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SCMP Reporter

Rivals of i-Cable may spend up to $1b to win bid for new three-year contract as broadcast rights may

turn non-exclusive

Competition among pay-television operators is set to heat up as the exclusive broadcasting rights for

the popular English Premier League (EPL) from the 2007-08 season are thrown open to bids, an

industry source said.

Bidding for the new contract to show  EPL matches for three years from the 2007-08 season will begin

by the end of this year.

If the rights become non-exclusive, the existing broadcaster of the matches, i-Cable Communications,

is sure to face off against rival PCCW Now Broadband TV and its partner, sports channel operator

ESPN, which are keen to broaden content.

The two big players are likely to spend up to $1 billion for the rights, according to sources.

They said that under the new contract, the highest bid would not necessarily get exclusivity.

'The  [Football Association] Premier League is said to be considering breaking up one right in one

country into a multiple-operator approach,' an analyst from a local brokerage said.

If the proposal were implemented, the  EPL would no longer be regarded as a winner in channel

packaging.

Pay-television operators may need to compete on price rather than content offering.

Rights holder the FA Premier League  is said to be working on a new system of match broadcasts

after the European Union launched a formal antitrust inquiry on the exclusivity arrangement of only one

operator per country holding the right.

The  league had made a suggestion that it could implement a formal procedure for tendering new

broadcasting rights ensuring that there are at least two television stations  offering live matches, but

the EU rejected it.

'It is still waiting for the final verdict from the European Union. The  FA Premier League may reserve

the right of appeal to the verdict. It is too early to say what the impact on the local pay TV market will

be,' said Simon Dewhurst, a director of investment banking at broker CLSA.

Mr Dewhurst believed that the final arrangement for broadcasting rights would be the highest-bid

approach.

A market source said losing  EPL exclusivity would not be disastrous for i-Cable. Only about  20 per

cent of its subscribers, or about 170,000 users, were  EPL watchers.

'It won't be negative if i-Cable fails to win the new contract for the EPL broadcasting rights,' a local

broker analyst said.

The  current  EPL broadcasting contract cost i-Cable about $600 million for the three years ending in

May next year. I-Cable may need to add at least 20,000 subscribers per year if the cost of the new

contract rises 10 per cent to $660 million.

'I-Cable's bottom line may not be hurt by the loss of  EPL rights, as it can save up to $200 million

programming cost per year,' the analyst said.

Meanwhile, i-Cable announced yesterday that its investment in film production had been well-received.

The first film, 49 Days, had surpassed the break-even point, company chairman Stephen Ng Tin-hoi

said in a press release.



Battle looms for Premier League deal