Football frenzy grips media

News Analysis: First BSkyB bids for Manchester United, now Carlton talks to Arsenal. The rest of the Premier League is waiting for the next move

NEWS THAT Carlton Communications, Michael Green's television group, is in talks with Arsenal took the market by surprise yesterday. Although British Sky Broadcasting's pounds 623.4m bid for Manchester United was expected to prompt a wave of similar bids, few observers had expected other broadcasters to move so fast.

The prospect of last season's double-winners also ending up in the hands of a media group sparked feverish speculation about what other broadcasters might do. Granada, the media and hotels group, was seen as a potential bidder for Liverpool or possibly Leeds United. Media companies such as United News & Media and Mirror Group, as well as cable operators such as Cable & Wireless Communications, were also drawn into the frame.

Investment bankers compared the frenzy to the City's Big Bang in 1987, when large banks swallowed up the few remaining independent stockbrokers in a free-for-all.

Experts said BSkyB's move had effectively pushed other media groups and football clubs into each others' arms. Rival broadcasters were worried by the prospect of BSkyB extending its dominance of football rights. Meanwhile football clubs suddenly faced the prospect of having to compete with Rupert Murdoch's millions in the battle to sign the best players.

"Every Premier League club except Manchester United is suddenly very worried," said one banker.

Ownership of sports clubs by media groups is well established outside the UK. In the US, Rupert Murdoch has bought the LA Dodgers, CNN's Ted Turner controls the Atlanta Braves and Disney has bought an ice-hockey team which it christened the Mighty Ducks. In continental Europe, the pay-television group Canal Plus controls the Paris St Germain football club. Silvio Berlusconi, the Italian media mogul, owns AC Milan.

The logic is simple. The sports teams provide a source of compelling programming for local television networks while also offering potential for spin-off projects. Disney has made several movies featuring the Mighty Ducks. How long before we see Manchester United stars Ryan Giggs and David Beckham on the silver screen in a movie produced by Sky?

In the UK, the rationale is more defensive. Rupert Murdoch told BSkyB to buy a football club after realising that it was the only way to make sure the broadcaster kept a grip on broadcasting rights.

Other broadcasters have realised they must follow suit. Ownership of a Premier League club gives them a seat at the table when the league starts negotiating the renewal of those rights next year. Meanwhile, if the Restrictive Practices Court rules next year that clubs must negotiate their rights individually, the broadcasters will be sure of controlling the rights to the clubs they own.

As a result, buying a club makes most sense for television groups that both generate and broadcast programmes. "Both Sky and the ITV companies are integrated distribution and content plays," says Adam Singer, chairman of Flextech, the television programming group. With BSkyB snagging Manchester United, the spotlight has fallen on the three biggest ITV companies: Carlton, Granada and United News & Media.

Despite the timing of its announcement, Carlton has clearly been thinking about such a move for some time. The television group has been talking to Arsenal for at least several weeks. Michael Green, Carlton's chairman, is also understood to have held talks with Chelsea earlier this year.

Granada looked at buying Manchester United a few years ago. However, it is unlikely to take on BSkyB directly. Granada has a 6 per cent stake in the satellite group and the two have a joint venture to produce television channels. They are also equal shareholders in MUTV, the cable channel dedicated to Manchester United.

Carlton and Granada have another good reason for wanting to own a club. ONdigital, their jointly owned digital broadcasting venture, launches later this year and will go head to head with Sky's digital satellite service. Exclusive rights to certain football matches would massively increase ONdigital's chances of success.

These are not the only potential bidders. Mirror Group says it is not in the frame(see right) although it was one of the losing bidders in the battle for Premier League rights two years ago. David Montgomery, the chief executive, also made an approach to buy Aston Villa before it floated on the Stock Exchange last year.

Cable operators may also be interested. However, Cable & Wireless Communications, the country's largest cable operator, claims not to be interested, while Telewest and NTL do not have the cash.

Now they've decided they want to own a club, which one should the broadcasters buy? Last night analysts were naming Liverpool as the last remaining big name on the market. The club is controlled by the Moores family, owners of the Littlewoods empire.

Along with Arsenal and Manchester United, Liverpool is the third likely entrant into a possible European super league. It also has a large following outside the UK, making its brand name and television rights more valuable.

The next tier of clubs includes Leeds, Tottenham Hotspur, Aston Villa, Chelsea, and Newcastle. Although they do not have the same international appeal, they could provide a boost to a local television operator.

Analysts yesterday suggested Granada could buy Leeds to bolster its Yorkshire Tyne-Tees television franchise while Carlton, which owns Central Television, could make a move for Aston Villa if talks with Arsenal broke down.

The possibilities are almost endless, but one thing is sure: Manchester United and Arsenal will not be the only football clubs to be swallowed up by larger groups.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore