BSkyB in joint bid to stop Carlton winning horseracing media rights

BSkyB, the pay-TV service 38-per cent owned by Rupert Murdoch, has entered the battle for the UK horseracing media rights, teaming up with Arena Leisure and Channel 4 in a joint bid to stop rival Carlton Communications winning control.

BSkyB, the pay-TV service 38-per cent owned by Rupert Murdoch, has entered the battle for the UK horseracing media rights, teaming up with Arena Leisure and Channel 4 in a joint bid to stop rival Carlton Communications winning control.

Arena, which earlier this week saw its original £320m offer trumped by Carlton, is forming a new company with BSkyB and Channel 4 in order to make a new offer for the worldwide media rights for the UK's 59 racecourses. The joint venture, NewCo, will within two weeks detail its ownership structure and offer, which will not include a bid for the rights to broadcast into licensed betting shops in the UK.

Arena Leisure's finance director, Ian Penrose, said: "We will be offering a fully integrated package of terrestrial, digital, pay-TV, and interactive gaming that will maximize the long-term value of racing.'' Arena owns and operates six racecourses and an online betting business in the UK. Its shares soared as much as 14 per cent yesterday before closing 11p, or 7.9 per cent, higher at 151p.

The horseracing rights, which include Royal Ascot and the Grand National, are sold by the Racecourse Association and are held at present by the BBC and Channel 4.

Carlton, which part-owns ONdigital with Granada Media, is believed to have offered a £400m package to the racing industry, including a 50-50 profit share arrangement. If it wins, the company would probably show racing on ITV, start interactive betting services through ONdigital, and possibly pass some programming to the BBC.

BSkyB entered the bidding to "try to stop Carlton getting the rights and running them exclusively on ONdigital", said Anthony de Larrinaga, an analyst at SG Securities. "It makes an awful lot of sense for BSkyB to get them because it would provide the traffic flow to drive a move into the [interactive] betting arena." The news of BSkyB's entry into the bidding came as the Department of Trade and Industry yesterday told BSkyB to ensure that rival broadcasters would have access to versions of its channels without interactive features.

BSkyB, Europe's second-biggest pay-TV provider, has spent big in the past buying broadcasting rights to sporting events, including football.

"With three players, one of whom is BSkyB, which has been quite aggressive in past bidding for rights, one would think NewCo will outbid Carlton," one analyst said.

BSkyB's shares fell 20p, or 2.17 per cent, to 900p. Earlier this year, Channel 4 and NTL, a cable company, withdrew their £250m bid.

A Carlton source said: "Carlton's bid has been very well received by the racing industry but if something better comes along we'll have to take it from there."

Carlton shares fell 16p to 468p.