London -- Bookies would most likely give British SkyBroadcasting favorable odds to complete its proposed $1 billion purchase of U.K. soccerclub Manchester United, but there's enough of a hint of uncertainty to keep investorssecond-guessing -- even amid strong financial results.
BSkyB will know by March 12 whether it may proceed with theManchester United acquisition. That's the deadline for the U.K. Monopoly & MergersCommission to rule on the deal.
BSkyB's shares have been on a roller-coaster ride duringthe past week, after the chairman of British TV regulator the Independent TelevisionCommission let it slip that he was "personally" against the deal.
The ITC later issued a detailed clarification in which itsaid that any proposed deal "needs careful investigation," and that itssubmission is but one of many that will be made to the MMC.
In addition to the Manchester United bid, BSkyB'sdomination over English Premier League soccer rights is also up for examination, althoughthe Restrictive Practices Court is not due to announce its decision for at least threemonths.
Despite the short-term worries, some expect regulators torule in favor of BSkyB. Morgan Stanley Dean Witter & Co. analyst Vignesh Padiachy, forone, said he expects both the Manchester United and Premier League deals to go through.
"A natural cartel between the [individual soccer]clubs would result, whatever the decision of the RPC. There may be 361 contracts insteadof one, but the result may be the same," he said.
All of this comes amid BSkyB parent News Corp.'s decisionto end talks to buy 80 percent of Stream, the digital pay TV service owned by TelecomItalia.
The company pulled out on that front earlier this month,after the Italian government passed legislation that would have prevented News fromexercising a $2.53 billion bid to control TV rights to Italian soccer.
Despite some uncertainties on the sports front, BSkyB facesparticularly bright prospects in other areas. Investors strongly welcomed the company'ssix-month results, which were released Feb. 10, and they were especially pleased with therollout of its digital-DTH service, which outpaced forecasts.
BSkyB chief executive Mark Booth said the 350,000 digitalpackages that it sold between the service's Oct. 1 launch and Jan. 31 represented growth"faster than [that of] any other digital platform."
He based that on comparative growth rates at DirecTV Inc.,PrimeStar Inc. and EchoStar Communications Corp. in the United States, and at CanalSatellite Numerique and TPS in France. And he boasted that Germany's DF1 "has not yetreached the 350,000-customer mark after two-and-a-half years."
BSkyB has now set a new target of 1 million digital-DTHsales by October. Padiachy estimated that about 638,000 of those will come from new BSkyBsubscribers, while the remainder will come from analog customers switching to the digitalservice.
BSkyB is also optimistic about the introduction of"Open" -- its free interactive service, which is set for an April soft launchand a full commercial rollout in the fall.
"We have taken great pains to create an interactive-TVenvironment that is easy to use, that takes e-commerce to the mass market and that solvesthe problem of accessing these services -- even for those people who are terrified ofprogramming their VCR," Open chief executive James Ackerman said.
Ackerman spent much of the past six months talking withBSkyB's programming partners and suppliers -- such as MTV Networks International, theBritish Broadcasting Corp. and Flextech plc -- about playing off Open.
Booth said these new services and the digital service'sother interactive functions will help to create a market buzz that will push the companytoward the 1 million-subscriber mark.
At the same time, MTV unveiled plans to tap the expandedcapacity on BSkyB's digital platform with the launch of three additional channels.
MTV Base, MTV Extra and VH1 Classic will bow on the digitalservice July 1, alongside existing networks MTV, VH1 and M2. The three new services willroll out on analog- and digital-cable services later.