The biggest mystery playing on U.K. cable this year is whether the eagle will fly.
Last year saw a rush for cable tv franchises. The Yanks were in the vanguard to stake a claim before the Cable Authority closed its doors Dec. 31 and re-emerged this month as part of a new regulatory and licensing body, the Independent Television Commission.
The big question for 1991 is whether the license holders will be able to match their promises with hard cash.
Unlike other U.K. tv licenses, three for cable can be held by a foreign company – and 90% are, mostly by North American MSOs and Baby Bell telephone companies. The problem is recession on both sides of the Atlantic. U.S. cable share prices are half their 1989 value, and banks are more cautious about lending cash. Observers of the Brit cable scene now doubt that the dollars will come through. Many believe there could be a freeze on new cable builds for at least a year.
While some operators, such as United Artists, are reporting success in attracting coin, other key players are hitting brick walls erected by Yank banks.
James Carrabino, veep of investment banker Paine Webber Intl., comments: “1991 will be a difficult year. Build programs will be affected, though in some circumstances it might concentrate more franchises in the hands of those with the capability to build. There are a number of deals in the marketplace, and when it becomes apparent that these plans could run into difficulty, some companies will seek to sell some or all of their portfolios.”