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United News looks at pay-TV channel

United News & Media is considering linking up with Southampton Leisure to develop a pay-TV channel for Southampton Football Club, reports Cathy Newman.

United News, which has already been linked with plans for a Leeds United channel, is assessing ways of developing its pay-TV interests. One option is to exploit the geographical synergies between its Meridian ITV franchise and Southampton by setting up a channel dedicated to showing games from the club's archives. Both Meridian and Southampton are based in the South.

Although United News is not thought to have made any firm commitments to the idea, Malcolm Wall, deputy director of United Broadcasting and Entertainment, said yesterday: "We're always assessing any opportunities to break into the pay-TV market."

Southampton is understood to be looking for an investor to take a substantial stake in the business. City analysts said they would not be surprised if United News ended up buying a share of the company as part of the pay- TV deal. However, United denied this was being considered yesterday.

Southampton has had a troubled year since Secure Retirement reversed into the club in January. Its shares have more than halved in value from 150p to 72.5p.

Manchester United became the first football club to enter the pay-TV market last month when it tied up with BSkyB and Granada Group to set up its own channel, MUTV. The three parties will have an equal share of equity and will contribute up to pounds 10m between them.

Leeds and Newcastle United have also declared their intentions to set up their own pay-TV channels. Although clubs are eventually expected to make substantial returns from launching their own channels, some analysts have expressed doubt about the short-term viability of the ventures.

BSkyB has an exclusive contract to show live Premier League games, which has another four years to run. As a result, MUTV will only show games from Manchester United's archives.

Lord Hollick's United News has been probing ways of getting involved in pay-TV since it lost the race to win three digital terrestrial television licences earlier this year. United News had backed NTL, the cable company, which lost out to British Digital Broadcasting, the group owned by Granada Group and Carlton Communications.