U.S., Brit investing: Right or blight?

AOL TW interested in investing in UK TV

LONDON — American and British TV execs launched a war of words over the thorny issue of possible U.S. investment in Blighty’s free-to-air TV stations on Tuesday.

AOL Time Warner CEO Richard Parsons declared his interest in buying into one of the commercial broadcasters, but BBC director general Greg Dyke called the U.K. government “naive” for encouraging the concept during key speeches at the Royal Television Society conference in London.

AOL TW is the second U.S. firm, following Disney, to publicly address the issue after the government announced it wanted to lift the ban on non-European ownership.

Parsons said he regarded the U.K. as one of its key beachheads and that Europe was atop its shopping list. AOL Time Warner employs 10,000 in Europe, half in Britain.

But Parsons said there was unlikely to be a “stampede” to bid because of the low level at which some media assets were trading.

“Do we need a U.K. broadcast network? No. Would we benefit from and bring value to a U.K. broadcast network? Yes, under the right circumstances,” he said

No ‘dumping ground’

Parsons was also keen to allay fears that an American company would offload U.S. fare on to ITV or Channel 5, two of the networks that could be snapped up by a U.S. media group.

“It’s a curious notion that if a U.S. company acquired a British network, it would become a dumping ground for ‘I Love Lucy.’ That would be the fastest and most effective way to lose money. What people want is quality programming which is relevant to their sensitivities and relevant to their lives,” he said.

“Our approach,” he continued, “is to expand internationally in partnership with someone who has expertise and sensitivities and knowledge of how business is done in the local market. What we bring is expertise in production and the quality of our infrastructure.”

However, Dyke questioned the motives of U.S. companies that want to get into a mature industry like British commercial broadcasting.

‘Naive’ thinking

“When I ask why they (the government) believe in this proposal they tell me it will bring new investment, drive and energy into British television. That’s possible, but I think it is a bit naive,” he said.

“U.S. companies won’t buy to invest, assuming they want to buy at all. They’ll buy if they can increase their own profitability by reducing investment in U.K. programming and selling more of their own U.S. programs into this market.”

He asked the government to weigh its decision on non-European ownership, warning that once the decision is made “there is no going back.” He added that the “cultural arguments” for continuing the current regulations outstrip the “spurious economic arguments” in favor of the changes.

Dyke supported the proposal from producer David Puttnam’s parliamentary panel — set up to examine the law change — that the new regulator Ofcom should undertake research and consultation before making recommendations to the government.

Another key issue addressed at the RTS confab was whether it was important to have a British-based international media giant. Dyke said he was not convinced that “if you want a strong, flourishing, creative U.K. TV industry, that the race to be an international media player was worth winning.”

He cited media casualties such as bankrupt Teuton TV giant Kirch and financially challenged Vivendi-Universal as well as Disney, AOL Time Warner and News Corp., which have all reported record losses.

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