Leeds United yesterday became the latest top football club to join forces with a media group when Leeds Sporting, its parent, sold a 9.1 per cent stake to British Sky Broadcasting (BSkyB) for £9.2 million sterling (€14 million).
Under the terms of the deal, which is similar to the recent £22 million sterling investment in Liverpool by Granada, BSkyB will pay Leeds an additional £4.6 million cash as a "fee" to become its exclusive media agent on all deals except those involving Premier League rights, which are negotiated collectively by all 20 clubs.
Following the Leeds move, the satellite broadcaster will have to reduce its 11 per cent stake in Manchester United to comply with regulations banning individuals or companies from owning more than 10 per cent of more than one club.
The Manchester United holding is left over from the broadcaster's attempt this year to acquire the club in a £623 million sterling take-over that was blocked by the British government on the advice of the Competition Commission.
It was the failure to gain control of football's biggest club that prompted BSkyB to consider acquiring minority stakes elsewhere. By joining forces with more than one club - BSkyB is already a partner with Manchester United in its MUTV television channel and is considering links with other clubs - the broadcaster hopes to gain an advantage over rivals ahead of the renegotiation of a new TV deal with the Premier League.
The current £670 million sterling four-year contract expires in 2001, but negotiations for a new deal are expected to start within the next year.
In the equity deal with Leeds Sporting, which requires shareholder approval, BSkyB has agreed to subscribe to 30.6 million new shares at 30p each. In return for the investment and the additional cash injection, it will gain a place on the board, plus 30 per cent of any additional media and commercial revenues it generates on Leeds' behalf.
