Virgin Media 2006 Annual Report Download - page 38

Pursuant to an agreement with Virgin Retail Limited, we are entitled to occupy a dedicated space in which to advertise and
promote our products and services in specified Virgin Megastores, including future store openings. We have no control over the
number of stores that may be opened or closed in the future. In addition, any of our distribution partners may from time to time close
retail locations or otherwise reduce the scale of their businesses. If any of our distribution partners were to close some or all of their
operations, or we fail to maintain these key distribution relationships, our revenue may decline.
In addition, we plan on opening our own retail outlets in the next few years to increase the sales of our products and services. Our
stores may not perform successfully.
We depend on the ability to attract and retain key personnel without whom we may not be able to manage our business lines
effectively.
We operate in a number of rapidly changing technologically advanced markets that will continue to challenge our senior
management. There is significant competition in attracting and retaining qualified personnel in the telecommunications industry,
especially individuals with experience in the cable sector. We believe that the unique combination of skills and experience possessed
by our senior management would be difficult to replace, and that the loss of our key personnel could have a material adverse effect on
us, including the impairment of our ability to execute our business plan. Our future success is likely to depend in large part on our
continued ability to attract and retain highly skilled and qualified personnel.
Certain of our significant stockholders could have an influence over our business and affairs.
Certain persons or entities are our significant stockholders. Based on SEC filings to date, the Virgin Group beneficially owns
10.5% of our issued and outstanding common stock; in addition, Franklin Mutual Advisers, LLC beneficially owns 9.2%, Ameriprise
Financial Inc. beneficially owns 8.9%, and Mr. William R. Huff beneficially owns 5.7%, of our issued and outstanding common stock.
Each of these significant stockholders could have an influence over the business and affairs of the company.
On April 3, 2006, we entered into a license agreement with Virgin Enterprises Limited which provides for us to use the Virgin
name and logo in our consumer and content businesses. In connection with this agreement, Virgin Enterprises Limited had the right to
propose a candidate to our Nominating Subcommittee to fill a single new seat on our board. Virgin Enterprises Limited nominated
Mr. Gordon McCallum, Group Strategy Director of Virgin Enterprises Limited, and he was appointed to our board on September 11,
2006. As a result of Mr. McCallum’s relationship with Virgin Enterprises Limited, if conflicts between the interests of Virgin
Enterprises Limited and the interests of our other stockholders should arise, this director may not be disinterested.
Mr. Huff is a director of Virgin Media Inc. and is the president of the managing member of W.R. Huff Asset Management Co.,
L.L.C. As a result of his relationship with W.R. Huff Asset Management Co., L.L.C., if conflicts between the interests of W.R. Huff
Asset Management Co., L.L.C. and the interests of our other stockholders should arise, this director may not be disinterested.
Disruptions in Virgin Media TV’s or sit−up’s satellite transmissions could materially adversely affect their respective operations.
Virgin Media TV and sit−up currently broadcast their digital programming content with leased satellite transponders, the
operations of which are beyond the control of Virgin Media TV and sit−up. Disruption to one of these satellites would result in
disruption to Virgin Media TV’s or sit−up’s programming and, depending upon the nature of that disruption, could result in a loss of
revenues, a loss of customers and/or adverse publicity. In addition the satellite transponders may fail before the expiration of Virgin
Media TV’s and sit−up’s contractual right to utilize them, which may result in additional costs as alternative arrangements are made
for satellite transmission.
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Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007