At one time terrestrial television monopolised the great sporting events. Then along came Rupert Murdoch. Now it looks as if ITV and the BBC have thrown in the towel. Have they? Rhys Williams reports
It's a messy business, sport. Multi-million-pound transfer deals, cash payments and big audience draws. And that's even before you get to the players. Sport today is dominated as much by TV rights deals as it is by the grace and gifts of its participants.

Witness the frenzied bidding between the BBC, ITV, BSkyB and Channel 4 when a sport is up for grabs, or the unseemly scrap for Trevor East, outgoing head of ITV Sport, safely tucked up this week as News International's executive director of sport with responsibility for developing BSkyB's portfolio in the northern hemisphere.

Sport counts, make no mistake. Ask Marcus Plantin, network director of ITV, who proudly boasted that its Rugby World Cup coverage was watched by 90 per cent of ABC1 men. As John Birt, director-general of the BBC, told the Independent: "Sport is a vital part of what we do, vitally appreciated by our viewers. There would be national mourning if a lot of sports went off the BBC."

There was a time when televised sport, particularly on the BBC, was so ingrained in the minds of the nation that it marked the season. Summer gave way to autumn with the arrival of Match of the Day; the damp weeks of January and February came alive with Five Nations rugby on Grandstand; coverage of the Wimbledon fortnight heralded warm summer rain.

But that is history, and the conventional wisdom governing four decades of televised sport is in shreds. Egged on by a Government keen to see a free market in broadcasting, the satellite channels - in particular, Rupert Murdoch's BSkyB - have embarked on a spending spree to snap up exclusive rights to national sporting events: overseas cricket Tests since 1990, premiership football since 1992, the Ryder Cup later this year.

The buyouts are revolutionising the way events are covered, and reshaping the sports. The price for English Rugby League was ripping up 100 years of history, reorganising itself into a European superleague with merged clubs, and switching to a summer season to suit the broadcaster. In return, the league landed pounds 77m last April.

A new reality is dawning on terrestrial broadcasters. Bar a few notable exceptions, the days of exclusive live coverage of sport will be consigned to that golden age of TV when Blue Peter was fronted by Val, John and Peter. Unable to match Murdoch's millions, terrestrial TV's best hopes lie in shared coverage and access to secondary rights via delayed transmission or highlights.

The BBC seems to be more reconciled to this fate, at least if Mr Birt's utterings are anything to go by. "One thing is certain," he says. "The BBC can't afford to fund sports rights rising at anything like the rate they are now."

The price of clinging on to Five Nations rugby, the cornerstone of the now-creaking Grandstand, for three more years was pounds 27m - three times what it paid last time - and having to go along with BSkyB's entry into coverage of the domestic game. In cricket, the BBC has retained domestic Test matches and the NatWest Trophy. It did not even pitch for one-day internationals or the Benson and Hedges Cup, which are now the property of the satellite broadcaster.

Likewise, the BBC was not prepared to go the extra furlong to retain Cheltenham racing, wrested by Channel 4 last year for pounds 3m, five times the previous price and a figure described at the time as staggering by Jonathan Martin, the BBC's head of sport.

The news that the BBC is considering lobbying the Government this autumn to ensure that terrestrial broadcasters have access to highlights at the very least is a further indication that with flat income, it cannot afford to remain caught up in the hyperinflationary spiral.

A far more serious concern lies in restricting mass-participation sports such as football and cricket to exclusive coverage on minority channels and then charging the viewing public for it.

Four million households now have access to Sky in Britain, three million of which subscribe to Sky Sports for pounds 14.99 a month. Industry forecasts predict that Sky will reach 41 per cent of homes with TVs by 2000. Mr Plantin and Mr Martin says BSkyB's vast buying power is distorting the market and denying viewers choice. Mr Birt predicts that BSkyB's subscription income will be double the corporation's revenue within a decade.

Mr Martin says that while not all sports are driven by money, the BBC will have to cut its cloth in a different way. "A complicating factor is that you may well find people bidding not to reflect the market value of the sport, but for ownership." However, he adds that although BSkyB has sewn up some exclusive deals, the nation has not yet missed out. "No one has really had a dose of deprivation - nothing of real substance, the sort of occasion that everybody wants to have an access to, that creates an interest that goes beyond the sport."

The kind of events Mr Martin has in mind are England's World Cup semi- final against West Germany in 1990, Virginia Wade winning Wimbledon in 1977, and Torvill and Dean skating to Olympic gold in 1984. When those events are lost to the nation, he says, the political pressure to guarantee access will become irresistible. Mr Birt agrees: "Politicians will have to decide how far they want this process to go."

Access was once enshrined in post-war legislation. This laid down a schedule of sporting events too important to be broadcast on the fledgling ITV network, in those days a minority channel. Restrictions were lifted as ITV became a national broadcaster and modified by the 1990 Broadcasting Act. The Act bans eight events (see box) from exclusive coverage on pay-per-view TV channels, of which there are none in Britain.

Last year, the National Heritage Select Committee recommended that the restrictions be extended to subscription services such as Sky Sports. That suggestion was rejected by the Government last December. Labour, however, is committed to adopting the committee's proposals and says it will legislate if necessary.

It is also true that Murdoch's pounds 77m deal to set up a European Super League in rugby league provoked most political hostility among northern Labour MPs, in whose constituencies the clubs affected are based. A new Labour government could put the brakes on BSkyB's sporting bandwagon. Perhaps it is this issue, as well as the obvious fury over the Government's proposed reform of the rules governing cross-media ownership, that is driving Mr Murdoch's increasingly open courtship of Tony Blair.

Not surprisingly, the holders of sports rights resent political interference in the disposal of their assets. The Test and County Cricket Board has lobbied furiously to be de-listed. Terry Blake, the TCCB's marketing manager, says the board should be free to negotiate with "whoever we want, whenever we want. We're aware that the game belongs to everyone, but if it's a question of survival, then it must be our responsibility."

The TCCB points out that before BSkyB came along, there was no ball-by- ball coverage of overseas Tests or the county championship. The BBC had neither the time nor the inclination.

Cricket's experience demonstrates both sides of the argument. BBC and ITV cannot clear the schedules for wall-to-wall sport. While BSkyB has filched prize silverware from the terrestrial trophy cabinet, it has also given smaller premiership clubs coverage they could never have dreamt of under the old arrangements and brought cameras to Courage League rugby union.

David Elstein, BSkyB's head of programmes, says: "Dedicated sports channels are able to serve audiences in a very different way from terrestrial channels. The last Test match practically disappeared from the BBC because of Wimbledon. When Sky covers it, it covers it in full."

Elstein believes the terrestrials have only themselves to blame for the inflation that has gripped sports rights. He says: "Terrestrial broadcasters have to face up to the fact that there is deep resentment at the way they have ripped off sports rights-holders."

Events banned from exclusive coverage on pay-per-view TV channels:

1. Cricket Test matches involving England

2. Derby

3. Grand National

4. FA Cup Final

5. Fifa World Cup finals

6. Olympic Games

7. Finals weekend of the Wimbledon

tennis championships

8. Scottish FA Cup Final