Chris

Because Virgin Media is inept when it comes to these sorts of negotiations. A lot of people forget that when the whole 'Sky Basics' debacle kicked off a couple of years ago, that was round two of the battle. Round One was Sky's negotiators massively knocking down the price they paid for access to the channels Virgin then owned, on the basis of falling ratings - Sky said 'Less!' and VM just rolled over and took it.

Of course, it ultimately came back to bite Sky on the bum when they demanded a massive increase in the price they wanted to charge for access to their channels, on the basis of increased investment, never mind that those channels, like VM's, were suffering from falling ratings. This allowed VM to dig its heels in, cease carrying Sky One etc for a few weeks, and eventually get them back, complete with a renegotiated price for their own channels that more or less made the whole deal a cash-neutral swap.

Notwithstanding any of the above, VM's initial failure to secure a decent price for its channels was a disgrace and IMO offers some insight into the relative skill of their negotiators compared with Sky's. The world and his wife could see that VM was on a hiding to nothing if it didn't do anything to future-proof access to all the most popular linear content in Sky's stable. VM seems to have bet the farm on a future of on-demand access rather than linear broadcast TV - but do those same negotiators have the skill to ensure Sky does not simply hoover up all the on-demand rights as well?