Netplay, Virgin TV re-write Two Way Gaming deal
NetPlay TV has agreed major changes to its deal with Virgin Media Television (VMTV) including the termination of its option agreement...
NETPLAY TV has agreed major changes to its deal with Virgin Media Television (VMTV) including the termination of its option agreement.
The April 2009 deal saw Virgin Media TV transfer the assets of Two Way Gaming to Netplay TV for shares to the value of £2m and a 9.9% stake in the company, with NetPlay TV taking over production of the Challenge Jackpot brand. A number of Two Way Gaming staff also transferred to NetPlay, including its managing director Guy Templer.
Under the revised agreement, AIM-listed NetPlay will take control of the current Challenge Jackpot database and terminate the option agreement in exchange for a fixed cash payment of £1.82m.
The current database generated £2.9m of gross gaming margin from 12 May 2009 to 31 December 2009 and was subject to a revenue share agreement.
However, under the revised terms all revenues arising from this database will be retained by NetPlay TV, with VMTV receiving fixed monthly payments that reflect the value of its airtime.
Netplay has also agreed terms with VMTV for the termination of the option agreement under which VMTV was granted options over 14.9m ordinary shares being 9.9% of the share capital then in issue at a price of 18p per share.
NetPlay chief executive Martin Higginson said: “The revised terms of this deal allow us to invest in the ability to extend it onto other channels. We see ‘Challenge Jackpot’ as the mass market gaming channel in our portfolio, something for everyone. Over the coming months we will introduce more live TV games allowing us to broadcast to wider audiences at peak times.”
He added: “Termination of the option agreement is a good use of the company’s cash reserves. It reduces the threat of dilution for all shareholders.”
In other company news recently, Netplay in February signed a two year, six-day-a-week TV broadcast deal with STV Group, the biggest commercial broadcaster in Scotland, while VMTV sister company Virgin Games revealed it is looking for a number of external investors with which to enter new markets including France, Spain, South Africa and the US states of California and Florida.