Virgin under Liberty will avoid BSkyB UK rights battle

LONDON Wed Feb 6, 2013 9:09am EST

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LONDON (Reuters) - Virgin Media will steer clear of a fresh battle with Rupert Murdoch's BSkyB over expensive content like England's Premier League soccer under the ownership of Liberty Global, the U.S. company said.

Billionaire John Malone's Liberty Global agreed to buy Virgin Media late on Tuesday for about $15.75 billion in stock and cash, pitting Malone against his old rival Murdoch in the British pay-TV and broadband market.

Virgin Media, which has 4.9 million customers against BSkyB's 10.7 million, was formed by a merger of cable groups Telewest and NTL and mobile telecoms operator Virgin Mobile in 2006. The merger was led by Virgin Group's Richard Branson, who still owns around 3 percent.

Virgin Media's first few years were marred by lengthy and costly legal fights with BSkyB over access to channels and content.

More recently, however, chief executive Neil Berkett has stabilized the group. In a peace deal with Sky in 2010, it sold Sky a package of channels and offered some of Sky's high definition channels to its own customers. Since then, Virgin has increasingly focused on selling high-speed broadband.

Mike Fries, Liberty Global's chief executive and president, said Britain's pay-TV and broadband markets were now "rational", and he would not risk that stability by engaging in new bidding wars with BSkyB.

"Neil's done a great job with building a strong relationship with Sky that is not based on personalities or drama," he told reporters on a conference call on Wednesday.

"The result of that relationship is a strong commitment to share content and make sure Virgin has access to the important premium programming in the marketplace."

"We do not see any reason why that would change or any reason why Virgin Media needs to compete with Sky for that premium content."

Fries said Liberty Global would not launch a major expansion of Virgin's cable network, but it would continue to invest in increasing broadband speeds.

Berkett said he would step down once the deal was complete. "My preference is to step down at closure," he said. "I'm not a very good number two."

(Editing by Rosalba O'Brien)

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