WSJ/ Dow Jones Newswires: PCCW In US$108M Sports Content, Gaming Deal For NOW
January 1, 2002
Dow Jones Newswires
HONG KONG -- Pacific Century CyberWorks Ltd. (PCW) said Wednesday it signed a series of contracts worth US$108.4 million to bring sports programming and games to its Network of the World television and broadband channel and involve itself in online gaming.
PCCW, Hong Kong's dominant fixed-line telecommunications provider, agreed to pay US$48.2 million in shares to television production company Trans World International to bring sports footage to PCCW's Network of the World broadband channel in Hong Kong and elsewhere in Asia over the next 10 years.
"The transaction and the new arrangements will allow the company to secure and produce sports content targeted at the Asian market in the lead up to the staging of the football World Cup in Korea and Japan and the Olympic Games in China," the company said in a paid announcement.
A PCCW spokeswoman was unable to confirm whether NOW would obtain broadcast rights for either the World Cup or the Olympics.
The contract replaces a 10-year accord signed in 1999 for TWI to provide English-language content for NOW, PCCW's broadband channel. A PCCW subsidiary will also pay an estimated US$11.15 million to finance redundancies and contract cancellations resulting from the termination of the earlier contract.
PCCW also agreed to pay TWI US$19 million over four years for consulting services in acquiring sports content for NOW from other suppliers.
The Hong Kong telecommunications company will also buy a 10% stake in TWI subsidiary Leverlake for US$30 million with an option to increase the shareholding to 40%. Leverlake, formed last November, provides online games via subscriptions and produces games television programs.
PCCW didn't say what sort of sports programming TWI will provide.
Last year it made a HK$3.23 billion provision for losses at NOW. It cut back spending on the unit and laid off 340 workers to provide less original content and narrow its marketing to Asian audiences.
TWI agreed to hold its 175 million new PCCW shares until Dec. 31, 2003 unless PCCW's shares close at HK$3.60 or higher on five consecutive trading days. The shares were issued at a price of HK$2.15 each, their average closing price for the five trading days ended Dec. 31, 2001.
PCCW shares ended 2001 at HK$2.15, unchanged on the day and down sharply from the HK$4.95 it began the year at.
-By Hong Kong Bureau, Dow Jones Newswires; (852) 2802 7002; djnews.hongkong@dowjones.com
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