NetPlay TV gains full control of Challenge Jackpot and terminates Virgin Media option agreement

NetPlay TV (AIM: NPT) has agreed certain revisions to its relationship with UK-based cable-TV operator Virgin Media Television, whereby NetPlay has acquired the Challenge Jackpot datebases, and Virgin’s option agreement over NetPlay stock has been terminated.

According to NetPlay, this deal represents another step to achieving its goal of becoming the UK's leading broadcaster of gaming experiences across a broad range of platforms.

The agreement sees Netplay make a fixed cash payment to Virgin, totalling £1.82m. Netplay will retain all revenues generated through Challenge Jackpot, previously shared with Virgin, and Virgin will receive fixed monthly payments for the airtime used by the service.

"The revised terms of this deal allow us to invest in the future development of the Challenge Jackpot brand, as well as the ability to extend it onto other channels. We see Challenge Jackpot as the mass market gaming channel in our portfolio, something for everyone”, NetPlay chief executive Martin Higginson said. "Termination of the option agreement is a good use of the company's cash reserves. It reduces the threat of dilution for all shareholders."

The original deal between the companies was agreed in April 2009. NetPlay took control of the production of the TV channel and website. The Challenge Jackpot channel is a continuous interactive gaming channel, the channel airs 24 hours a day on the Virgin cable-TV network and on SKY’s (LSE: BSY) satellite TV network. The Challenge Jackpot database generated £2.9m of gross gaming margin from 12 May 2009 to 31 December 2009.

As part of the deal, Virgin at that time received options over 14.9m NetPlayshares, or 9.9% of the  issued share capital. These options have now been terminated.

http://www.proactiveinvestors.com.au/companies/news/5975/netplay-tv-gains-full-control-of-challenge-jackpot-and-terminates-virgin-media-option-agreement-5975.html