...Media Guardian H/W...

Virgin bid for ITV was 'a moment in time'

The acting Virgin Media chief executive, Neil Berkett, today described its attempt to buy ITV as "a moment in time", apparently quashing any chance that it might revisit the scheme.
The cable company approached ITV about a potential takeover in November 2006 only to see its plan thwarted by satellite rival BSkyB, which bought a 17.9% stake in the producer and broadcaster.
"The bid for ITV was a moment in time, which was a view of the apparent value of the asset, a view of what Virgin Media could do with that asset and a view of potentially monetising some of our tax position," Berkett said today at a Broadcasting Press Guild lunch.
"The market is completely different today to what it was then and for us to reconsider anything in the acquisition of a production [company], an ITV lookalike, we would have to view it on its merits. But I'm not commenting on our M&A [merger and acquisitions] activity."
He added: "If you look at any organisation they will take their strategy and they will look at the assets that become available in the context of that strategy and the context of the time."
Berkett also cast doubt on the wisdom of Sky's move, which looks set to be unravelled at a potential cost of £250m, after the government told the satellite broadcaster to sell down its ITV stake.
He added: "The flipside is was it sensible for somebody else to acquire 18% of ITV? Was that part of their strategy? Does that mean they don't have a clearly defined position?"
Berkett added that Virgin was now focusing on emphasising the technical superiority of its broadband offering, which it is starting to make available at super-fast speeds of 50Mb.
He described broadband as Virgin's "hero product" alongside the rest of its quad-play offering of TV, fixed-line telephony and mobile.
Berkett said Virgin was concentrating on "mid-range" customers rather than taking on Sky at the premium end of the market for exclusive TV rights to sport or films.
"That happens to be where the profit pool is growing," he said. "In premium TV we don't have an advantage and the profit pool is stagnating."
The company would not be investing in premium content such as sports rights, Berkett added.
"Unless there's a change in the regulatory landscape, you won't see us put shareholder capital in premium content, although I happen to think there should be a change in the regulatory landscape," he said.
Despite the failed ITV bid, the company retains an interest in TV programming through owning Virgin Media TV, formerly Flextech, which operates channels including Living TV and a 50% share of UKTV, a joint venture with BBC Worldwide.
Berkett also pointed to other content ventures such as Virgin's collaboration with Setanta and ITN to set up a sports news channel to rival Sky Sports News.
"The biggest mistake we could make in broadband would be to become a utility and therefore how we ensure we are not just a pipe is absolutely critical in evolving the strategy," he said. "Content control and content in some shape or form has to be a critical component of that."
Berkett has been acting as chief executive since August, when Steve Burch left Virgin.
He said it was for the board decide who the permanent replacement would be, adding that he would like to continue as chief executive.