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The Independent Manchester United Supporters' Association

Report on the Globalisation of Sport

February 1999

1. Introduction

This short paper looks in its entirity at the involvement of Rupert Murdoch in sport. In particular the resulting impacts of his involvement on the individual sports themselves.

The paper draws on a wide range of (predominantly but not exclusively) academic references which focus on the politics and the media implications of this involvement.

In terms of "supporter issues" concerns may not be addressed specifically but we point to the community based origins and long established traditions of the sports themselves for evidence in this area.

The impact Murdoch has had on these sports have devastated the traditional viewing culture, the basis on which the sport was founded and became initially established.

We leave the reader to judge wheteher or not Murdoch will treat the traditions of Association Football any differently through his closer involvement in the sport through his purchase of clubs such as Manchester United plc.

2. The American Experience

Business Week, (September 22 1997) was typical in its reports that media companies were now finding it cost effective to own teams which draw an audience. Media companies, said the publication, can run teams at a loss and make up the difference on advertising and subscription fees. "Sports programming sells anywhere, anytime" the report quotes one analyst as saying. Another analyst was quoted as "Sports franchises are software, something to put through their distribution pipelines"

The 'classic' example of this strategy being Murdoch's well known tactic of a "willingness to gamble the whole company on one acquisition or project." (Keith Beckstead, from the American Public Broadcasting Service produced 'Frontline' Video.) through his purchase of NFL rights.

Explaining the purchase of the LA Dodgers for 25 times the teams current earnings Business Week cited the Dodgers "multinational" line up including players from Mexico, Korea and Japan. The report concludes that Murdoch is "betting" the rules currently prohibiting individual TV rights deals would soon be lifted.

On that 'bet' he has recently significantly upped the stakes. The recent signing of pitcher Kevin Brown on a seven year $105m contract (roughly $400k per game) has been widely seen as the sport's further step towards showbusiness. Smaller clubs have complained bitterly about the deal and its chief implication - that small teams will no longer be competitive whilst media owned companies, fuelling the spiral, can market their own clubs as "must see" attractions - not to mention avoiding the bidding war to show the team. (Observer December 20th 1998).

This particular deal led the Major League Baseball vice president Sandy Alderson to comment "As a member of the commissioner's office I'm alarmed by the terms. As a fan of the game I'm alarmed by the terms".

Cultural commentator Brian Stoddart (1997) has already warned of "an intriguing challenge for control of the global sports empire". Significantly however he sees the battle as being not between broadcasters - 'they' already progressing towards carving up world sports, but between broadcasters - with their "strategic sports and communication alliances" and the fans themselves. The latter group having to rely increasingly on Internet based technologies, not television, for 'unmediated' access to their favourite sports, and to a similarly sports minded peer group, as "extant media blocs [try] to rein in that freedom by taking over...technology." He concludes;

"Over the past century and a half, sports have become increasingly marked features of modernizing cultures. The major issue now is whether indigenous cultural sports forms can survive the onslaught of globalised sports....there can be no denying that politics, industry, economics and media have now penetrated the world of sport in an unprecedented way."

3. Murdoch & Rugby

A key case study in Murdoch's involvement in sport, underlining the apocalyptic views of the culturalists - and the sports fan - is surely the way he has exerted a stranglehold on the two codes of rugby.

Despite the cultural discourse, the media analysts and business press rarely considers sport as a cultural activity but as a product. Yet consider the impact of "SuperLeague" in Australia. Murdoch's News Limited in Australia became convinced Rugby League, based on twin (local and complementary) leagues in both New South Wales and Queensland, was a sport which could generate pay-TV subscriptions.

It arrived at this conclusion following discussions with the Brisbane Broncos, a private 'franchise' club - which allowed the NSWRL to adopt a 'national' league format, to the detriment of the Queensland League.

Ken Cowley, head of News Limited's Australian operations insisted that that if they were going to spend A$60m on rugby league, as proposed; "News Limited wanted some control over the game" (Nauright and Phillips, 1997).

Super League was based not on the traditional, fan led, model of club ownership traditional in Australian sports, but instead private, US style run-for-profit franchises with fewer teams - each being granted territorial rights - and market zones. In addition for such exclusivity, league-wide merchandising deals and advertisement revenues were pooled through joint marketing arrangements. Indeed the Super League concept was seen as being spread globally with Rugby League being similarly remodelled in other countires (most notably Britain and 'Europe' with the establishment of a team in Paris) and the sport being heavily marketed where it was not presently being played.

The results have been bitterly opposed by fans world wide, not least in Australia where supporters were used to exercising democratic control and participating in social activities organised around the sports club itself.

In terms of the impact on the sport, 'civil war' would be a cliched term which, in this instance would not be misplaced.

