Neil Berkett, the acting chief executive of Virgin Media, yesterday cast doubt on the prospects of a future bid for ITV — warning that he believed a traditional commercial broadcaster faced too much financial pressure.
Speculation about the future of ITV has resurfaced after Sky was told it had to slash its shareholding to 7.5 per cent last month. Virgin Media has the most firepower because it is sitting on a tax asset that allows it to offset ITV’s tax bill against its past losses.
“If you let tax determine your strategy that would be sad,” Mr Berkett told the Broadcasting Press Guild yesterday lunchtime. “Our ITV bid [in 2006] was at a moment in time...the market is very different today”.
The Virgin boss was careful not to close the door absolutely, but he emphasised that he believed the company’s priority was in developing the company’s broadband offer — to support growing consumer interest in subscription video on demand.
Asked whether he thought ITV could whether an economic downturn, he said: “If my business model was 80 per cent based on linear television, I’d be concerned.”
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Mr Berkett, previously the company’s chief operating officer, was not a key figure in the abortive ITV bid — the process was largely driven by Jim Mooney, the chairman and Malcolm Wall, head of content. Their approach was frustrated by Sky’s seizure of 18 per cent of ITV in November 2006. Sky is 39.1 per cent owned by News Corporation.
Neil Berkett, a native of New Zealand, has been acting as chief executive since the departure of Steve Burch in August of last year. Mr Berkett said he could give no timescale on when a permanent appointment might be made, although he has repeatedly indicated his keenness to take on the job full time.
Virgin Media plans to make 50 megabit broadband available to almost all its customers in the next 12 months, and he said he hoped to sign up “hundreds of thousands” of customers in “not many years”. The aim is to offer speeds that no provider using the BT network can, giving Virgin Media a source of competitive advantage.
Berkett said that he believed the new broadband first focus would provide what he described as “mid to high single digit customer growth,” ending a long period of almost no subscriber growth.