City TV Broadcasting beats high-profile candidates to broadcast in UK's second biggest city.
Ofcom has awarded the licence for Birmingham to local player City TV Broadcasting, ahead of high-profile consortiums backed by heavyweights including former BBC Trust chairman Sir Michael Lyons.
City TV Broadcasting, which recently received the backing of Birmingham-born ad man Trevor Beattie, has picked up the licence for what is considered by bidders to be one of the three most important of the 21 cities and towns that have so far been chosen to have local TV services.
Ofcom also on Wednesday awarded the licence for Oxford to That's Oxford, the same group picked up the licence for Southampton, to be called That's Solent.
The size of Birmingham, the UK's second biggest city, Manchester and London make their local TV licences the most lucrative on offer and are considered by some observers to be make-or-break for several bidders seeking multiple licences across the country.
Ofcom also received a bid for the Birmingham licence from YourTV, which is chaired by Lyons and bidding to run eight local TV services across the country. Former Conservative MP and London mayoral candidate Steven Norris is heading YourTV's London bid.
Made Television, which is chaired by former Sky executive and co-founder of pay-TV firm Top Up TV Ian West, also missed out in Birmingham.
The consortium, which has named partners including Time Out magazine and Ambassador Theatre Group, has already won in Bristol and Cardiff and bid for 11 licences.
"My understanding is that the big multi-area bidders have to get some of the big areas to make them sustainable, although officially each licence is meant to be viable as a standalone business," said one source. "Missing Birmingham means crunch time for the Manchester and London bids."
The jewel in the crown of the 21 local TV licences being offered by Ofcom is London. The five bidders for the London licence include Made Television, YourTV and London8, which is headed by ex-Channel 4 chairman Luke Johnson and supported by Olympic opening ceremony director Danny Boyle.
The other bids for the capital's licence are the London Evening Standard, with an advisory panel that includes Stephen Carter, the former Ofcom chief executive, and London TV, which is backed by regional newspaper publishers Archant, Tindle and Trinity Mirror.