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Friday, September 11, 1998 Published at 11:30 GMT 12:30 UK

Business: The Company File

Arsenal and Carlton line up against Murdoch

Worth their weight in silver? Arsenal lift the FA Cup

English Premier League club Arsenal has confirmed it engaged in talks with television company Carlton Communications over a possible alliance.

Carlton issued a statement to the London Stock Exchange on Thursday morning saying preliminary talks with champions Arsenal about an alliance were under way.

Arsenal would not say whether discussions included any talk of takeover.

Business correspondent Rory Cellan-Jones says a takeover is unlikely
The move comes after Manchester United confirmed they had accepted a £623m takeover bid from another broadcaster, BSkyB.

Any link-up would help Carlton shore up its chances of securing lucrative broadcasting rights as pay-TV heads toward digital services.

A statement from the Arsenal said: "The board of Arsenal FC confirm that it has held preliminary discussions with Carlton Communications plc concerning a range of ways in which the two companies might work together."

Going up

Arsenal could be valued as high as £275m if Carlton decide to launch a takeover.

[ image: Too small: Arsenal's Highbury ground]
Too small: Arsenal's Highbury ground
The club's worth has already shot up by more than £60m to £224m since the BSkyB deal with Manchester United was unveiled.

Carlton's founder Michael Green has been a major force in British television since he won the London ITV licence six years ago.

And Carlton is joint owner of ON digital, the new pay TV service due to launch before Christmas.

Fans at Highbury give a mixed reaction
So if Carlton owned Arsenal, it could tempt subscribers with exclusive coverage of Arsenal games.

Most Arsenal shares are owned by directors of the club, with only a minority of shares available on the open market.

The Gunners' largest individual shareholder is one of the directors, Danny Fiszman, a multi-millionaire.

But the highest-profile member of the board is vice-chairman David Dein, formerly the largest shareholder, who still holds the third biggest stake.

[ image: Michael Green: Major TV force]
Michael Green: Major TV force
It has been reported that any deal would see Carlton buying most of the stakes held by Dein and by chairman Peter Hill-Wood, but Fiszman would keep most of his.

Dein would remain the man running the club.

Arsenal are known to be desperate to find a solution to the problem of the limited capacity at their Highbury stadium in north London.

Its size and facilities now lag behind Old Trafford, home of rivals Manchester United. A cash injection from Carlton - which runs the weekday commercial television service in London and has widespread media interests - could change this.

This season Arsenal are playing their European Champions' League games at Wembley.

Former Arsenal manager Terry Neill says a deal would benefit the club
The former Arsenal manager Terry Neill, said he was not surprised by the move and any deal with Carlton could provide the club with more money to buy top players.

He said: "I have every faith in the directors who are at Highbury handling something like this totally appropriately."

Former Arsenal striker Alan Smith says more clubs may follow
Former Arsenal striker Alan Smith was also unsurprised. He predicted that more top clubs would follow Arsenal and Manchester United in looking for new investment.

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