Branson set for £200m payday after Virgin Media sale
Analysts predict 'bloodbath' in UK pay-TV market as Murdoch rival acquires cable TV company
RICHARD BRANSON is in line for a £200m share of the £10.3bn sale of Virgin Media to Liberty Global, claims the Daily Mail. The entrepreneur, who is worth nearly £3bn, will trouser £67m in cash and take shares in the merged company worth nearly £135m. Although Branson does not have any direct control over the business, he earns £10m per year through allowing it to use the Virgin brand name.
Liberty Global's multi-billion-pound takeover of the company, agreed yesterday, will put it in control of the UK's second-largest pay television operator and in direct competition with market leader BSkyB, which is controlled by Rupert Murdoch's News Corp.
Liberty's chairman, the 71-year-old billionaire investor John Malone, is both a former rival and ex-business partner of Murdoch. Yesterday his son, former BSkyB chairman James Murdoch, shrugged off any threat to the British pay-TV company, telling the Daily Telegraph: "I don't think there's really a big change to the landscape there."
Analysts, however, are predicting a "bloodbath" in the cable market: "Liberty is an 800-pound gorilla and Murdoch is another 800-pound gorilla," Ovum analyst Adrian Drury told The Guardian. "The reality is this will be a straight bloodbath because the UK is an incredibly competitive market".
Liberty Global, which owns 11 cable companies in Europe, is set to retain the Virgin Media brand in the UK. Virgin Media's current chief executive Neil Berkett will leave the company with a windfall of around £41.5m, while his 6,800 staff are also expected to benefit from the deal, the Mail reports.
The merger will see around 2,500 Virgin Media employees, who have spent an average of £74 a year on shares over the past three years, net an average £15,984 each - a profit of £13,320. A further 4,300 staff, who joined the share scheme more recently, will get smaller payouts. Berkett said he would step down once the deal is finished in June, saying "I'm not a very good number two".