Media-rules row rumbles on

Europeans want reciprocity, equal access

LONDON — More and more awkward questions are being raised about the pending relaxation of media ownership rules that will allow non-European companies to own U.K. TV stations outright — and they’re not all being asked by the plan’s opponents.

The government’s scheme to reignite Blighty’s faltering private TV webs by enabling global giants like AOL Time Warner and News Corp. to control key businesses, including the much-diminished ITV net and the newly respectable Channel 5, has become the industry’s key talking point.

Last week, some of the biz’s heavyweights, including AOL Time Warner topper Richard Parsons and Didier Bellens, CEO of pan-Euro broadcaster RTL, discussed the issue with top brass from British TV at a one-day international conference organized by the Royal Television Society.

For those Americans (and American-Australians) who may be sizing up the British market, the talking shop got off to an encouraging start.

The confab’s first speaker, Trade and Industry Secretary Patricia Hewitt, repeated the government’s line that U.S. ownership will bring new investment, drive and energy into British TV.

Perhaps forgetting how Rupert Murdoch’s profits from his British newspaper business helped bankroll Sky, and the huge debts run up by cable outfit NTL, Hewitt suggested that American money had created the U.K.’s satellite and cable sector.

Despite Hewitt’s enthusiasm for Americans, the Americans’ enthusiasm for Brits was not quite so strong as the morning wore on.

Significantly, Parsons, making his first appearance on an international platform since taking over the “challenged” giant approximately 100 days before, was less than upbeat about the prospect of a U.K. takeover bid and suggested that most of his energies were required for “mining the domestic marketplace.”

However, he welcomed the proposed liberalization of ownership and rejected accusations that an American-owned ITV or Channel 5 would make Blighty a dumping ground for U.S. fare.

“The fastest way to lose money is to adopt that approach,” warned Parsons, who revealed his fondness for British TV comedy, singling out “Monty Python” and “Fawlty Towers.”

The way to develop the conglom’s business in Europe was via partnerships along the lines of AOL Time Warner’s stake in German music station Viva.

Parsons suggested that many British media companies were still overpriced: “At the current levels at which some of these assets trade, I’m not sure you are going to have a stampede in the bidding process.”

Meanwhile, the confab’s other key speakers were lining up to criticize opening up the British media to U.S. predators.

Bellens maintained the move would give U.S. groups an unfair advantage over European rivals: “For us the question is one of equal access: Why open up to investors from all over the world, including the U.S. and Australia, when there is no reciprocity? Why give the large U.S. firms an advantage that European media firms do not have in the U.S?

“We are certainly not against U.S. investment in Europe but simply asking for the same treatment.”

Two of Britain’s most seasoned (and richest) broadcasters, Greg Dyke, the aggressive director-general of the BBC, and Christopher Bland, chairman of British Telecom and formerly a key player in both ITV and, more recently, the BBC, were even pithier about the subject.

As an avowed free marketer, Bland surprised many with his opposition. He said the idea had been included in May’s draft Communications Bill without any consultation with the industry. He drew a distinction between “ownership” and “investment.”

“There is a fundamental misconception that foreign investment and ownership are the same. They are not necessarily linked. The idea that it is good for the U.K. is nonsense … Without reciprocity, it is quite simply a diplomatic mistake,” he said.

Dyke, living up to his reputation for being outspoken, adopted an equally strident tone, saying, “In a mature industry like British commercial broadcasting, 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 added: “Remember, this can only be done once … there is no going back. This means the case in favor has to be very much stronger than the case against, and so far, in my opinion, this hasn’t been demonstrated.”

Dyke’s opposition to government policy was remarkable, considering Dyke has often accused of being too close to Prime Minister Tony Blair, having donated money to his leadership campaign. But will Blair and his team listen? The answer is probably not.

As another high-level delegate at the conference said: “When you look at the mess the current owners have made of so much of our TV industry, you begin to understand why the government thinks the Americans can do a better job, provided the right regulatory framework is adopted.”

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