The new five-year deal, valued in the region of £350m, will result in BSkyB’s sales house handling the advertising airtime for MTV, VH1, Viva, Nickelodeon, Comedy Central and BET. It is also expected to include VBS’s third-party sales for E! Entertainment.
The move has taken the market by surprise, not least those within the senior management team at Viacom Brand Solutions, led by managing director Nick Bampton since 2004.
The sales house has developed a reputation for offering a different proposition since its inception in 2001 and generated £80m of ad revenue for MTVN this year.
Negotiations for the new tie-up with Sky have been brokered by David Lynn, executive vice-president and managing director of MTV Networks UK and Ireland. Speaking to Media Week, he confirmed that while the group had been considering the advantages of consolidation for some time, the Sky deal came about very quickly, in a matter of weeks.
He called it a response to the evolving marketplace and added: We believe there’s a first-mover advantage in consolidating.
Exactly 80 VBS staff, including Bampton, will become Sky Media employees under TUPE regulations, according to Lynn, who could not rule out redundancies at a later date.
However, confusion over the deal remains, with Nick Milligan, managing director of Sky Media, down- playing suggestions it had been quick to materialise.
The decision for MTVNI to appoint Sky Media as its ad sales representative follows discussions that stretch back a few months, he said.
It has been suggested the appointment of Sky was a last-minute add-on to MTV’s distribution extension package, also announced last week, but Milligan stressed the deals were not conditional on one another.
Reaction from agencies and broadcasters
Andy Spray, broadcast director, PHD
VBS has always been good with innovative offerings. You’d hope the MTVNI brands will continue to be traded in a way that benefits the advertiser. Sky could be a good fit for Viacom’s cutting-edge youth brands. The new larger operation could bring a good deal of forward thinking to the table - like its 3D launch and progressive hardware like its green button.
Jim McDonald, head of broadcast, MPG
The fact the deal was done behind the backs of VBS’s trading experts makes you wonder. VBS has been excellent at sales innovation, genuinely finding different ways of getting value for brands. This year, despite the tough climate, they have enticed new advertisers through shared-risk deals. Unfortunately, VBS was possibly too small in the market, opening itself up to being bullied over CPTs... Unless there's an upturn in overal TV spend then I expect more consolidation in the future.
Kelly Williams, director of sales, Five
The merged Sky, VBS offering will enter a trading season that promises to be challenging for both agencies and media owners. Up to 30% of the TV business has been up for grabs in the last year or so, and no one has won any of it by promising to pay more for advertising. There is only a finite amount of discount in the TV market so I think it is going to become a real issue for traders in 2010.
Sky Media and VBS: senior managers
VBS
Nick Bampton
Managing director
Mark Swift, vp, sales director
Jamie West, investment director
Keith Crisp, director of regional investment
Agostino Di Falco, vp, director of Insight & Planning
Andy Farwell, managing director, Ireland
Damon Lafford, investment director
Dan Salem, vp, director of partnerships
Gill Hayward, vp, director of operations
Sky Media
Nick Milligan
Managing director
Richard Hawking, director of operations
John Litster, sales director
Jeremy Tester, communications director
Graham Appleby, director of commercial partnerships
David Shore, head of sponsorship
Jeff Eales, systems & development director
James Rice, regional sales director
Richard Kelly, sales director, Dublin
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