BSkyB in talks to buy 9.9% of Chelsea

BSKYB IS negotiating with Chelsea about taking a stake of just under 10 per cent in the club. Tony Ball, the satellite broadcaster's new chief executive, is understood to be in talks with Ken Bates, chairman of Chelsea Village, owner of Chelsea football club, about acquiring a 9.9 per cent interest for around pounds 15m.

The pay-TV giant is also expected to confirm this week that it will take a 9.9 per cent interest in Leeds Sporting, the owner of Leeds United, for about pounds 7.5m. Both deals would be at slight premiums to the clubs' share prices.

Should the broadcaster, 40 per cent-owned by Rupert Murdoch's News Corp, move ahead with either deal Football Association guidelines would require it to reduce an 11.1 per cent interest in Manchester United to below 10 per cent. BSkyB bought the stake during its attempted takeover of the club which was blocked in May by Stephen Byers, the Secretary of State for Trade and Industry.

By acquiring small stakes in several clubs, BSkyB would gain a seat on each club's board. It would thus be positioned to advise on future negotiations about football broadcasting rights, in particular, the introduction of pay-per-view matches.

The strategy of buying minority stakes in sports clubs has already been used by Mr Ball in the US. During his tenure with Fox Television, the network bought stakes in several sports franchises.

Other UK broadcasters have also been looking at football clubs. Last month, Granada, the ITV broadcaster that co-owns ONdigital, bought a 9.9 per cent interest in Liverpool, while Carlton had talks with Arsenal last autumn and its Central TV arm is thought to have approached Aston Villa.