tops bid

with UKTV

Industry analysts are speculating that the companies making up the CanWest Global Communications consortium are too small to foot the bill, but it’s all systems go says the Canadian broadcaster which emerged as the highest bidder in the competition to pioneer a new national network across the pond.

Up against the likes of Rupert Murdoch, the CanWest consortium bid a whopping $79.5 million for the u.k. television licence. It outdistanced the two tying second-place proposals by more than $33 million in vying for the rights to a network in what is thought to be the last English-language mass-market in need of another terrestrial broadcaster.

According to David Asper, CanWest’s director, special projects, who is frontlining the effort for uktv, the application lays out plans to broadcast 60% original programming and produce two new high-budget series: one a children’s program and the other a primetime action series.

The bidding portion of the competition closed May 2, but the race is far from over. In the next six months, Britain’s Independent Television Commission will look at all four bids to determine which consortium is best able to meet standards for breadth and quality of programming, and has the financial muscle to see a startup network through the rough patches.

The CanWest consortium consists of CanWest, which owns 30%, Scandinavian Broadcasting Corporation System of Stockholm, also backing 30%, Australia’s Network Ten at 20%, and Select tv, one of Britain’s leading production companies, in for 20%.

Coming in behind CanWest in the bidding were two consortiums, ironically placing the same bid of £22,002,000 in what was a sealed-envelope procedure.

One group consists of Pearson pcl of Britain, the corporation that publishes the Financial Times, and Cie Luxembourgeoise de Television, a European broadcaster independently controlled by Montreal-based Power Corporation. The other group includes Virgin Group plc, Philips Electronics nv out of the Netherlands, and Associated Newspapers plc.

Murdoch’s consortium, frontlined by his British Sky Broadcasting Corporation, surprised everyone by coming in with a low £2 million bid.

Although CanWest had the highest bid, media analyst Louise Barton of Henderson Crosthwaite in London is skeptical that the consortium has balance sheets strong enough to withstand the costs involved.

The startup will run a minimum $200 million, says Barton. Add to that programming funds and the cost of retuning the vcrs in about four million homes, projected at over $100 million.

‘(CanWest) placed a knock-out bid, but you have to make the thing work. Theory and practice are two different things, and I think the itc will see the other consortiums, made up of bigger companies, as being in a better position to incur large costs,’ says Barton.

But Asper rejects the speculation, saying the consortium ‘has more financial resources than we could conceivably need. There is more money at hand than the worst-case scenario would make necessary.’

Asper also rebuffs any speculation by British analysts that the consortium may not be able to provide the quality and the breadth of programming the itc is looking for.

CanWest’s bid includes a major international coproduction agreement between Canada, Australia, New Zealand and England. The consortium has also developed relationships with dozens of independent producers in Britain, says Asper. ‘The programming that is in our application is of the highest caliber. I don’t accept any criticism along those lines at all.’

Of the four British networks already established, only one is a commercial broadcaster. BBC1 and BBC2 are both government funded, and the third, although commercial supported, is licensed to provide only special-interest and minority programming.

This setup has translated into enormous production budgets for British programming, but Asper isn’t concerned that the itc will interpret what might look like lower budgets in their application as an indication of lower quality programming.

‘The itc may be inclined to have benchmarks in their mind. But I think our business plan shows how we can create, or cause to be created, programs with similar budgets. Also, it will be at a lower cost to our channel because we’ll be a licensee as opposed to an owner. Broadcasters here actually own the programs, paying 100% of the production costs and take all the rights.’

According to Barton, no bias towards wanting the new network to be British owned and controlled will stand in the way of a Canadian broadcaster coming in.

‘The British are so used to having foreign ownership, it doesn’t matter to them. They hate Rupert Murdoch, but everyone else is okay, and a Canadian company won’t be ostracized.’

Without wanting to be presumptuous, Asper says he will return home for a brief time and then begin solidifying the staff for uktv, which will number about 200 at the startup, if they get the license.

The deadline for launching the new network is Jan. 1, 1997.