23 May 2006

I-Cable to fight for football rights

South China Morning Post
(c) 2006 South China Morning Post Publishers Limited, Hong Kong. All rights reserved.

I-Cable Communications, Hong Kong's largest pay-television operator, will be among the bidders for the broadcasting rights of the English Premier League for the three seasons starting from August next year, according to chairman Stephen Ng Tin-hoi.

I-Cable's exclusive rights to the games expire in May next year and the company will be up against rivals Now Broadband TV and ESPN Star Sports for the rights to the three seasons to June 2010.

The bidding is set to start at the end of this year.

"We will bid for the rights, however unprofitable it may be for us," Mr Ng said yesterday.

Sources said subscription fees and advertising revenue barely covered the bidding costs.

Mr Ng declined to comment on how much the company expects to pay to broadcast the games or the impact on the company if Now or ESPN Star Sports gains the rights.

He said the company was likely to diversify its revenue streams over the next two years to reduce its reliance on the pay-television business, investing in movie productions and development in the mainland.

The English Premier League has been a strong draw for new subscribers with i-Cable paying an average $200 million per season for the rights.

ESPN Star Sports - the regional sports television channel jointly owned by Rupert Murdoch's Star Group and ESPN - holds the broadcasting rights in the Asian market except for Hong Kong, Indonesia and Japan.

Market estimates put the advertising revenue generated directly by English Premier League at between $50 million and $100 million a year.

The company has an estimated advertising revenue of about $200 million from pay-television.

Research firm Media Partners Asia believes i-Cable could lose up to 100,000 subscribers to Now if i-Cable is outbid and loses the rights next year.

However, a successful Now bid will also delay its break-even target. It has estimated the operation will be cash-flow positive this year.

"ESPN Star Sports and [Now] will aggressively bid for the right to strengthen their market position and enhance average revenue per user," said Vivek Couto, an executive director of Media Partners Asia.