LONDON (Brand Republic) – Plans by German pay-TV group Kirch to sell the UK live TV rights to the 2002 World Cup to the highest bidder have been quashed by the government.
Kirch -- which bought the global rights to the tournament from football’s governing body Fifa for £821,000 -- has been demanding up to £171m from UK terrestrial broadcasters ITV and the BBC, who have been battling to broadcast the matches. It also wants to open up the bidding to pay-TV rivals ONdigital and BSkyB.
Chris Smith, trade and industry secretary for culture, media and sport, has stepped in because of a clause in the 1996 Broadcasting Act which stipulates that certain events dubbed the “crown jewels of British Sport” -- which include the World Cup -- must be televised on free-to-air channels.
The BBC and ITV are expected to pay no more than £40m for the rights. In 1998, the UK rights to the World Cup cost £4m.
Meanwhile, Swiss sports marketing agency ISL, which is currently involved in the sale of the World Cup rights, has been put up for sale.
Bids are expected from the Interpublic Group of Companies, home to ISL rival Octagon, and Omnicom, which has recently raised $500m from a bond issue.
ISL sits alongside Octagon and Mark McCormack’s IMG among the top three sports marketing agencies in the world.
News of the sale comes after ISL recently agreed a 10-year $1.2bn deal with the Association of Tennis Professionals to run the ATP Masters tournament. The deal financially over-stretched ISL, which had just bought two Brazilian football teams, and it was put up for sale when it looked set to lose money.