U.S. Firms Join in Bidding for British TV Franchises

Several American entertainment giants, including NBC, Walt Disney Co. and Time Warner’s Home Box Office, emerged Wednesday as competitors in the multibillion-dollar bidding war for lucrative commercial television franchises in Britain.

The U.S. companies, all participating as part of consortia formed specifically to seek the 10-year Independent Television licenses, were among the dozens of entrants plunging into the murky waters of the British ITV franchising system.

Contestants angling for one of the 15 coveted regional franchises, or for the license to produce the national breakfast news program, were required to submit secret bids by Wednesday noon. Forty sealed offers were filed by the deadline.

Franchises will be award to the highest bidders--provided they first pass a somewhat vague “quality threshold” test. The quality assurance aspect was added to the rules after critics complained that selling the airwaves to the highest bidder was likely to result in heaps of low-budget programming.

Those submitting entries Wednesday had to file thick documents containing business and programming plans along with their secret bids.

Copies of the programming plans will be made public later this month. Then, around late July, the Independent Television Commission, the commercial TV regulating body, will decide who has passed the quality threshold. Finally, in October, the licenses will be awarded.

Although bidders have been obsessively secretive about financial information, industry analysts believe that the most prized ITV regions will command bids of about $700 million over the life of the licenses, which go into effect in 1993.

ITV, which is divided into regions that broadcast much of the same programming, is one of two commercial channels in Britain. The other, Channel 4, is not divided into franchises. The country’s other two terrestrial channels, BBC1 and BBC2, are funded by the government.

While current franchise holders in three ITV regions found themselves filing uncontested bids, the grappling in other regions appears to be intense.

Both NBC Europe Inc. and a unit of Walt Disney Co. joined separate consortia in an attempt to capture the daily morning show slot. Breakfast TV in Britain, now produced by a company called TV-am, is not unlike NBC’s “Today” show or its network rivals.

The NBC team, “Daybreak Television Limited” and the Disney group, “Sunrise Television,” say there is room for tremendous growth for a breakfast show and claim they can provide programming that will draw more Britons to the telly each morning.

“It’s a great business opportunity,” said Etienne de Villiers, managing director of the Disney subsidiary. Among the companies participating with NBC are Britain’s well-entrenched Independent Television News, which currently provides the nightly news for the ITV stations; the Daily Telegraph, Britain’s best-selling broadsheet newspaper, and the film and television group Carlton Communications.

Disney is joined by a newspaper and TV company, the Guardian and Manchester Evening News, as well as London Weekend Television, which currently holds one of the two regional franchises serving London, and Scottish Television, which holds the ITV franchise in Scotland.

HBO has entered the fray much more gingerly. The cable-TV company has agreed to take a $26-million stake in an incumbent franchise holder, TVS Entertainment, but only if the troubled British broadcaster first retains its license.

TVS holds the franchise for an especially lucrative region in the well-to-do south of England. But the broadcaster made a massive blunder buying the U.S. production company MTM Entertainment for $320 million in 1988. Known then for making intelligent shows such as “Hill Street Blues,” MTM’s fortunes soured soon after TVS arrived, and it has been a huge drain on the parent company ever since.

TVS had been trying to sell MTM but pulled it from the market after failing to find a buyer that would pay more than $70 million.

The fight for TVS’ franchise is among the most intense, with three bidders trying to overrun the incumbent’s turf, including a consortium led by Richard Branson’s innovative Virgin Group and TV figure David Frost. The Branson-Frost group, which includes the U.S. broadcasting company Chris-Craft Industries, is also bidding for the weekday London franchise now held by Thames Television.

Denver-based cable company United Artists Entertainment is part of a group bidding on HTV, the franchise serving Wales.

Hoping to restore confidence in his company, TVS Chairman Rudolph Agnew appeared at a press conference Wednesday to announce the conditional cash infusion from HBO and several other companies.

Although HBO and TVS have co-produced shows in the past--movies about Simon Wiesenthal, Edward R. Murrow and Nelson Mandela among them--the current agreement covers only financing, with no joint programming provisions.