Channel 4 put up half the money and has won the rights for live coverage of Test matches - an enormous blow to the BBC, which currently holds the contract.
Bitterness was evident last night and a war of words broke out over how the BBC lost the contract. "There was no way that we could match the offer by Channel 4 who were clearly prepared to pay a fat premium," a BBC spokesman said. "In the end it was all about money." Channel 4's chief executive, Michael Jackson, retaliated: "It was about the quality of coverage, not who has got the biggest chequebook."
Channel 4 insiders insisted that the BBC bid had been only pounds 4m short of the winning offer, and that the England and Wales Cricket Board (ECB) thought the BBC's cricket coverage had become "tired".
Employees at BBC Sports were devastated by the news. "Until a few weeks ago, sports executives were supremely confident that we would get the rights," said one insider. "But now people are worried about their jobs."
The ECB said Channel 4 would also have the rights to the highlights of one-day internationals, and would cover the NatWest Trophy.
Sky Sports will have exclusive rights to live coverage of all home one- day internationals, including the new triangular internationals. It did not bid for all Test matches, but will cover one Test match a year exclusively live, and has secured rights to the new National League, which will involve promotion and relegation.
The ECB made clear that it admired Channel 4's "young and innovative" approach, clearly valuing the offer to put pounds 13m into "working to broaden and freshen the appeal of cricket, particularly to a younger, more multi- cultural audience".
One apparently strange aspect of the Channel 4 deal was its decision to transfer Saturday afternoon Test match coverage from its main terrestrial channel to a new digital channel. But Michael Jackson is developing new subscription digital channels, and City analysts now suspect that the cricketing rights will, in time, provide a building block for a new Channel 4 sports channel.
Channel 4 said yesterday that it would stick with Test match programmes through days when matches are interrupted by rain - quite a challenge for a panel of pundits who are not, unlike the BBC, supported by a rich archive of past matches.
Channel 4 has not yet concluded any deals for cricket presenters, but attention is now focused on Richie Benaud, the veteran BBC cricket commentator who is, at the moment, at home in Australia.
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