Knapp Blames UK Regulators for NTL’s Fiscal Fiasco

09 December 2002

NTL ceo Barclay Knapp does not lack chutzpah. Nor a talent for survival against all the odds.

The latter was evident recently when NTL – still in the throes of a debt-for-equity swap under Chapter 11 bankruptcy protection – announced in the face of investor opposition that Knapp would not only retain his job but enjoy a hike of better than 250% in his $277,000 annual salary to $700,000 [WAMN: 21-Oct-02].

As to the former quality, Knapp now insists that NTL’s descent into bankruptcy under a debt Everest of more than $20 billion (€20.58bn; £12.92bn) was not attributable to mismanagement or paying over the odds to buy-out rivals but the failure of UK regulators to control the dominance of Rupert Murdoch’s satellite operation BSkyB.

“Costs for pay-TV have gone up, while telephony charges have year on year gone down. The conducive regulatory environment in telecoms created competition and consumer choice [but] regulation hasn't caught up yet in the pay TV market,” Knapp told the Westminster Media Forum last week.

“Unlike the telecoms industry, there is no corresponding regulation on the TV side. All the TV regulators have struggled in how they approach a dominant Sky. Of ITV Digital, NTL and Telewest, one of those companies liquidated and two have undergone significant financial restructuring. It’s not solely because of this issue, but it has played a significant part,” complained Knapp.

He urged Lord David Currie, chairman of new telecoms and broadcasting supra-regulator Ofcom, to speed-up decision making. The Office of Fair Trading has been investigating BSkyB’s pricing policy for the past three years.Sky not only dictates the subscription pricing pace but charges other broadcasters handsomely for access to its sports and movie channels.

But, as one observer pointed out, the global media industry is well aware (save, seemingly, NTL, Telewest and ITV Digital) that a long spoon is needed when supping with the devil – or deep pockets in the case of a Murdoch-controlled competitor.

NTL, which currently has 2.7 million UK TV subscribers, has been shedding customers over the past year since its fiscal travails hit the headlines. However, it will return with a vengeance once the restructuring was complete, insists Knapp.

“These are highly competitive products ready to go and ready to compete vigorously against BT and Sky,” he said, adding that the company is set to pass the milestone of 500,000 broadband subscribers by the year end.

And as one forum-goer observed: “When it comes to chutzpah, you can bank on Barclay.”

• Separately, US-owned NTL has inked a £85 million four-year deal with another lame duck, America Online, to offer AOL’s enhanced broadband content to the cable network’s 2.7m British customers. NTL already offers broadband internet connection but with limited exclusive content.

The deal extends AOL’s broadband reach in the UK, currently available only via the BT network. Says local ceo Karen Thomson: “This agreement will give AOL the widest coverage of any broadband service provider in the UK and help us to build a leadership position in the high-speed market.”

Data sourced from: and BrandRepublic; additional content by WARC staff