What took Ofcom so long? It’s been obvious for a while now that something is wrong with the way TV Premier League football rights are sold.
I say that as a football fan (Fulham, Johnny Haynes Stand), but also as an observer of an industry where broadcasting prices go ever higher. We pay more than twice what viewers in France, Germany, Italy and Spain are charged for live football – and they get to see 100 per cent of the games compared with our 41 per cent.
With the next auction round looming, it was likely that after a 70 per cent increase last time, to a whopping £3bn, the cost was going to jump again. A few more matches might have been thrown into the pot, but another leap was on the cards – perhaps not by as much as another 70 per cent but nevertheless high enough to make the Premiership club owners’ salivate.
The Premier League are masters at selling a little for more. They know that with the two TV rivals, Sky and BT, locked in a bidding war, the only way is up because their product is in high demand. Ofcom is right to take up Virgin’s complaint.
But there is no guarantee that if 100 per cent of the matches were made available on a non-exclusive basis, as they are elsewhere in Europe, prices would necessarily fall. However, they would stop rising inexorably.
One argument used to justify the limited offer from the Premier League is the sacred cow that is the collective 3pm Saturday kick-off. This would be under threat if more games were aired live – and attendances could fall. In reality, however, the number of matches that begin at 3pm on a Saturday is already relatively low and has been dropping: only around half of all Premiership games now begin at that time.
While the Premier League is at pains to maintain that the beneficiaries are the clubs in the league – the best in the world we are told, ad nauseam – and therefore the fan, that is not how it feels. We’re asked to cough up larger and larger sums for only restricted access.
In Europe, supporters can follow all their team’s matches live. Same applies in the US, with the NFL. Not here.
Unless your club is one of Arsenal, Chelsea, Manchester United, Manchester City and Liverpool, you’re probably denied the chance to see all their live matches. If Ofcom makes the change, it should chime nicely with the mighty Fulham’s return to the Premier League. We can but dream.
What has really been going on at Quindell?
There’s not been a story like that of Quindell for quite a while. A company rises as if from nowhere, on the back of a series of acquisitions; then questions are asked (and denied) about its cash-flow and other issues, the shares crash, followed by revelations about director’s share dealings, the financial adviser and joint broker resign and the founder and main man is ousted.
During the 1980s and 1990s, before compliance swamped everything in its path, we became used to stock market buccaneers building up a company at the rate of knots, only for it to collapse at an even faster rate. In former days, frequently the next step would be for the Department of Trade and Industry inspectors to be drafted in and to have a poke around. After that, who knows what might transpire …
Today, the DTI option is no longer available – the department, as was, is now for Business, Innovations & Skills, and investigations into possible rule-breaking are carried out by the London Stock Exchange and Financial Conduct Authority.
A pity, because with the DTI there was always the prospect of a senior lawyer, usually a QC, sitting down with the company directors concerned and giving them an almighty grilling.
Quindell, an insurance outsourcer, was born from an idea conceived in the bar of a Hampshire golf club and, thanks to dizzying deals, climbed to a £2.4bn market cap.
Then came the fall. The company was targeted by Gotham City Research, a US short-seller. Over 74 pages, Gotham City laid into Quindell’s deals and questioned its cash-flow. The shares halved. Quindell duly sued for libel, and won, after Gotham City failed to provide a defence.
To restore confidence, it emerged that three directors were buying more than a million shares in the company. But oh dear: the London Stock Exchange intervened to force Quindell to clarify exactly what was happening. And that was that the directors were selling shares to Equities First Holdings (EFH), a US outfit specialising in share-backed loans.
The three – founder Rob Terry, Steve Scott, his long-time business associate, and Laurence Moorse, the finance chief – must buy back the shares in two years’ time at the price they sold them – 84.3p. Yesterday, the shares were 54p.
EFH can buy and sell in those two years, and hedge against the shares, and it doesn’t have to disclose it’s done so – which, of course, is not the case if the shares still belonged to the directors.
It may be technically above board but it does not seem right. Add in the fact that Mr Scott used some of the money to pay off a personal tax bill, plus the amount of short-selling that has gone on, and the ingredients are surely there for a Financial Conduct Authority inquiry.
The moves by the three, who have all quit, are reminiscent of the row that engulfed David Ross, the Carphone co-founder, in 2008, who was using his shares in Carphone, National Express and Big Yellow as collateral for personal loans without informing the companies. It emerged that Mr Ross was not alone, that directors of other companies had done the same. The then Financial Services Authority subsequently cleared Mr Ross of any wrongdoing, admitted the rules were far from clear and changed them.
Then there’s the resignation of Canaccord. The firm resigned as Quindell’s financial adviser and joint broker on 21 October, yet the market was only formally told on 17 November. In that intervening period, Canaccord’s name continued to appear on Quindell announcements, some of which portrayed the company positively.
Investors, who have seen their shares plummet, are entitled to know what has been going on within Quindell. The DTI inspectors would have been champing at the bit; the LSE, but more likely the FCA, should urgently take the reins.Reuse content