Picking wrong TV rights advisers can cost dear

The Premier League’s expensive mistake in retaining Chisholm and Chance shows football bodies cannot be too careful in picking TV rights advisers.

It was one of the most anticipated football clashes of the season. Full of ill feeling, personal animosity and – for the media – the hope of seeing a bloody battle – it was in fact a classic grudge match.

Sadly, the contest between lawyers acting for the Premier League, and those acting for former BSkyB executives Sam Chisholm and David Chance, was called off at the last minute.

The High Court case was due to start this week. Instead the dispute – over breach of contract brought by Chisholm and Chance – was settled last Wednesday with the Premier League handing over an estimated &£12m in return for the two “media advisers” dropping their case.

One source says the deal is worth about &£1m per meeting since the duo were hired by former Premier League chief executive Peter Leaver back in November 1998. But most of those meetings were to discuss their legal claim and severance pay rather than the market for TV sports rights.

The duo, who had just left BSkyB, were hired to renegotiate the next TV rights contract for Premiership football – the current contract with BSkyB and the BBC ends in 2001. But some club chairmen, unhappy that they had not been consulted, felt there was a conflict of interest because of Chisholm’s and Chance’s BSkyB background. When they learned that Chisholm and Chance stood to make &£50m out of the negotiations, Leaver was forced to quit and the legal battle began in earnest.

So you can imagine that the Football Association (FA) will be hoping to get better value for money from the media advisers it hired last week to advise on the sale of TV rights for the FA Cup and England home games. BSkyB and ITV currently share the rights in deals worth a total of &£217m.

The FA is hoping to raise at least &£350m from the new rights deals, which take effect from the summer of 2001.

Sit-up.com, run by Ashley Faull and John Egan who have previously worked for ONdigital, was hired by FA chief executive Adam Crozier to advise on the fast changing world of TV and the market for sports rights.

But already there is a problem. Marketing Week can reveal the two are still registered at Companies House as directors of ONdigital – one of the companies likely to be bidding for the rights to broadcast the FA Cup and England games. If this proves to be more than an administrative error it would raise an important conflict of interest issue likely to anger other broadcasters – especially BSkyB.

It seems to have come as a surprise to the FA. Its spokesman Steve Double says: “I am not familiar with that set-up, I have no knowledge of that at the moment, I can’t comment.”

It’s amazing that, in the light of the Chisholm and Chance fiasco, nobody at the FA checked whether these two media advisers had any current connection with a media company likely to be involved in the bidding.

Once a director quits a company he or she has 14 days in which to notify Companies House. Faull and Egan left ONdigital in November.

The TV rights held by football have never been more valuable. What Rupert Murdoch said back in 1991, that sport acts as a “battering ram” for broadcasters to get into new markets, has never been more true. There are now even more broadcasters trying to get a toehold in the UK market – several including NTL and ONdigital did not exist the last time these football contracts were negotiated. The BBC has to try to hang on to whatever it can and BSkyB cannot afford to lose the foothold it has expensively built up over the years.

It all adds up to good news for football.

There is speculation that BSkyB tried to bypass the tender process last week by tabling an astonishing &£2bn for the Premiership rights at a meeting of the club chairmen last Thursday. But it is more likely that this was more a case of the chairmen talking up the rights.

Premier League chief executive Richard Scudamore is, in any case, determined to do everything by the book – partly because he knows a bidding war will increase the price a broadcaster is forced to pay. Scudamore is drawing up a tender document for the approval of all the clubs, which will then go to interested broadcasters in April. They will be expected to deliver bids by early May and a final decision will be announced in early June prior to Euro 2000.

The FA’s timetable is less determined. But the conflict of interest over Faull and Egan needs to be sorted out as soon as possible.

Tom O’Sullivan was formerly deputy editor of Marketing Week.


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