The ARL (formerly the NSWRL, which itself had trampled on its Queensland 'sister' league) and Murdoch's bete noire Kerry Packer stoutly opposed the setting up of Super League. Murdoch however launched on a strategy of signing clubs, players, officials, coaches and referees as possible, including those in England and New Zealand, effectively controlling international fixtures.

The net result was a bloody court battle. As the Nauright and Phillips (1997) paper states;

"The fight...pitted player against player, club against club, city against city, state against state, country against country, pay-television opertor against pay-television operator, phone company against phone company, and media mogul against media mogul."

Interestingly the authors do not claim the result was to pit fan against fan: Rowe (1997) describes the impact on the sport as "cataclysmic" - at one stage the Australian Courts outlawed Super League players (branded as "rebels" against Packer's "loyalists" by Packer: ironic with it coming from the man who almost split cricket in two during the 1970s with the Cricket 'Circus').

An inevitable phase of rival leagues came to being but the game was irreversibly changed. Players who had spent their careers together on the Australian national team found themselves divided by accusations of dishonour and greed. Dismal TV ratings and attendance figures soon became the norm in both leagues, whilst team expenses soared.

Prior to that the Australian Court found that News Limited had been guilty of "deceit, dishonesty and duplicity" with a "meticulously planned operation, involving secrecy, suddenness and deception".

Despite the ARL (and Packer's) attempts to persuade the fans that they were the custodians of the sport, Murdoch and Packer met on the former's yacht and hatched a compromise deal which "shocked" the ARL's chair - who resigned, as well as the fans. Rowe (1997) comments "All the ARL's and Packer's rhetoric about the people's game, loyalty and tradition was ultimately subordinated by individual economic interests."

Almost as soon as the yacht deal was brokered, News Limited contacted various senior figures in Australian Rugby Union to, in the words of Business Week (September 11 1995) "reassure" them that Murdoch was ready to enter Rugby Union too.

The report suggests "It was as if Murdoch had created a distraction with Super League...while he was garnering even more money for rugby union, an international code with wider appeal".

Business Week reports that "when those first News Ltd calls came in April (of 1996), rugby union literally had nothing to sell" but less than a month later Australia annnounced the end of amateurism and shortly after, the competition schedules of Australia, New Zealand and South Africa had been torn apart and restructured into a package of southern hemisphere competitions.

Just four days after the rugby unions of the southern hemisphere had met Sam Chisholm, a new governing body SANZAR had been formed, six weeks after that Murdoch agreed to pay US$50m over 10 years for exclusive world rights to all rugby in those three countries.

As with rugby league, capturing Union as a global sport is what drove Murdoch. In June Murdoch's final phase of his master plan almost split the northern hemisphere game in two, and the reverberations continue to this very day, even whilst he begins to turn his attentions to the next phase of his plans to exert control over association football.

In June 1996, the Rugby Football Union - the governing body in England - stunned the rugby world by announcing they had signed a unilateral ten year 87.5m deal with Sky TV, encompassing the Five Nations championship - one of the oldest and most famous sporting tournaments in the world. The deal went completely against the previous, long establishhed tradition of the four home unions (France having always had a separate TV deal since they were admitted into the tournament) negotiating and agreeing joint rights.

The three remaining nations were furious. After attempts to compromise England were expelled from the Five Nations, signalling the demise - amongst other fixtures - of the Calcutta Cup, the sport's oldest fixture held between England and Scotland.

Murdoch's strategy became clear - to increase the number of fixtures between England and the Southern Hemisphere nations, at all levels of the game, and, for the international fixtures at least, offer a pay-per-view 'service' (though this element of the deal was not to surface until twelve months later).

Naturally the row became global. The Daily Telegraph (25th July 1996) reported the row as an event which also neatly crystallised the impact and intentions of Murdoch on the sport;

"The row which has culminated in England's expulsion from the championship does not stop in Britain and Ireland. Senior officials in South Africa, Australia and New Zealand have been told that if they come to England's rescue by finding a slot for them in an expanded Tri-Nation series, there will be no Lions tours to those countries.

Much as the southern hemisphere countries relish their 10-year, 362 million deal with satellite television, they dearly want incoming tours, especially from the British Lions. They add much-needed variety to a calendar of mind-numbing similarity. Next month South Africa have Tests on five successive Saturdays, four of them against New Zealand."

August 29th: The Independent reported that "Representatives from Scotland, Ireland and Wales yesterday stood back from the brink...[it was] the first suggestion that...their own situation is far from strong...Many consider the the moral high ground to be theirs but...every commercial argument favours England."

The eventual compromise was brokered largely on the basis not of right and wrong but commercial expediency: The owner of club side Saracens, Nigel Wray, remarked - "I do not think there is much interest in watching Ireland play Wales or Scotland...the rest of the world likes bashing England"

Before a compromise was reached however, the sport faced turmoil from a different angle - leading clubs decided they would like to form a Premiership-type league and breakaway from the RFU. The row led to England players - promised more cash under the breakaway deal - boycotting training sessions in a manner reminiscent of the conflicts which have emerged in all major US sports in recent years.

