Outlook: NTL/Newcastle

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The Independent Online
APART FROM being American, Barclay Knapp, the New York-based chief executive of NTL, has something else in common with Mark Booth, his counterpart at BSkyB. He is unable to name the left back of the English football team he is attempting to buy. Mr Knapp admits he knows more about American football than its English version. Unfortunately this is all too apparent in the price he's agreed to pay for Newcastle United.

True, he does seem to have shown some footwork in persuading Newcastle to sell up. The agreement gives NTL first dibs on the controlling shareholding owned by Douglas Hall, the brothel-creeping son of former chairman Sir John Hall. If, as expected, the Monopolies and Mergers Commission waves through BSkyB's takeover of Manchester United, NTL is clear to mount a full bid. Newcastle fans will probably welcome Mr Knapp with open arms after the abuse of the last year.

But hang on. The deal values Newcastle at a whopping pounds 160m - more than three times last season's sales. By comparison Aston Villa, Leeds and Tottenham Hotspur - all currently better placed in the Premiership table - trade for around two times revenues. Newcastle is arguably a stronger brand name. But so far little has been done to develop it outside the North-east.

What's more, BSkyB has the rights to show Premier League matches until 2001 and the local cable franchise is controlled by NTL's rival Telewest. And it's questionable how much demand there is outside Tyneside for some kind of fanzine TV channel. Has Mr Knapp gone football-mad then?

Maybe not. If the Premier League is found to be acting as a cartel when it is hauled up in front of the Restrictive Practices Court next year, the picture will change overnight. Clubs will be free to negotiate their own television deals, prompting a scramble by media groups to tie up the biggest clubs.

But if that is the justification, this looks a pretty expensive bet. Without the same national distribution as Sky, NTL is going to struggle to make the numbers work in quite the same way as the proposed BSkyB/ManU linkup.

And although NTL looks to be paying a full price, this is a far from satisfactory outcome for the thousands of fans who paid even more when the club was floated two years ago. Still, taking a loss on their investment might seem a small price to pay for finally getting rid of the ghastly Mr Hall.

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