Discovery and BSkyB square up in High Court over ad sales

LONDON - Discovery Networks UK and BSkyB are at loggerheads over the amount of ad revenue Sky Media pays Discovery.

Discovery star Bear Grylls
Discovery star Bear Grylls

Sky Media has sold advertising for Discovery's TV channels since 2006. The current deal expires at the end of 2009.

However, Discovery has taken BSkyB to the High Court over a disagreement about the companies' advertising sales contract. It is understood that the dispute centres on a clause that allows Sky Media to cap the amount of money Discovery receives when its channels' commercial impacts reach a certain level.

This issue has become more pressing given that Discovery plans next year to launch its first channel on Freeview. The move is expected to  significantly increase the amount of commercial impacts Discovery's portfolio attracts. However, it is understood that, under the current advertising sales contract, Discovery would struggle to reap the maximum benefit from its extra impacts.

A senior TV figure close to the disagreement said: "This issue was lodged a while ago. It centres on the fact that there is a clause in the contract stopping Discovery benefiting as much as it could when its impacts do well."

It is believed both sides have filed their papers and the matter now lies with the courts.
A BSkyB spokesman said: "This action is a means to resolve a disagreement over the interpretation of a contractual clause.

"We look forward to continuing our relationship with Discovery, which remains a valued part of Sky Media's channel portfolio."

A Discovery spokesman said: "While we don't comment on contractual relationships, Sky is a very important partner and we look forward to building value with them."

In September, Media Week revealed that Discovery has been talking to other ad sales houses about its future arrangements. However, its negotiations with Sky are made more complicated by the fact Discovery is reliant upon Sky for the bulk of its UK pay-TV distribution.

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