Carlton must stay on the ball to reap Broadcasting Bill benefits

Recent deals and mergers seem to have left Carlton standing but it could be biding time to clean up when the Broadcasting Bill passes. By Torin Douglas. Torin Douglas is the BBC Radio’s media correspondent

Whither Carlton, now it has ruled out a bid for MAI and Granada has moved in on Yorkshire Tyne-Tees? With the two biggest potential targets removed, the largest group in ITV seems unlikely to become much larger. HTV and Scottish may be worth mopping up, but it seems Carlton has been left on the starting block in the Multi-Media Handicap Chase.

One should not shed too many tears for Michael Green. The last time the Government relaxed the rules on ITV ownership, it was he who jumped the gun – snapping up Central before the changes took effect.

The difference then was that the changes did not require primary legislation. What is fascinating about the recent media deals is that they were thought to be dependent on the new law but in practice have gone through without it. MAI and Granada have not only jumped the gun – they’ve jumped the gate into an arena which most people had supposed was locked.

It had been thought that until the current Broadcasting Bill was to become law, national newspapers were forbidden from owning ITV companies and Granada, which already owns LWT, could buy no more than 20 per cent of YTT.

The trick that has allowed both the MAI-United merger and Granada’s purchase of more YTT shares is “warehousing” – putting the apparently illicit shares into a deadlocked company in which no shareholder has control. It has the approval of neither the Department of National Heritage nor the Independent Television Commission but it’s a loophole that is undeniably effective.

The concept of “warehousing” awkward media holdings was pioneered in commercial radio, when EMAP launched a bid for Trans World, despite the fact it broke the Radio Authority’s ownership limits. The principle was tested in the courts and EMAP won but we were assured this did not provide a precedent for ITV companies.

It seems MAI and Granada knew better. Indeed, Carlton, like Granada, has used the same device for its shareholding in ITN, which would otherwise have had to be reduced. The ITC made clear its disapproval.

So why have a Broadcasting Bill, if these deals could be done anyway? When I sug gested to Lord Hollick on the day of the MAI-United announcement that the full benefits of the merger would only become apparent when the Bill became law, he was quick to deny it. The deal, he stressed, worked perfectly well and was totally legal under the old ownership rules.

The fact remains that once the Bill has gone through, and the Express Newspaper shares can be removed from deadlock, the management of the newly merged group will have greater opportunities for revitalising the parts of the business that need refreshing. And if the Government had not been planning to relax the ownership rules, it would not have stood by while companies drove a coach and horses through them.

Nonetheless, the Broadcasting Bill is causing the Government unexpected bother. The fact it prompted the biggest defeat in the Lords for years, over an issue not actually covered by the Bill at all – TV sports rights – shows how far broadcasting and the media actually touch people’s lives.

Now BSkyB seems to be rubbing salt in the wound by launching its first pay-per-view event, just as the Government is trying to formulate its response to the Lords defeat. The Bruno-Tyson fight is the very stuff of pay-per-view in the US, where people pay up to $50 for a top TV title fight, but there seems to be a backlash in Britain.

Viewers already paying 25 a month for the Sky multi-channels package have yet to be won over by the argument of BSkyB and promoter Frank Warren that the 9.95 pay-per-view charge is actually a bargain because otherwise the event would be shown in closed circuit cinemas at 20 a head and not on TV at all.

Is it just bad timing as far as BSkyB is concerned? The broadcaster does not control the date of the fight and the TV rights are in the hands of Don King and Frank Warren. If King insists the bout is shown either in cinemas or on pay-per-view TV, should Sky have refused to show it?

Does it believe it is already in such bad odour with viewers, MPs and peers that it might as well get the pay-per-view row over at the same time? Or, by giving people a glimpse of the price pay-per-view events can charge, does it hope to show that subscription channels are a bargain?

Either way, viewers’ take-up of the Bruno fight will be watched closely by everyone in broadcasting, not least by Michael Green of Carlton. For, to return to my opening question – whither Carlton? – my money would now be on Green looking further into the TV future.

One of the main purposes of the Broadcasting Bill is to open up digital terrestrial television which, unlike ITV, can charge viewers for what they see. It offers one of the few chances for broadcasters to challenge BSkyB’s pay-TV monopoly, particularly since a single company could control three of the six “multiplexes”.

What price that company being Carlton?

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