Sky faces fight for showcase matches

Rupert Murdoch's BSkyB appeared to be in danger of losing its showcase Sunday afternoon football programme after the end of the first round yesterday of bidding for the rights to the Premier League for the three years from 2007.

The broadcaster has secured three of the six live television rights packages on offer, taking 69 matches from the 138 available. Sealed bids for at least one of the packages were received from cable group NTL, Disney-owned ESPN, Irish broadcaster Setanta, Channel 4, Channel 5 and France Telecom, it is thought.

Football is so integral to BSkyB's identity and profitability that the City assumed it would go all out to secure the maximum of five packages that the rules allow. BSkyB shares fell 5p to 525.5p yesterday as the news emerged that it faces serious competition, most strongly, it is assumed, from NTL.

The bid process is conducted in a highly secretive manner, with sealed offers arriving under high security at a law firm. A source close to the process said: "It would be fair to assume that Sky easily won the three that have gone. For the rest, it was close enough to warrant a second round."

Media analysts say that although Sky has won the 2nd, 3rd and 4th most attractive packages, it will be under pressure to pay well over the odds to secure the rights to show games on Sunday at 4pm. All bidders have signed strict non-disclosure documents that prevent them discussing how much they offered - an attempt by the Premier League to avoid a bid war.

BskyB has owned live Premier League football rights in their entirety since 1992 - rights that are at the heart of Rupert Murdoch's strategy for the business. A recent ruling by the European Commission ensured that BSkyB's monopoly would be broken up. The EC threatened to take legal action against the Premier League unless it came up with new terms that allowed other broadcasters a slice of live football.

The Premier League raised £1.6bn in 2003 - the last time it auctioned off broadcasting rights, including overseas rights and highlights packages. This time, the total value of the winning bids is expected to be well over £2bn.

Peter Matthews, an analyst at Ernst & Young, said: "If it is true that Sky haven't got the top deal yet, that is very significant. A lot of people associate Sky football with a game on Sunday afternoon." The Premier League is in no special hurry to sign deals and will be happy to let the broadcasters sweat.

The second round of bidding will happen in the next two weeks, though it could be followed by a third or a fourth round if necessary. The Premier League wants to make a final announcement before 19 August, when the new season begins, but is expected to conclude the auction well before then. Given its close relationship with the League authorities and successful history of broadcasting football, BSKyB is still probably the favourite to grab two of the remaining three deals.

Paul Reynolds, a Deutsche Bank analyst, said: "Winning three and contesting another two is potentially a positive thing for Sky. My view is that Sky will win five packages because they've more financial resources and more ability to exploit them than everybody else has."

Although the EC ruling was designed to improve consumer choice, consumer confusion seems at least as likely an outcome. If NTL, for example, wins the 4pm Sunday slot from BSkyB, armchair football fans might have to buy services from both companies.

Parcelling out the Premiership

* STILL UP FOR GRABS

Package A: 23 matches at 4pm on Sunday; the prime package

Package C: A minimum of 12 matches on 8pm on Monday, the rest either at 1.30pm on Sunday or 5.15pm on Saturday

Package D: A minimum of 18 matches at 5.15pm on Saturday, the rest either at 1.30pm on Sunday or 8pm on Monday

* WON BY SKY

Package B: 23 matches at 1.30pm on Sunday

Package E: 23 matches at 12.45pm on Saturday

Package F: Between 7 and 13 matches on midweek evenings/bank holidays. And between 10 to 16 matches at 12.45pm on Saturday and 4pm on Sunday