Stock rallies as Run Run Shaw's recent pitch to Beijing may lead to lucrative advertising deals Shares in Television Broadcasts have risen 8.93 per cent this week as the broadcaster closes in on a landing-rights deal with Guangdong - the first step towards a potentially lucrative revenue-sharing agreement with the province's cable operators. TVB stock closed up 3.44 per cent yesterday at $39, with 1.86 million shares changing hands. According to sources close to the company, chairman Sir Run Run Shaw recently made a personal pitch to central government officials - and reminded them that Guangdong cable operators were continuing to pirate TVB's signal and advertising slots. Operators falling within TVB's broadcast footprint carry its channels and block out its commercials for resale to local advertisers - a practice known as ad-splicing. To better regulate the industry, Guangdong is merging its municipal and township cable systems into a single province-wide operator by early next year. Sources said Beijing was 'shocked' that ad-splicing was continuing and ordered the Guangdong Administration of Radio, Film and Television to step up its landing-rights negotiations with TVB. 'Our landing-rights negotiations have been proceeding faster than we expected,' TVB sales and marketing controller Leung Kin-wah said. 'We believe the picture will become clearer in the next month or two.' Mr Leung declined to comment on Sir Run Run's recent lobbying efforts. Industry observers estimate that TVB's Cantonese-dialect Jade channel has a ratings share of about 35 per cent in Guangdong. But without formal landing rights it cannot collect its share of Guangdong's two billion yuan (HK$1.87 billion) a year television advertising market. However, securing landing rights in Guangdong will not automatically lead to a lucrative revenue-sharing agreement with the Guangdong television administration, under which TVB would finally be able to charge advertisers for access to its mainland audience. TVB's rival, Asia Television, secured landing rights in August 2000 but has taken three years to finalise a revenue-sharing agreement with the administration, the details of which have yet to be released. It is thought that the television administration chose to negotiate first with ATV - which has lower ratings in Guangdong - to secure a larger piece of the pie and establish a precedent for its showdown with TVB. 'We are looking forward to the details of ATV's ad-share agreement,' said a TVB source. 'Once the ATV deal is announced, we can quickly copy the model.' TVB management recently told analysts that it was seeking a 30 per cent share of future advertisement sales in Guangdong. Recent regulations banning the interruption of prime-time programmes with advertising are also a concern for TVB. Instead, commercials will be broadcast only between evening programmes. TVB said it was seeking an exemption from the regulations, which are scheduled to take effect in January. 'We can't afford to produce another channel solely for the mainland,' said another TVB source. 'We also can't remove commercials from our prime-time programming. 'If we are not exempted from the rule, landing rights won't mean much to us.'