RICHARD BRANSON - BRANSON AND MURDOCH PART WAYS IN U.K.

The uneasy relationship between Rupert Murdoch's Sky Broadcasting and Richard Branson's Virgin Media has fractured after Virgin cut off basic BSkyB service to its cable subscribers today, claiming that the Murdoch-controlled company was insisting on doubling its fees despite a 20-percent decline in its audience. "Nothing Sky have said or done in the course of the negotiation indicates they had the slightest interest in doing a commercially viable deal," Virgin CEO Steve Burch said in a statement. A spokesman for Sky said, "We've made repeated efforts to reach an agreement but Virgin Media has rejected all of our proposals." On the channels that had carried the Sky channels, Virgin posted spoof notices. For example, the Sky News channel was bannered, "Sky Snooze. Try BBC." Virgin said it would use the money that it saved as a result of the negotiations' collapse to make major programming acquisition and expand its video-on-demand service.

01/03/2007