Sports fans will be able to catch the Olympics on free-to-air television after a last-ditch deal between ATV and rights holder i-Cable.
But the agreement did little to ease the war of words between terrestrial and cable broadcasters, with TVB condemning i-Cable's behaviour as 'against the Olympic spirit'.
All hope of a deal between i-Cable, which had at one point expected to receive a licence for a free-to-air channel in time for the games, and its rivals seemed lost last week when talks broke down.
But, amid rumours of pressure from the International Olympic Committee to give the event a wider audience, i-Cable yesterday made a final offer. ATV and TVB would have to pay US$1 for the rights to show the games on their four channels, but would only be allowed to show 400 minutes of their own commercials during the 250 hours of broadcasting, with i-Cable advertising shown the rest of the time.
The pair were given until 5pm yesterday to accept the deal.
While TVB said no, ATV agreed a compromise in which the Games, which start next month, will be shown on its English language channel, ATV World, which has a low viewership. The two sides will now discuss the deal further.
TVB said in a statement that the proposal amounted to 'robbing TVB of its channels and legitimate business interests'.
'[The] offer is unfair, unreasonable and against the Olympic spirit,' the statement said, adding that TVB was prepared to pay a reasonable licence fee to i-Cable for the right to carry the games and for production.
Yesterday's offer from i-Cable was an improvement on one it made earlier, which would have given it the rights to all the commercials airing during Games broadcasts, as it had when it allowed the two terrestrial broadcasters to show four matches from the 2010 soccer World Cup on their digital channels.
Industry sources believe the IOC was investigating i-Cable's audience reach before yesterday's deal was struck.
Rule 51 of the Olympic Charter says: 'The IOC takes all necessary steps in order to ensure the fullest coverage by the different media and the widest possible audience in the world for the Olympic Games'. The organisation's president, Jacques Rogge, said shortly after the rights were awarded that the IOC would be prepared to strip i-Cable of the broadcast rights if its reach was inadequate.
The company claims that 80 per cent of households are technically capable of receiving its services, but just 1.1 million of the city's 2.3 million households subscribe to its channels.
Neither the IOC nor i-Cable had responded to inquiries last night.
The row comes against the backdrop of i-Cable's long-standing bid to run a free television channel. Chief executive-elect Leung Chun-ying yesterday refused to speculate about the final result of the applications by i-Cable and two other companies, two-and-a-half years after they applied for the licences.
Peter Lam Yuk-wah, vice-president of the Televisioners Association, said stations were allowed 10 minutes of ads per hour of broadcasting. Four hundred minutes of commercial airtime for the 17-day event would be too little, he said. 'i-Cable doesn't show any sincerity ... the government may have urged it to do something, and it tried to demonstrate it had done what it can,' he said.
Percentage of households i-Cable claims can receive its services; 1.1 million of HK's 2.3m households subscribe to its channels