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Here's an article I found on <a href="http://www.ft.com:" target="_blank">www.ft.com:</a>
<br />"Granada and Carlton in talks over ITV Digital<br />By James Harding, Media Editor<br />Published: October 21 2001 19:29 | Last Updated: October 22 2001 03:52<br />
<br />The owners of ITV Digital stand to save £750m ($1,079m) if they shut it down and sell on their subscribers to rival pay-TV operators, according to City analysts forecasting a restructuring of the troubled business.
Carlton Communications and Granada, which jointly own the loss-making digital television service, are understood to be discussing what would effectively be a commercial bail-out of ITV Digital.
The digital service has already cost the two companies more than £800m and even though they say it will break even after a total £1.1bn of investment there are growing doubts about its future as a standalone business.
Investec, the investment bank, will on Monday issue a note recommending Carlton and Granada shares on the expectation that the closure of ITV Digital could save the companies £750m, which translates into 56p per share for Carlton and 13p per share for Granada.
Mathew Horsman, analyst at Investec, said: "We believe the industry will come to an accommodation on ITV Digital by the first quarter of 2002. Everyone stands to gain from the restructuring. ITV Digital has been a lead weight on the profits of Carlton and Granada, an irritant to BskyB and problematic for the government."
The Investec calculation is based on growing speculation within the television industry of a two-phase restructuring of ITV Digital.
Under the first phase, Carlton and Granada would agree to shut down the business, selling on its estimated 1.2m subscribers to the three other main pay-TV groups: British Sky Broadcasting, Rupert Murdoch's satellite broadcaster, and the two cable companies NTL and Telewest.
BskyB, NTL and Telewest would each pay a "bounty" for the ITV Digital subscribers.
The second phase of the restructuring involves the government. Whitehall officials together with industry executives from the BBC and other TV operators have been discussing a plan to keep the digital terrestrial signal alive.
This would mean that NTL remains responsible for broadcasting the digital signal and a new company, nicknamed "Boxco", would be responsible for distributing digital set-top boxes.
These digital set-top boxes, which could be subsidised by the government, would enable consumers to get a limited number of BBC and ITV digital channels for free. The BBC and ITV would, therefore, most likely be involved in Boxco.
The government's interest is that Boxco could distribute set-top boxes to all consumers, enabling the UK to become a digital TV market and allowing the government to switch off the analogue signal. The analogue spectrum could then be sold for billions of pounds, government officials hope.
Carlton and Granada have declined to comment on discussions about the future of ITV Digital, except to say that all options are under consideration."
<br />What do you guys think?
<br />"Granada and Carlton in talks over ITV Digital<br />By James Harding, Media Editor<br />Published: October 21 2001 19:29 | Last Updated: October 22 2001 03:52<br />
<br />The owners of ITV Digital stand to save £750m ($1,079m) if they shut it down and sell on their subscribers to rival pay-TV operators, according to City analysts forecasting a restructuring of the troubled business.
Carlton Communications and Granada, which jointly own the loss-making digital television service, are understood to be discussing what would effectively be a commercial bail-out of ITV Digital.
The digital service has already cost the two companies more than £800m and even though they say it will break even after a total £1.1bn of investment there are growing doubts about its future as a standalone business.
Investec, the investment bank, will on Monday issue a note recommending Carlton and Granada shares on the expectation that the closure of ITV Digital could save the companies £750m, which translates into 56p per share for Carlton and 13p per share for Granada.
Mathew Horsman, analyst at Investec, said: "We believe the industry will come to an accommodation on ITV Digital by the first quarter of 2002. Everyone stands to gain from the restructuring. ITV Digital has been a lead weight on the profits of Carlton and Granada, an irritant to BskyB and problematic for the government."
The Investec calculation is based on growing speculation within the television industry of a two-phase restructuring of ITV Digital.
Under the first phase, Carlton and Granada would agree to shut down the business, selling on its estimated 1.2m subscribers to the three other main pay-TV groups: British Sky Broadcasting, Rupert Murdoch's satellite broadcaster, and the two cable companies NTL and Telewest.
BskyB, NTL and Telewest would each pay a "bounty" for the ITV Digital subscribers.
The second phase of the restructuring involves the government. Whitehall officials together with industry executives from the BBC and other TV operators have been discussing a plan to keep the digital terrestrial signal alive.
This would mean that NTL remains responsible for broadcasting the digital signal and a new company, nicknamed "Boxco", would be responsible for distributing digital set-top boxes.
These digital set-top boxes, which could be subsidised by the government, would enable consumers to get a limited number of BBC and ITV digital channels for free. The BBC and ITV would, therefore, most likely be involved in Boxco.
The government's interest is that Boxco could distribute set-top boxes to all consumers, enabling the UK to become a digital TV market and allowing the government to switch off the analogue signal. The analogue spectrum could then be sold for billions of pounds, government officials hope.
Carlton and Granada have declined to comment on discussions about the future of ITV Digital, except to say that all options are under consideration."
<br />What do you guys think?
