UKTV fights whisperers in struggle for Channel 5

The Covent Garden offices of UKTV, the leading bidder for the Channel 5 licence, look like a high-class squat. There are computers on desks, boxes of press releases cluttering the hall but no decoration, no character. There is, indeed, a pervading sense of impermanence.

Hardly suprising perhaps, as the man driving UKTV, David Asper, lives in Winnipeg, Canada, commuting back and forth to London.

Moreoever, most of the partners of UKTV are based outside the country, brought together simply by the attractive prospect of running a national television channel.

But perish the thought that their bid is anything but serious. Mr Asper, following weeks of silence, is Messianic on the subject of television generally and UK TV's strengths specifically. Having initially left his competion room to fight the public relations battle he has now realised he must join in.

"It took some time getting used to, that's for sure," Mr Asper says of the fierce whispering campaign mounted by the various competing bidders for Channel 5. He is now ready to talk - with a vengeance.

"It's like a check list, " he says of the PR onslaught mounted by Virgin TV and Channel 5 broadcasting, the principal competition.

"You write to the PR firm saying we need a campaign to say the high bidder overbid. Number two, attack their programming as being ridiculous. Number three, find out anything else you can attack them on. Number four, who are the personalities, and can we destroy their credibility."

Mr Asper plays the aggrieved party with undeniable charm, his incredulity at the gall of his competitors rendered all the more convincing by the suppressed outrage that colours his otherwise flat Canadian tones.

Betraying his lawyer's training, he speaks in lists, and in long, well- constructed sentences, keeping little back. Looking younger even than his 36 years, he exudes a certain authority, most obviously when he cuts off a colleague who has interrupted him.

His sudden loquaciousness suggests he realises the competition has UKTV on the run. For, indeed, it appears to be the view of most of the industry that the consortium overbid when it offered pounds 36m a year over 10 years for the right to own and operate Britain's last terrestrial channel. Moreover, many feel its programming schedule is weak, and too dependent on co-productions with Canada and Australia.

Even the members of the UKTV group - independent producer SelecTV, Scandinavian Broadcsting System, Australia's Ten Network, and Mr Asper's own CanWest Global Communications - attract criticism of the kind designed to undermine their chances of winning the auction.

On programming, Mr Asper rejects the criticism with some anger. "Has anyone read our submission to the [Independent Television Commisison]?" he asks rhetorically. "We provide a very detailed schedule, in explict detail, significantly more so than any of the other applications."

He also defends the co-production approach, whereby programming will be commissioned in partnership with producers in other countries, allowing UKTV to reduce costs.

"This is the future of independent television," he claims. The approach allows UKTV to establish a programming budget of pounds 75m to pounds 85m a year, far lower than the competition.

On the matter of overbidding, Mr Asper dismisses the charges with a wave of a hand.

"We have been working on this for several years, since the last time the ITC invited applications for Channel 5 [abandoned in 1992]. Our bid was based on the most conservative model."

According to CanWest's own figures, it intends to have a 6.6 per cent share of audience in homes able to receive Channel 5, rising to 11 per cent by the end of the licence period.

Mr Asper points out how underdeveloped the UK market is. "In Winnipeg, we have five mainstream broadcasters, 80 per cent cable penetration and a population of 650,000 and we make pretty good money. In the UK, you have one mainstream commercial broadcaster, 20 per cent cable penetration and one of the most highly developed advertising markets in the world."

Intriguingly, little of the industry criticism appears targeted specifically at CanWest, the Canadian broadcaster that controls Global Television, established 20 years ago as an embryonic "third force" to compete with the Canadian Broadcasting Corporation and CTV, the Canadian equivalent of the ITV network in Britain.

Mr Asper's father, Izzy, has played a leading part in developing Global nearly since its inception, and helped pioneer the mix of popular US programming and domestic content that is still the recipe for profitability in the fragmented Canadian TV market.

David Asper joined the "family firm" rather late in the day, having spent several years as a successful trial lawyer. He gained prominence in his own right defending David Milgaard, a man wrongly accused of murder, whose sentence was finally overturned.

Mr Asper did legal work for CanWest's flagship Manitoba station CKND, moving on to handle its international interests, including its 14.9 per cent interest in Australia's Ten Network. The company also has a 20 per cent stake in TV3, a commercial broadcaster in New Zealand and 50 per cent of La Red channel in Chile.

While few can argue with CanWest's ability to make money in television - revenues were C$175.9m (pounds 80m) last year, generating operating profits of C$50.9m - there are still doubts about some of its partners. The principal concern is the amount of foreign involvement in the UK TV bid.

SBS, nominally a European broadcaster, may indeed be controlled outright by US interests. US broadcaster ABC has 23.5 per cent, while US investor Harry Sloan, who intends to take up residence in the UK, owns another 9.7 per cent.

US institutional investors owned a further 35.3 per cent of the company as of 31 March 1995, according to filings to the Securities Exchange Commission.

Mr Asper concedes there may be a problem with both SBS and Ten Network, in which CanWest has a 14.9 per cent voting interest but a 57.5 per cent economic interest. Accordingly, the CanWest consortium has parked shares with UK trustees, who will vote the non-European stake in Channel 5 in the event the ITC disqualifies some of UKTV's backers.

Mr Asper's openness about the terms of the bid suggests he is not intending to take any further criticism lying down. Realising it can't beat the competition by keeping mum, CanWest, finally, is on the offensive. The home stretch of the race for Channel 5 has begun in earnest.