Sky Sports continues on Virgin Media, but BT struggling to reach agreement with Sky

Interesting piece on MediaGuardian

Virgin Media has secured the Sky Sports channels for the coming year, piling further pressure on BT to do a deal with the satellite broadcaster before the next football season begins in August. 

Virgin Media's agreement to carry Sky Sports 1 and 2 was negotiated in 2010 and due to expire this summer, but it is now expected to extend into next year. "We have surity through 2013," Virgin Media chief executive Neil Berkett said. "I'm comfortable with where we are in terms of continuity and surity of supply." 

By contrast, BT is struggling to agree terms to carry Sky's two main sports channels on its flagship YouView service.  BT has a deal until 2016 to carry Sky Sports 1 and 2 on its BT Vision box, but that service is being phased out in favour of YouView. 

In a sign of how telecoms and content are converging, it is thought Virgin and Sky have traded football for fibre-optic cables. Virgin announced Wednesday that it had struck a deal to rent its fibre 'backhaul' to the satellite group, helping carry internet traffic across its core network, although not as far as customers' homes, for which Sky still relies on BT. 

"I find it unbelievable that Virgin won't have a deal with Sky on the sports because they've just done a deal on backhaul and they'll all be connected," said Toby Syfret at Enders Analysis. "There is a better and better relationship between them helped by the aggressive stance taken by BT which it feels it has to attack Sky directly in the content area." 

Virgin is Sky's biggest wholesale customer, generating around 700,000 Sky Sports subscriptions, according to Enders.