BSkyB raises stakes in pounds 60m haggle with BDB

The channel line-up of British Digital Broadcasting, the planned digital terrestrial TV service, was in the balance this week as tensions mounted between the two BDB partners, Carlton and Granada, and BSkyB, a key programme supplier to the consortium.

The channel line-up of British Digital Broadcasting, the planned

digital terrestrial TV service, was in the balance this week as tensions

mounted between the two BDB partners, Carlton and Granada, and BSkyB, a

key programme supplier to the consortium.



BSkyB has prepared a writ against Carlton and Granada for non-payment of

more than pounds 60 million-worth of compensation for its enforced

withdrawal from the BDB consortium. BSkyB is reported to have given the

consortium until the end of this month to pay the outstanding sum.



The news that a writ had been taken out, though not yet served, was

leaked from the High Court, causing embarrassment to BSkyB executives in

a week in which Rupert Murdoch, the head of News Corporation, was in

London on business. It could also prove awkward for Granada’s chairman,

Gerry Robinson, who is also the chairman of BSkyB.



The row centres on BSkyB’s involvement in the BDB consortium. BSkyB was

originally a partner in the BDB venture, but was told by the Independent

Television Commission that it would have to pull out of the consortium

for competitive reasons.



Carlton and Granada were to pay BSkyB pounds 70 million in compensation

and the satellite broadcaster was to retain a role in the venture

through a deal to supply Sky programming for the BDB package.



However, speculation has been mounting as to whether BSkyB will be able

to secure agreement to screen Hollywood movies and Premier League

football on digital terrestrial television. Without it, some observers

claim, the BDB package could offer little to tempt viewers.



Nigel Sheldon, the director of MindShare Digital, said Sky programming

such as movies and sport ’will be a key factor in driving the take-up of

digital terrestrial TV’.



News of the writ comes as BSkyB’s share price hits a two-year low. It

dropped almost 7 per cent to 382 pence at the beginning of the week,

after the City firm, BZW, cut its profits forecast for BSkyB.



BZW analysts predicted that satellite dish sales would tail off in the

next two years.



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