And on that bombshell… Virgin sells its UKTV stake

Virgin Media has sold its joint stake in UKTV, home to ten channels including Dave and Gold, for £239 million as it looks to shift away from content production.

The deal will see New York-listed Scripps Networks also pay some £100m to acquire the outstanding preference shares and debt owed by UKTV to Virgin.

UKTV was formed in 1997 and attracts about 36 million viewers a month across its portfolio of lifestyle, entertainment and non-fiction programming channels, which also include Good Food, Alibi, Eden and Yesterday. The other 50 per cent of UKTV is held by BBC Worldwide, the commercial arm of the public broadcaster.

Dave has become a major hit on Freeview, Sky and cable with its mix of stand-up comedy, quiz shows and motoring programmes, including re-runs of Top Gear.

For Virgin Media, the disposal fits with its strategy of focusing more on providing high-speed broadband and technology to access content, instead of producing the content itself.

Neil Berkett, Virgin Media’s chief executive, said: “We are pleased to have reached this agreement with Scripps. This will allow us to continue to focus on providing a transformative experience for our customers by developing our core strategic strength – the UK’s leading digital network – alongside our leading entertainment services.”

Scripps Networks’ media portfolio includes US lifestyle TV and internet brands HGTV, Food Network, Travel Channel, Cooking Channel and country music network Great American Country.

Chairman, president and chief executive Kenneth Lowe said: “UKTV is a significant opportunity for Scripps Networks Interactive to participate in a thriving multi-channel, dual revenue stream media business in one of the world’s largest television markets.”

As part of the deal, talks are taking place that could lead to BBC Worldwide increasing its shareholding from 50 per cent to a maximum of 60 per cent. Scripps said its existing voting rights and board representation would be unaffected by the proposed arrangement.

BBC Worldwide is a wholly-owned subsidiary of the public broadcaster and, in the past financial year, generated profits of £160m on sales of about £1.2 billion. It returned £182m to the BBC.

John Smith, chief executive of BBC Worldwide, said: “The launch of UKTV in 1997 created a new secondary platform for content from the BBC and UK independents that has delivered great value back to all stakeholders. We thank Virgin Media for the part it has played in developing the business into one of the most successful pay-TV companies in the UK.”

Last month, Virgin Media announced a new, larger-than-expected £850m share buy-back and debt repayment programme and said it was on track to meet its debt targets.