[Gavin-D]

And for those without the broadcast now subscripition here's the full artical,

Scripps Networks Interactive is on the verge of buying Virgin Media’s 50% stake in UKTV, and the British broadcaster is preparing to follow the deal by launching a VoD player.

Ten months after it was first linked to the broadcaster, and after more than six months of negotiations, Scripps’ acquisition is “all but done”, according to one UKTV insider. An announcement is expected imminently.

The two largest barriers to a deal - UKTV’s new 10-year advertising sales deal with Channel 4 and the lack of non-linear programming rights for BBC Worldwide content - are understood to have been navigated, paving the way for Scripps’ estimated £350m buyout.

One executive said the deal made good sense for both parties. “Scripps has a small international presence that it has tried until now to grow organically, and the deal will add real ballast overnight. BBCW is a content company and has far more shared goals with a company like Scripps than a platform operator like Virgin Media.”

Problematic delay

Negotiations between Virgin Media and Scripps slowed when C4 took on the sales contract for UKTV on 1 January this year. C4 was asked to estimate the revenues it would generate almost immediately, but was reluctant to provide a figure while the new arrangement was in its infancy.

That delay was problematic, and there are suggestions that BSkyB used it to re-pitch for the UKTV sales account, but sources indicated it was never likely to be an obstacle that could kill the deal.

“The market improved and it was not an issue, but they needed something to help them pin the multiple on,” one source said.

Another factor in the deal was whether BBCW would grant VoD rights. Several sources indicated an agreement is now in place, and that UKTV is “well down the line” with plans to launch an on-demand player before the end of the year.

Former BBC Vision controller of multiplatform and portfolio Simon Nelson is understood to have been drafted in to help UKTV work on the project, although he declined to comment.

The player is likely to launch via the UKTV website, as well as via Virgin Media’s cable-based TV on Demand service and website.

“UKTV certainly has ambitions to develop an on-demand business across both TV and PC,” one source said. The planned service would not be as vast as a “BBC iPlayer archive” and would be “carefully editorially curated”.

It is thought it would offer BBC archive content, original UKTV commissions and acquisitions, and US programming from Scripps.

One issue to be resolved is how the VoD player reflects UKTV straddling both the pay and free-to-air markets. Content from free-to-air channels Dave, Really and Yesterday could sit on an ad-funded player, but Sky and Virgin Media may have concerns about shows from UKTV’s pay channels being available on that basis.

The Scripps deal could also usher in a restructure or staff recruitment drive at UKTV. Recent senior departures include Matthew Littleford, Richard Kings bury and Jane Mote, and it is thought chief executive Darren Childs will now decide whether to replace them directly or reorganise the business.

UKTV, Scripps, Virgin Media and BBCW all declined to comment.