Leeds may be BSkyB target

BSkyB has been linked with a plan to take minority stakes in a host of leading English football clubs, following the failure …

BSkyB has been linked with a plan to take minority stakes in a host of leading English football clubs, following the failure of its attempt to buy Manchester United.

The alternative strategy would give the broadcaster, controlled by Rupert Murdoch's News Corporation, a strong hand in future negotiations over television rights for live football matches.

Analysts said that as long as BSkyB does not take more than 9.9 per cent in any individual club, there is nothing current legislation can do to stop the buying spree. BSkyB refused to comment, but a company insider said it would look at "all football deals".

A source close to one of the clubs named as potential Murdoch targets said BSkyB's ambitions were well known.

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"It is common knowledge in football circles that Murdoch has made it clear to all clubs he would like to take a 10 per cent stake," he said. "If he bought 10 per cent stakes and carved off the broadcasting rights, then he would get what he wanted when he tried to buy Manchester United".

He declined to say who was acting on BSkyB's behalf, but said that some Premiership chairmen were close to the broadcaster.

Leeds Sporting, parent company of Leeds United, which is in talks with Granada, is said to be BSkyB's first target. In a statement, Leeds Sporting said it "has had various discussions with a number of media groups, concerning a wide range of business activities.

"No agreements have yet been reached. Leeds Sporting will make an announcement if, and when, appropriate."

Any new investor would probably need to buy new shares in Leeds in return for funding improvements to the club's ground and team.

Aston Villa, Chelsea, Leicester, Tottenham, Newcastle, Southampton and Sunderland were also named as investment targets for BSkyB, but sources at all the clubs denied they had been approached by the broadcaster.

Mark Ansell, finance director of Aston Villa - where a 10 per cent stake is currently worth some Stg£6 million - said he would not rule out a closer involvement with BSkyB, but said it might not be in the form of a shareholding.

"We have had no detailed conversations with BSkyB on the issue, but we would not be surprised if the group was trying to improve its relationship with football.

"We would have to sit down and look at the details. Mr Murdoch can bring a lot to the table in broadcasting, but there are other broadcasters. We are a big brand in the biggest broadcast product and you should not infer that we want a shareholder."

Much of BSkyB's pay TV success has been built on its exclusive coverage of live Premiership action.

Its current £670 million TV deal with the league, struck in 1996, expires in 2001.

Speculation that BSkyB may buy a stake in Leeds forced the club's shares up 10 per cent to 24p, valuing the club at £74 million.