MEDIA: Tackling the team channels

Manchester United has kicked off a broadcasting battle by launching its own TV station. Anne-Marie Crawford reports on how the deal could affect British football and television.

Manchester United has kicked off a broadcasting battle by launching

its own TV station. Anne-Marie Crawford reports on how the deal could

affect British football and television.



Man United was always likely to be the first British football club to

launch its own television channel. Arguably it is the most famous and

commercially minded football brand in the world.



The club is valued at pounds 440m and its last reported profits were

pounds 27.6m.



It has an income of pounds 20m through merchandising alone. It now

believes it has the marketing muscle to become a media owner.



Its new channel, MUTV, is initially likely to attract 10% of United’s

3.3 million UK supporters and the club will be hoping to cash in on

fresh advertising and sponsorship opportunities.



An attacking defence



The channel, which is owned by Manchester United, BSkyB and Granada

Media Group, will be a subscription service available from next autumn

on digital satellite and cable services.



Initially, it will not carry live Premier League matches as those rights

belong to BSkyB under a deal which runs until 2001. But in due course,

observers say MUTV is merely a forerunner for pay-per-view on live

matches.



Thanks largely to investment by satellite broadcaster BSkyB, UK football

has been transformed. Today, talented internationals are falling over

themselves to play in the Premier League and football has become both

lucrative and fashionable.



It was surely only a matter of time then, before the top clubs decided

to strike out on their own in a bid to wrest some of the power away from

BSkyB and reap even more of the riches for themselves.



What all this means for advertisers is still not entirely clear.



A club spokesman says that MUTV will take advertising and points out

that the lifestyle element of the channel, which will be supplied by

Granada, will make MUTV appealing to advertisers such as Coca-Cola and

McDonald’s.



He says the channel should break even in three years.



But, when it comes to subscriptions, observers such as Bill Barker, head

of broadcast at JWT, question how many viewers will be prepared to

pay.



MUTV will of course mean more fragmentation, while also offering a

tightly defined audience. The cost of buying ratings points will come

down, but the cost of delivering coverage will rise.



While more power will ultimately pass into the hands of the clubs, many

will still choose or even need to tap into Sky’s marketing, broadcasting

and subscriber management expertise.



Fashionable clubs such as Chelsea and Newcastle are laying plans to

launch their own TV channels. Big names such as Liverpool and Arsenal

are also keen to grab some of the action. In time, the top ten clubs

will probably all have their own channels.



Division in the league



But the crunch for these football team channels will come when Sky and

the clubs sit down to negotiate the rights to the Premier League after

2001, when the current contract runs out.



Sky paid pounds 670m for the rights to the Premier League in a five-year

deal beginning this season.



Clubs which have established their own television channels may want to

negotiate their own exclusive deals, or opt out completely from a

Premier League package. That could leave smaller clubs, isolated and

unattractive to Sky.



Manchester United has kicked off a move which could signal the end of

the Premier League in its present form, and an even tougher battle for

smaller clubs to compete in the big league.



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