the broadcasting division at about £735m.

Besides Channel 4, other potential bids might come from BBC Worldwide itself, as well as other broadcasters and RTL’s name has been mentioned in the past. This past weekend it was reported that BSkyB might also be an interested party.