Digital bidders scramble for pay-TV football

Click to follow
The Independent Online
Efforts by leading Premier League clubs to push ahead with pay-per-view broadcasts of top football have energised British broadcasters, many of which have now advanced their own pay-per-view plans, according to sources.

At least two bidders for digital terrestrial television licences, currently on offer from the Independent Television Commission, plan to focus on sport, including pay-per-view events, as the main driver of their new services. They are expected to talk to Premier League clubs in coming months about securing pay-per-view rights to matches.

But BSkyB, which currently holds the exclusive live rights to games as negotiated collectively by the Premier League, is expected to fight hard to extend its contract to include pay-per-view. Big clubs, including Newcastle and Manchester United, are believed to be committed to generating maximum returns from their matches, and have been resisting suggestions from the Sky camp that revenues from pay-per-view be split equally between the rights holder and the broadcaster.

Manchester United, in particular, is known to be pushing for the early introduction of pay-per-view. A leading institutional shareholder in the club said: "Manchester United has the least need of the collective bargaining process, as they are the biggest name in the game."

Meanwhile, the cable industry, under the leadership of Telewest, the second-largest operator, is in the early stages of planning a pay-per- view movie service aimed at giving cable an advantage over satellite in the digital age. It is believed that Cable & Wireless Communications, the nation's largest operator, is also involved in the discussions. The companies plan to bundle "pay-per-view" movies with cheap telephony, as a key marketing tool.

The moves are linked to growing expectations that pay-per-view will be the fastest growing industry in the media by the turn of the decade. According to a study by Salomon Brothers, the merchant bank, pay-per-view in Europe could generate pounds 3bn a year by 2000 and pounds 9bn annually by 2005.

News of the accelerated pay-per-view plans sent the shares of Manchester United and Tottenham Hotspurs climbing. Manchester United closed at 532.5p, up 26.5p, while Tottenham was ahead 14.5p at 545p. BSkyB saw a brief rise in early trading but settled back to close at 519.5, down 1.5p on the day.

Media analysts said yesterday that regulatory pressures on BSkyB, the dominant pay-TV broadcaster, as well as the likelihood of increased competition would combine to create opportunities for new entrants to the pay-per- view market.

Michael Green's Carlton Communications, among other bidders, is expected to apply for a digital terrestrial television licence. In league with Mirror Group, owners of 46 per cent of The Independent, Carlton bid pounds 650m for the last Premier League contract, in competition with Rupert Murdoch's BSkyB.

Last night BSkyB denied it was in talks with either the clubs or the Premier League about pay-per-view.