Sky faces battle over price of digital soccer

The Premier League has become involved in a heated dispute with BSkyB over broadcast of its matches on the planned new digital terrestrial TV platform.

The row centres on the price Sky should pay to offer live football action to British Digital Broadcasting.

Sky tied up a long-term programming deal with BDB, owned by Carlton Communications and Granada Group, after it had to drop its equity stake for competition reasons.

Premier League games are a key part of Sky Sports, one of the channels on offer from BDB, but Sky's existing four-year pounds 670m deal with the League does not cover digital terrestrial television.

Sky will have to negotiate an additional contract with the league to enable BDB subscribers to access games shown on cable and satellite television.

City analysts believe Sky is unwilling to pay more than pounds 50m for rights to show Premier League action on digital terrestrial until 2001, when Sky's contract with the league comes up for renewal. However, the league is thought to be pushing for at least pounds 70m.

A spokesman for the Premier League said: "The development of digital terrestrial is clearly over and above the current agreements. Broadcasting the Premiership games cannot occur without the explicit agreement of the Premier League."

He added: "Broadcasters cannot expect to earn vast sums of money from the transmission of our games without football seeing some of the benefits."

According to a report published today by the stockbroking firm Henderson Crosthwaite, Sky will succeed in negotiating the rights, "but at a price".

However, a source close to Sky said it would not be worth paying over the odds for the Premiership as viewing figures for digital terrestrial television would be low at first.

According to estimates from Henderson Crosthwaite, BDB will capture 1.2 million subscribers by the time Sky's contract with Premier League comes up for renewal in 2001.

Although Sky does not have the first option on negotiations with the league for digital terrestrial, the satellite operator does have a "holdback" clause which prevents the league agreeing a deal with another broadcaster.

An auction is therefore virtually out of the question. Even so, the league has approached other broadcasters to sound them out on how much the digital terrestrial rights are worth.

The disagreement is thought to have been triggered in part by the arrival of a new chief executive at the Premier League, Peter Leaver. While Mr Leaver has publicly emphasised that "there is no weakening of the link" between Sky and the league, industry sources say he is keen to secure a fair payment for the digital terrestrial rights.

A period of protracted squabbling over the rights will do nothing to help Sky's share-price, which has been battered in recent weeks by news of the resignations of Sam Chisholm, the company's chief executive, and David Chance, his deputy.

Sky's enforced withdrawal from BDB has also depressed the stock.

The report from Henderson Crosthwaite, entitled Digital TV: the Implications, sees further troubles ahead for Sky: "We continue to believe Sky is overvalued. It will face intense competition in the digital age and further regulatory restraints."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
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

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Jemma Gent: Project Coordinator

£12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable