BSkyB issues writ in row over Premier League TV rights

The simmering disagreement between BSkyB and Carlton over the rights to show Premier League football turned into a slanging match yesterday as BSkyB served a writ on Carlton demanding that Michael Green's media group cough up its share of a pounds 60m payment owed to BSkyB. Peter Thal Larsen reports.

Carlton refused to back down, arguing that it would not pay until it was sure that British Digital Broadcasting (BDB), its multi-channel joint venture with Granada, would be able to show live Premier League matches when it launches in the autumn.

A Carlton spokesman said: "We are entirely right not to pay BSkyB in full until they have secured Premier League rights for digital terrestrial television. The Premier League are ready, willing and able to negotiate but Sky has dragged its feet."

The argument stems from last year, when regulators forced BSkyB to pull out of the BDB consortium on the grounds that its involvement was anti- competitive. In compensation, Carlton and Granada agreed to pay BSkyB pounds 75m, while the satellite broadcaster said it would still supply its channels to BDB.

However, Granada and Carlton subsequently refused to pay all but pounds 15m of the agreed sum until BSkyB got the go-ahead from the Premier League to extend its rights to live football to include BDB. Although BSkyB is understood to have offered about pounds 3m a year for the rights, this was rejected. The Premier League is believed to want pounds 15m a year. BSkyB has yet to make another offer.

Granada has since paid its share of the pounds 60m, thereby avoiding an embarrassing conflict of interest for Gerry Robinson, who is chairman of both BSkyB and Granada. But Carlton is holding out.

Yesterday Mark Booth, BSkyB's chief executive, hit out at Carlton's stand. "Obviously it's not the best way to establish a relationship but if they want a fight they can have one," he said, adding: "I can't foresee a scenario that Carlton don't pay. I think they will come to their senses."

Industry experts said that, while BSkyB was on firm ground legally, a refusal to supply BDB with live football could attract the attention of the regulators. "It would be a clear abuse of their monopoly power," said one.

His comments came as BSkyB reported a 4 per cent drop in pre-tax profits to pounds 128.6m in the six months to 31 December. The company ascribed the drop to slower growth in its subscriber base - the number of paying subscribers increased by 349,000 to 6.721m in the period - and the high cost of preparing for the launch of its 200-channel digital satellite service. Earnings per share dropped from 7.1p to 6.8p, while the interim dividend was maintained at 2.75p.

Meanwhile, Pace Micro Technology and Amstrad, two of the four companies which are supplying digital set-top box decoders for BSkyB, both confirmed that they would be ready to supply the decoders in time for the June launch.

Mr Booth confirmed that the digital service would be launched in June, but admitted that the "meaningful" launch would not take place until the run-up to Christmas. BSkyB shares closed up 19p at 361p.