The best feud in town

THE OTHER day, David Elstein, director of programmes at BSkyB, was speaking at a conference on the future of television. As he discussed Sky's investment in Bristish films, he was asked how many Oscar nominations the films had received.

"More than him,'' was his odd riposte.

This non sequitur was immediately understood by the delegates who are accustomed to, and entertained by, what has become the biggest war of words in British television. David Elstein was vying for Oscars with Michael Grade, chief executive of Channel 4.

It is doubtful whether even actors would be so competitive. In the exaggerated chumminess of TV, where even top executives become infected with luvviness, the Grade v Elstein hostilities are famous and rather refreshing. Michael publicly calls David ''one of Murdoch's minions''; David says Michael is abusing his position. David snatches C4's Oprah Winfrey show in a secret auction. Michael explodes with anger and declares: ''Once again Sky's claim of offering viewers choice turns out to be anything but that.''

The battle seems to stretch into most corners of the two gentlemen's remit. Sky sports service is a ''rip off" says Grade, who tried hard to trump Elstein's Premier League coup by introducing Italian football to C4. Grade publicly berates Sky for its ''endless succession of violent and exploitative films''. Elstein notes that Grade skates on thin ice following C4's recent Red Light Zone ''porn'' series.

But it is Rupert Murdoch, owner of Sky, not Elstein, who is really Grade's bete noir. Grade has an obsessive distaste for the way Murdoch's tentacles reach over the media, and he is one of the few senior figures in television to say so openly and frequently. But Murdoch is in America and untouchable. Elstein is his representative on earth.

''Michael calls me one of Murdoch's minions,'' Elstein says, ''but I see Rupert Murdoch for 30 minutes a year.''

These two famous enemies have taken different routes to the top. Grade was once managing director of BBC1, before he became frustrated with bureaucracy and decamped to C4 in 1987. Grade, a populist programmer, surprised everyone by not only upholding C4's reputation for minority programmes, but also by continuing his success as the sharpest scheduler in television. And, most importantly, he invested in new British films for C4's Film on Four seasons. He has a touch so sure that he can boast of his input into Four Weddings and a Funeral, The Crying Game and The Madness of King George.

Elstein joined the BBC as its youngest ever graduate trainee, worked on series including Panorama and The Money Programme, and he wrote two of The World At War programmes.

Some see irony in the two men's positions; namely that Grade, who had no higher education, and has a background in light entertainment, now heads the ''chattering classes'' channel; while Elstein, the Cambridge graduate with a background in some of the best serious post-war documentaries, now runs the channel with satellite dishes. A psycho-logist might well view this as one cause for their rivalry.

The conflict might be fun to watch but the British film industry may become a serious loser if the war worsens. Both men invest heavily in British films. Grade, who now puts in pounds 15 million a year, invests at the crucial production stage and does exclusive deals guaranteeing C4 the first showing. So far, he has not allowed these films to be shown on satellite.

Elstein has also entered the film business. He is spending pounds 10 million over three years, but takes the safer option of funding films once they are guaranteed a release and distribution deals are complete. Nevertheless the money has proved a godsend. And the industry's leading light, Sir David Puttnam, is pleased to declare: ''Sky is the biggest backer of British films''. What Elstein is thought to covet, though, is the right to show C4 films first. He says he doesn't. Grade says he does. Elstein says he would show the films any time and that Grade's anti-Murdoch stance, banning the films from satellite, is damaging to film-makers.

The ban allows Elstein to accuse Grade of harming the British film industry. Sky would pay a film's producers still more if C4 did not insist on exclusive deals. Elstein asserts: ''What C4 is doing is wholly improper. They force British producers to give up revenue that they might have got from BSkyB for Pay TV showings. They make it a condition of their helping to fund a British film that the Pay TV window is closed.'' He maintains, for example, that he would have paid the producers of Four Weddings pounds 600,000 to show the film on Sky, on top of C4's earlier investment of pounds 400,000.

In fact, when payment for licensing rights is taken into account, C4 can be said to have put in pounds 800,000. But Elstein's argument is making the movie industry think. Sir David Puttnam's championing of Elstein could prove to be significant.

The abuse will doubtless continue. It is hard to know what the agenda is. One veteran media watcher thinks that Grade might even be preparing his own satellite film channel. Meanwhile the film industry watches, worried and bewildered. !

THE FEUD

What they say about each other:

GRADE: Mr Elstein is well known to you, well known to me and even better known to himself

ELSTEIN: He is abusing his position as chief executive of Channel 4

GRADE: They (Sky) have taken something which the public gets free and are going to charge them a fortune for it

ELSTEIN: Mr Grade, as ever, cannot understand what choice is all about

GRADE: Such coarsening of public taste must undermine what public broadcasting has established over decades

ELSTEIN: Grade has allowed his deep hostility to BSkyB to affect his judgement