Murdoch backs Virgin takeover

[BGonaSTICK]

BSkyB chief executive James Murdoch has said a takeover of Virgin Media could mean a new management team would "engage in a more real way" to reach agreement over returning channels such as Sky One and Sky News to cable TV homes.

Sky's basic channels, including Sky One and Sky News, have not been available in Virgin Media's 3.3m cable homes since the beginning of March, when the two companies failed to strike a deal over carriage fees.

Mr Murdoch made the comments about a possible Virgin Media takeover today as Sky published a three-month trading update that saw the satellite company surpass most analyst forecasts.

"We have been trying to engage with Virgin's management over a resolution for our basics channels ... [we are] ready to meet in the middle," he said, in response to a question about the potential takeover of Virgin Media by Carlyle and the status of the carriage deal talks.

"Perhaps new leadership would engage in a more real way. We would like to have a more productive relationship with current management ... but if it takes new management, so be it," Mr Murdoch added.

He said that Sky "remained hopeful" of striking a deal to get its basic channels back on Virgin Media's cable TV network, but that there had been "no meaningful response" to the last offer the company made.

Sky claims this would have meant a like-for-like increase of just 6% in the cost of carrying its basic channels.

Mr Murdoch was also asked about the impact of new pay-TV services offering Premiership football from Setanta and BT Vision on Sky's business.

He said that Sky "hadn't seen any effect on customer growth", although he admitted that it was early days for these services so it "remained to be seen over the next couple of quarters" what impact there would be.

"Our position in respect to sports is that is has never been stronger," he added, in response to a query over Setanta's bid to muscle in on live Premiership football coverage.

"In respect to BT Vision it is pretty early days," he said.

Mr Murdoch argued that overall Setanta offered "less games for more money" than Sky provided.