Virgin offers arbitration to help Sky negotiations

Virgin Media said it was hopeful that rival BSkyB would agree to an arbitration process to settle a dispute that could take Sky's channels off Virgin's platform.

Chief executive Steve Burch said that it had offered an unnamed third-party arbitrator to help in the negotiations, but had not yet received a response from Sky.

The current carriage deal, for Sky's basic channels, expires at midnight when BSkyB could withdraw its basic channels from the Virgin platform if the two groups do not agree a new price.

Virgin is proposing that the arbitration process also covers the deal that Sky made for the carriage of Virgin Media Television channels on the satellite broadcaster's service.

Reports have estimated that if no deal is reached Sky stands to lose around £60 million from its channels being removed from 3.3 million Virgin Media homes, with some analysts calculating Sky will need to gain about 150,000 Virgin customers to make up the revenue shortfall.