In addition, Radio First will issue warrants to BSkyB to subscribe for up to 18% of the company’s enlarged share capital, from time to time, exercisable at par at any time for a period of five years. There is no obligation on Sky to provide any funding.
Radio First has already agreed four 50:50 joint ventures with leading English Premier League clubs in order to own and operate commercial, regional digital radio stations. The company intends to complete similar deals with other British clubs. The joint ventures are for a minimum of 12 years.
The service will include up to eight football club-related channels initially distributed regionally to Sky’s growing digital subscriber base, which currently stands at 4.7 million households. The first clubs featured will be Aston Villa, Chelsea, Derby County and Southampton.
In addition to the distribution agreement, Radio First and Sky will undertake joint cross-marketing and promotional initiatives aimed at both listeners and viewers. The stations will also carry Sky News Radio’s news and sports bulletins, and the agreement allows for the sharing of other editorial material.
Last week, Radio First completed a successful placing of 4,550,000 ordinary shares with institutional and other investors to raise GBP3.64 million at a price of 80p per share conditional upon the signing of the agreement announced with BSkyB. That condition now being met the placing will complete and dealings in the new shares is expected to commence 12 March 2001.
Keith Harris, Chairman of Radio First, commented:
Radio First is a dynamic digital radio company. It has found a way to give extremely well known brands, such as top football clubs, a new way of both benefiting from their media rights, whilst exploiting all the opportunities that ownership of a mainstream entertainment radio station offers. We’re looking forward to working with imaginative, professional football club managements in order to produce some special, successful stations.
Adding to this, John Aumonier, CEO of Radio First said:
This is an important step for Radio First. It not only secures an immediate and fast growing audience for our Fan Radio Network, it gives us a partnership with BSkyB which enables us to broadcast our exciting new digital services via the UK’s largest digital delivery platform. We are now focussed on signing up more leading clubs, both nationally and internationally, and building studio in stadia around the country.
BSkyB’s Chief Operating Officer, Richard Freudenstein, said:
This is a great bonus for Sky digital subscribers and football fans alike. Today’s announcement also presents significant advertising and sponsorship opportunities. Our conditional access technology is capable of restricting broadcasts to specific groups of viewers and so allows for highly-targeted messages.