The Five Nations issue was resolved in September of 1996 - though as can be seen now, this proved to be only temporary - Jim Telfer, Scotland rugby union's director of football remarked as a compromise was reached "England bring so much to the Five Nations - they are the country everybody wants to beat. To be honest, Wales, Ireland and Scotland need England more than they need us."

The breakaway still threatened to overshadow Sky TV's deal. In September Sky threatened to walk away from their England deal if the RFU are unable to field their top players in internationals.

In October 1996 Sky refused to deal with the breakaway clubs "It is simply not in Sky's interest" says Sky TV's Sam Chisholm, who repeats threats to pull out of Rugby unless the clubs pull back from breaking away.

Ultimately, the clubs opted to fall back in line with the RFU, not least because of the lucrative club level deal based around the new European Cup competition. Whilst the deal to secure club rugby tightened Murdoch's grip on the game still further, terrestrial television now no longer broadcasts club rugby union regularly - the BBC deciding to drop Sunday's traditional Rugby Special after 31 years.

One former BBC rugby correspondent said: "I think part of the reason that Rugby Special has been dropped is that the BBC always saw it as a loss-leader, a sop to the RFU and the other unions, ensuring that they got international matches live.

"But if that part of the deal has gone down, the BBC has probably reasoned: why should we help to promote club rugby for the RFU if they have sold off the crown jewels to someone else?"

There are a number of points which emerge from this chaos;

     

  1. In March 1997, Sky announced England's home Five Nations games would be held on Sunday not on the traditional Saturday - much to the dismay of match going supporters who always (and famously) viewed the Saturday internationals as a great social occasion

     

     

  2. England lost three of its major sponsors, at least one - Save and Prosper - as a direct and publicly stated result of Sky's involvement in the sport and uncertainty over kick-off times

     

     

  3. As has become clear subsequently, rugby union has over extended itself in the initial period of professionalism. A number of clubs - Bath being the prime example - found themselves with heavy debts. Newcastle, a club 'launched' in a blaze of publicity by magnate Sir John Hall, now face an uncertain future

     

     

  4. One upshot of this is a further restructuring of the English game. The threat of the implications of this has persuaded a second division side to literally buy out a first division side and rename it

     

Furthermore, as stated, recent news coverage has brought the conflict and Sky's TV deal back to the fore. Receiving less coverage were recent reports that over a century of another tradition: that of the sport as a winter game, was about to end. If England were too big to be expelled from the Five Nations they are not too big to be able to dictate world rugby to the South.

Murdoch envisages a March to November international season, complete with "global play offs" between Five and Tri-nations competitions (Observer 20th December 1998).

The RFU's rugby director, Don Rutherford said "I can see that happening...and the change is not as far away as the traditionalists may think. Never underestimate the power of television"

Irrespective of how rugby deals with the Murdoch whirlwind it is clear that if you want to watch live rugby matches on TV - with a few notable exceptions - you must be a Sky subscriber to do so.

In conclusion, the above case study suggests that sports associations and governing bodies have structures ill equipped to deal with the dramatic changes which result from the involvement in sport of media companies such as those owned and controlled by Murdoch. Governments meanwhile have been fearful of challenging the likes of Murdoch head on.

It is purely in coping with the fragmentation of television audiences that the interest in sports shown by media companies has emerged, hence the decline in audiences coinciding with a rise in television revenues. Rugby has undoubtedly struggled to come to terms with Murdoch and it remains a paradox that globalisation threatens to destroy the very reasons behind the media companies interest in sports. But as Williams (1994) points out;

" Sport's one, but important saving grace is that the joys of performance..still have the ability to transcend the commodification of sport. To watch great soccer players at their inspired best - Giggs, Baggio, Romario, Cantona - is to be reminded, if only temporarily, that sport is not simply a product but a performance."

But it is with a view of Murdoch and sport with which we conclude. The Washington Post's columnist Thomas Boswell commented, we feel, resonantly;

"The question that has hung over baseball for twenty years has always been the same. What happens if the game ever gets an owner who is utetrly shameless, totally amoral and absurdly rich? If the [Kevin] Brown signing works out as badly as it should, then we may find out if Rupert Murdoch is that owner."

References:

Nauright, J. and Philips, M.G.; Us and Them: Professional Sport and Resistance to North American Ownership and Marketing Models, Sport Marketing Quarterly, volVI(1), 1997

Rowe, D.; Rugby League in Australia: The Super League Saga, Journal of Sport and Social Issues, vol 21(2), May 1997

Stoddard, B.; Sport on the Information Superhighway, Journal of Sport and Social Issues, vol 21(1), February 1997

Williams,J.; The Local and the Global in English Soccer and the Rise of Satellite Television, Sociology and Sport Journal,vol 11(11), 1994

 


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