YooMedia Sells its Interactive TV Gaming Channel, Avago, to Gala Group
UK-based interactive TV content and services company, YooMedia--which late last year issued a profit warning and revealed that it was "exploring a number of available options for strengthening its balance sheet," including the sale of its dating business (see [itvt] Issue 6.41 Part 1), and which subsequently raised £3 million through a share issue (see [itvt] Issue 6.44 Part 1)--has sold its interactive TV gaming channel, Avago, to betting and gaming company, Gala Group. The channel, which features live presenters, is currently available on the Sky satellite platform (channel 181) and will shortly launch on ntl's digital cable platform. The deal sees Gala acquiring the Avago brand and associated intellectual property, and the channel's database of over 250,000 registered customer accounts.
Gala--which has a database of over 7 million registered customers and whose brand enjoys a high profile in the UK--plans to rebrand the channel as "Gala TV," and relaunch it by the end of the third quarter. However, YooMedia will continue to have what it describes as a "prominent interest" in the channel and will continue to provide its interactive gaming portal behind the channel. The terms of the acquisition deal provide YooMedia with an asset sale consideration, an ongoing share of the channel's gaming revenues, and support and development contracts for more than three years. The company says that the deal will provide it with a net income contribution of between £5.1 million and £8.05 million, depending on the channel's performance.
[itvt] asked YooMedia group managing director, Neil MacDonald, why the company had decided to sell Avago: "The Avago deal will see the whole interactive TV gambling proposition be promoted to a much wider audience than we could ever reach under our own branded efforts," he wrote in an email. "The Avago channel has been very successful for us, but in the run-in to the new UK remote gaming legislation coming into force sometime in 2007, it was always our strategy to partner with a leading branded operator, as the market will mature rapidly. We're very pleased that we managed to find the perfect partner for the Avago interactive TV proposition--Europe's largest leisure gaming operator, Gala. It also signals," the email continued, "along with the work we do with William Hill, the UK's largest bookmaker, that interactive TV gaming is no longer the preserve of niche independent players, such as ourselves, or just Sky, and is now a mainstream part of a multi-billion-dollar industry."
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