Independent attacks RTE link-up with BSkyB as 'flying in face of logic'

The head of Independent News & Media's Irish operations, Mr Gavin O'Reilly, has initiated a strong attack on RT╔'s link-up with BSkyB which will see RT╔, Network 2 and TG4 transmitted over the Sky satellite system. There has been speculation that RT╔ may pay BSkyB up to £6 million (€7.62 million) for transmitting the three stations.

Independent owns 50 per cent of the Chorus cable television company and together with NTL currently dominates the Irish cable television market. Neither Chorus nor NTL receives any fees from RT╔ for carrying the three channels on their cable systems.

After yesterday's Independent extraordinary general meeting, which approved the radical restructuring of its Australasian media activities, Mr O'Reilly said: "It flies in the face of commercial logic that both NTL and Chorus should be regulated by the ODTR the telecoms regulator, are paying licence fees to the Irish Government, are major employers and then somehow RT╔, an agent of the State, does a deal with BSkyB. It's a remarkable turn if two regulated and licence-paying Irish companies are put at a competitive disadvantage in favour of an unregulated and unlicensed BSkyB," he said.

He added, however: "I'm sure that the Government doesn't want to disadvantage indigenous cable television companies to the advantage of Mr Murdoch." Mr O'Reilly said that Chorus was seeking clarification of the terms of the RT╔/BSkyB deal. "We would argue against the logic of the deal between Sky and RT╔."

Mr O'Reilly also dismissed weekend media speculation in the UK linking Independent with a bid for the Times. "It's new to me, and it's wrong, absolutely wrong." He added: "I can't see any reason why we'd wish to acquire the Times, it's a very curious story."

Yesterday's Independent e.g.m. approved the proposed restructuring which will see the group's 40 per cent-owned Australian associate APN buy Independent's wholly-owned New Zealand subsidiary Wilson & Horton for €690 million. An APN share issue to fund the deal will see Independent's stake in the Australian associate rise from 40 per cent to 45 per cent. The takeover is subject to the approval of APN's other shareholders who meet on Friday next to vote on the takeover. This is expected to be successful although there has been comment in Australia that APN is paying too much for Wilson & Horton and that the deal is more beneficial for Independent than for APN.

Mr O'Reilly was cautiously optimistic about the prospects for the Irish newspaper operation next year and added that if the US economy began to recover in the second half of 2002, the Irish economy would respond more quickly than any other EU economy.

"The media industry is a leading indicator of the prosperity of the country," he said.

He added that newspaper publishers would benefit next year from a fall in newsprint prices. Prices rose about 15 per cent last year. "All publishers will be looking to get their pound of flesh back from the newsprint suppliers," he said.