Ihug Sky deal falters over salary demands

By Geoff Senescall

Ihug's deal with Sky Television is understood to have hit a snag after the internet company's two owners tried to demand salaries of around $500,000 each.

This was revealed in a confidential broker note to clients, and cited the salary grab as a reason the deal to sell 30 per cent of Ihug to Sky had yet to take place. It said that Ihug's two owners, Nick and Tim Wood, had tried to bump up their salaries from around $70,000 a year to $500,000 a year.

They had also asked for 10 weeks' annual holidays. Sky apparently baulked at this and is understood to have negotiated a reduced package. As a result, sources say the deal could now be signed this week.

Tim Wood declined to comment on the sale, which is reputed to value Ihug at $100 million. He said the claim that he and his brother had tried to boost their salaries to $500,000 each was "not true".

Ihug's deal with Sky was to have been signed on August 4. Sky chief executive Nate Smith said only that there was "a difference of opinion on some key issues".

Tim Wood simply said: "We're having some disagreements."

Another reason for the delay is understood to surround an interconnection that Ihug has with Telecom. Ihug was not to disclose details of this without first getting consent from Telecom. This has now been obtained.