ClickAJob News

British Sky Broadcasting (BSkyB) has warned that its ongoing row with Virgin Media about the carriage of its basic channels could cost the group up to £20 million.

BSkyB says that it has conducted negotiations with its pay-TV rival in "good faith" in order to make Sky One, Sky Two, Sky Sports News and Sky News available to Virgin Media customers.

Last week Virgin Media, which was officially launched at the beginning of February following the merger of NTL, Telewest and Virgin Mobile, accused BSkyB of intentionally "stifling competition" by stalling on talks between the two groups.

But BSkyB today insisted that Virgin Media's recent behaviour appeared "at odds with a genuine desire to conclude a commercial agreement and at this time there exists the real possibility that agreement will not be reached before expiry of the current contract at midnight on February 28th".

"Unlike the open satellite platform, Virgin Media's cable network is closed. The only way Sky's channels can be available to cable viewers is if Virgin Media chooses to carry them," BSkyB said.

"As a consequence, Sky's basic channels would become unavailable to all Virgin Media customers for an indeterminate period of time," a company statement went on to say, adding that Virgin Media's stance could cost BSkyB between £15 million and £20 million in operating profit.

BSkyB's chief financial officer Jeremy Darroch said: "We are disappointed that Virgin Media appear to have walked away from negotiations.

"Sky offered more channels to Virgin Media than ever before. We have invested in developing our channel offering and sought a fair price which reflects that fact. With three days still to go before the deadline, we hope that Virgin Media will focus on getting a deal done rather than on their PR offensive."

Virgin and Sky fell out last year when the latter bought a significant stake in ITV despite the media group being in the middle of takeover negotiations for the commercial broadcaster.