He turns, he shoots, he scores - on broadband

It is the summer of 2004 and the soccer season is nearing its climax. Liverpool have beaten Manchester United 1-0 with a victory that delivers the championship to Merseyside.

Three days later, a businessman, abroad when the crucial match took place, enlivens a dreary meeting by logging on to the Liverpool broadband website via his Wap phone and watching a clip of Robbie Fowler's spectacular winning goal.

This kind of scenario is often touted by Wap companies in sales pitches for a technology that has yet to reach fruition.

But, thanks to a series of joint venture deals between football clubs and media companies, it has every chance of becoming reality.

Last week Liverpool and Granada Media announced a joint venture, Liverpool FC Broadband. It will offer clips of goals and delayed showings of games across all digital platforms once the next Premier League media contract comes into force in the 2001/2002 season. Granada paid Liverpool £20 million sterling (€32 million) and will hold a 50 per cent stake in the new business.

"We're bringing together our brand and our content with Granada's technology," says Mr Rick Parry, Liverpool chief executive.

"If we can get millions of our fans worldwide to use the portal, there is an opportunity to create something of real value, as well as generating revenues for the club long-term."

Liverpool is not the first club to enter into such an agreement with a media partner. In March, Chelsea Village, which owns Chelsea, agreed a deal with British Sky Broadcasting to form a company responsible for the development of a Chelsea broadband portal. The pay TV group would hold a 30 per cent stake upon a market flotation of the business, which is planned within two years.

The exact value of the partnership has not been revealed, but it represents part of a £50 million sterling investment in the club by BSkyB.

More recently, Leicester City and NTL, the US-listed cable operator that owns the former Cablelink in the Republic, established a company with similar online ambitions, with NTL contributing £6 million of funding. Meanwhile in Scotland, NTL has invested £21 million in a joint venture with Glasgow Rangers.

Manchester United, the world's richest club, has yet to finalise its broadband strategy. But it is perfectly placed to capitalise on its groundbreaking £30 million sponsorship deal with Vodafone. The global telecommunications group will help the club develop its own portal. This has the potential to be enormously valuable because of United's position as the English club with the largest domestic and overseas supporter base - some estimates put the number of its fans worldwide at 20 million.

There are compelling reasons for clubs to embrace the broadband future. "Strong brands drive traffic on the Internet and there is no stronger brand, at least among men, than the football club," says Mr Alan Jacobs, a managing director at Schroder Salomon Smith Barney, the investment bank that advised Liverpool on the Granada deal.

The clubs are also motivated by their need to continue growing their revenues to cover ever-rising costs. Transfer fees and player wages have soared to such an extent in recent years that English clubs are hungry for cash to remain competitive with their European counterparts.

Only last month the world transfer record was broken twice. First Lazio bought Hernan Crespo from Parma for £35 million. Then Real Madrid paid £40 million for Luis Figo from Barcelona on reported annual wages of more than £3 million.

Such sums have so far proved beyond the reach of English clubs, but nonetheless the fees paid for players and the wages they command continue to climb. The Premier League's combined turnover rose by 18 per cent to a record £670 million in the 1998/99 season, but this growth rate fell short of the rise in salaries, which climbed 31 per cent to £397 million.

Top English clubs will be helped by new money from television rights. The Premier League agreed a £1.6 billion three-year media deal in June with a group of broadcasters that will run from 2001-2004, but with initial payments arriving this season.

Even with sums of this magnitude, the big clubs still feel a need to keep the money coming in - hence the recent broadband deals, the proceeds of which will go straight into transfer fees and wages. "The £20 million from Granada is not going to be wasted," says Mr Parry. "It's a case of building and strengthening the squad, and legitimately so. Team success is vital to the success of the portal."

However, the extra cash will not only go on expensive transfers (Liverpool has spent almost £50 million in the past two years), with £3 million of the Granada money allotted for improvements to the club's training complex.

Media companies have an equally strong incentive to form companies with the clubs. BSkyB has agreed to pay £1.1 billion for the rights to cover live matches for three years as part of the new broadcasting deal - NTL will pay £328 million for pay-per-view rights during the same period - but when that contract expires in May 2004 the English football landscape will be quite different.

Premier League clubs are likely to lobby for changes in their next media deal to allow them to retain the right to show pay-per-view games over the Internet.

The next contract contains no such provision partly because technology does not yet permit video broadcast on the Internet of sufficiently high quality. But in two years time that will no longer be the case, with analysts predicting quicker take-up of broadband, enabling better quality video on the Internet.

Analysts estimate that about 30 per cent of US Internet users will have broadband access by 2002, and take-up in Europe will be not far behind. If pay-per-view games of sufficient quality were available on the Web, the benefits for clubs with a strong global fan base and their media partners could be limitless.

Exploring the capabilities of the technology now rather than later, as Liverpool and Granada have done, is the best option.

But however attractive it seems now, selling pay-per-view matches on the Web from 2004 is not a scenario the clubs will openly admit they are considering, because of the Premier League's collective bargaining structure.

Mr Parry says: "If pay-per-view on the Internet is a way of bringing more revenues into the Premier League pot, then fine. But we are not in the business of undermining the fabric of the league."

By 2004, with high-quality video pictures on the Internet available to millions around the globe, the stakes will be so high that the allegiance of many clubs to the league's collective ethos will be under severe strain.