Football flotation frenzy may be tempting TV's big players, but cable is going nowhere fast

Football frenzy has hit the City, as investors pile into the increasing number of Premier League clubs listed on the stock market. (Yes, this is a media column: read on.) By the close of the year, you can expect yet more teams to come to the market, enticed by the prospect of raising development cash to fund new stadiums and big transfer fees for hot-ticket players.

Sheffield United has just became the latest to list on the Stock Exchange, where its shares immediately raced to a premium. It joins such luminaries as Manchester United, the most valuable club by a long chalk, as well as Tottenham, Chelsea, and Leeds. Next to invite investors in will be Newcastle United, which is working on plans to raise pounds 50m through a flotation later this year. There could soon be a football index, made up of the publicly quoted clubs - an indication of just how hot the sector is.

But as is usual with trendy new stocks, the initial hype has been replaced in some quarters by negative sentiment. "It's all been overdone," the doubters cry. "These high valuations cannot be sustained."

Well, all right, it is difficult to say just what an English football club should be worth, and the City is divided. What the doubters forget, however, is the reason the frenzy was ignited in the first place: the huge potential for exploiting broadcast and marketing rights. These cannot be quantified with any precision, but the money on offer will be stupendous.

In the days of the broadcasting duopoly, the BBC and ITV carved up the rights to sport between them, and the amounts generated by this were minuscule. All that changed in 1992 when Rupert Murdoch's BSkyB bought exclusive live rights to the matches of the Premier League, offering a rich package that transformed the financial health of the top clubs. When the deal was renewed last year, for a whopping pounds 670m over four years, the clubs were in an even better position.

But the basic broadcasting rights, as lucrative as they are, pale next to the real prize: pay-per-view rights. By the end of the decade, punters will be able to watch football matches as and when they like, paying per game or for a full season, on a live basis or at a more convenient time through an extensive repeats service. Pay-per-view could be worth as much as pounds 2.5bn a year to the top football clubs - more than enough, surely, to warrant all that speculative frenzy on the stock market?

Further proof that football is a likely money-spinner comes from the broadcasters themselves. A glittering line-up of ITV companies and other media groups have looked seriously at the idea of investing in football clubs, in an attempt to own the rights. Pearson Television's Greg Dyke proposed taking stakes in two football clubs this summer, a plan which failed to win board support. Granada's former media chief Duncan Lewis also looked hard at the possibilities. United News & Media, Lord Hollick's television and print empire, still has not ruled out investments in sport. It can only be a matter of time before one of the media giants actually makes a move on football.

While the traditional broadcasters mull over the finer points of rights strategy, the cable industry is struggling to work out a strategy of any kind. The sector remains in a bit of a mess, and until it can find common ground, and the guts to defend it, cable will continue to have a poor reputation.

Symptomatic of the problem are two issues confronting the industry: the disarray at Cable & Wireless Communications, the would-be sector leader, and the persistent doubts about the management at Telewest.

C&W Comms was meant to be the start of a real solution to cable's problems. By bringing together three cable operators - Nynex CableComms, Bell Cablemedia and Videotron - and merging them with C&W's Mercury phone division, Cable & Wireless would create a single, integrated, phone, TV and interactive service giant, able to compete with BT on one side and with BSkyB on the other. But mergers are complicated things. Thousands of jobs will have to be shed and executives paid off. Until last week, progress on integrating the operations had been stymied above all by the lack of a dedicated executive.

Last Friday, the company finally made an appointment, unveiling the former Granada executive Graham Wallace as the new chief executive. Well-respected, he will nonetheless be severely tested by the need to move quickly on the merger front, even as he attempts to set a coherent development strategy for the new group.

Similar management doubts have hit Telewest, currently the country's largest operator. The former chief executive, Alan Michels, left last year, and was replaced on an interim basis by Stephen Davidson. Insiders at the company insisted at the time that Davidson would be confirmed in the position by Christmas. Yet he is still acting chief executive, and will not know his fate until a board meeting this week. A majority of large shareholders - including TCI - are believed to support him, but a vocal minority on the board are unsure about his aggressive strategy - he is leading cable's efforts to develop digital services - and believe someone else might be better.

This year is cable's make-or-break period, by all accounts. The launch of digital TV, the roll-out of Internet modems and the introduction of new interactive services will test cable's ability to compete against well-heeled BT and BSkyB. Cable ought to flourish: after all, it has the best platform technology for integrated services, and offers the most flexible mix of products. But until Wallace is in place and the C&W Comms merger is completed, there will be persistent doubts about the industry's future.

Sport
David Moyes and Louis van Gaal
football
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
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 Media

Senior Account Executive / Account Executive

£25 - 30k (DOE) + Bonus & Benefits: Guru Careers: We are looking for an Accoun...

Account Manager / Sales Account Manager / Recruitment Account Manager

£25k Basic (DOE) – (£30k year 1 OTE) : Guru Careers: We are seeking a bright A...

Resourcer / Junior Recruiter

£15-20k (DOE) + Benefits / Bonus: Guru Careers: We are seeking a bright R...

Web Designer / Digital Designer

£25 - 40k (DOE) + Excellent Benefits: Guru Careers: We are seeking a Web Desig...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments