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In case anyone else is wondering what to write, here's my full
submission. I have structured it so that it contains the main points
but my overall message is that it cannot be in the public interest for
a media organisation to control ANY sport:
David Peel Esq.
Reference Secretary
Monopolies and Mergers Commission
New Court
48 Carey Street
London WC2A 2JT
BSkyB - Manchester United Football Club PLC - Proposed
Acquisition
Dear Mr. Peel
The purpose of this letter is to outline the reasons why in my
opinion the aforementioned acquisition :-
- Constitutes Unfair, Monopolistic Trading.
- Is not in the Public Interest.
I will state first of all that I am a supporter of Manchester
United, and have been for some 32 years. I believe, however, that my
arguments would be the same irrespective of my allegiance.
1. Unfair and Monopolistic Trading
-
Assuming that the forthcoming investigation of the BSkyB-Premier
League contract reveals no grounds for further action, the next
time the League Clubs sit down to negotiate with BSkyB one party
will be represented on both sides of the negotiating table. It
could be argued that Manchester United have only one vote, but in
reality the Premier League would not be nearly as lucrative
without Manchester United due to them being by far the largest
club in terms of support. It surely must be an unfair trading
situation for BSkyB to sit on one side of the table negotiating
television deals with football clubs, especially those in the
Premier League, then at the same time be sitting on the other side
of the table, as owners of the biggest football club in Europe, negotiating
TV deals for or against itself.
-
BSkyB would, if they so chose, hold a total monopoly on the
coverage of Manchester United games on television. Viewing
figures from recent European matches demonstrate that an extremely
large proportion of the football viewing population wants to watch
Manchester United - it could be argued well in excess of 25%.
Despite (not legally-binding in any way) promises by BSkyB, there
would be nothing to stop them making all Manchester United games
pay-per-view and charging whatever the market would bear. It could
be argued that Manchester United on their could do the same, with
or without BSkyB. However, the difference is that the money the
fans paid to watch the game would stay within the club (less
relatively small shareholder dividends) rather than (effectively)
disappear into an off-shore subsidiary of NewsCorp.
-
Currently the money Sky put into football, based on appearances
and League table merit, is open to fair competition This
competition would be open to distortion if one of the recipients
was owned by the promoters. Furthermore, subscriber money (after
BSkyB's healthy profit) is currently passed onto the clubs and is
used to finance the game. If BSkyB owned Manchester United, it
would effectively be passing supporters' hard-earned money on to
itself.
-
Rupert Murdoch's pay satellite television is already an
unfair competitor to both ITV and the BBC. ITV companies have
to be awarded franchises and satisfy the adjudicators, to ensure
they will act in the public interest. The BBC charter insists on
this too. Yet. Mr Murdoch's terms of satellite pay TV appear to
have no such restrictions, which gives him a very unfair
advantage. This deal would exaggerate the situation even further.
2. Not in the Public Interest
The reasons for the deal not being in the Public Interest fall into
two distinct categories:-
- The unacceptable situation regarding the ownership of sporting
clubs by commercial media organisations.
- The identity of (who controls) this particular media
organisation.
2.1. Unacceptable Ownership
I have several points to make regarding why it is not in the
public interest generally for a media organisation to own any large
sporting club - let alone the 'jewel in the crown' of our national
sport, and what could happen if the takeover were allowed to proceed:-
-
Football is a competitive sport. Public interest in the sport
depends on it being competitive. When the public watch 'their
team' that is exactly what they are doing - watching a team paid
for by supporters (even Jack Walker, who owns and bankrolls
Blackburn Rovers is a supporter). If a football club is just
another part of a commercial media organisation, people are quite
literally no longer watching 'their team'. Football ceases to be
the sport the public loves, and in effect they are watching a
version of WWF with a ball. Powerful commercial media
organisations owning/controlling major football clubs takes away
the real meaning from the game.
-
Football is not just another product like a soap-powder,
car or washing machine. It is part of our national heritage and
culture - the people's game. In the words of Lord Justice Taylor
in the Hillsborough report at para 10), "Football is our
national game. We gave it to the world." In 1990 it is
estimated that half the population - 26 million people - watched
England play West Germany in the World Cup semi-final.
The main motivation of BSkyB in taking over Manchester
United is not love of football. Should the Restrictive
Practices Court rule against the ability of the FA Premier League
to negotiate collectively BSkyB want to preserve their position by
having control of the biggest club. They want an important seat at
the table in any future collective negotiations including over a
breakaway European super league. As Raymond Snoddy and Jason Nisse
explained in a recent article on the merger (The Times 9.9.98) :-
"BSkyB's prime purpose in buying United is as an
insurance policy to protect it's exclusive live football. In
January, the Restrictive Practices Court will consider whether the
Premier League is an illegal cartel that cannot collectively
negotiate television rights. If the case were proven agreements
between BSkyB, the BBC and the Premier League could be struck down
and television companies would have to negotiate with individual
clubs. The Manchester United deal subject to approval be
shareholders and regulators would at least give BSkyB the right to
televised games at Old Trafford. The insurance policy could also
work in the longer term. The BSkyB Premier League television deal
runs out in 2001 and after that a number of clubs may be tempted
to use digital television to create their own football
channels."
-
In Mexico, two media conglomerates own four of the 18 first
division clubs, all of whom are linked to one of the two
broadcasters that transmit every league and cup game. These
teams regularly swap players. They organise competitions and
play a part in arranging kick-off times. They determine who will
represent Mexico in international competitions. This is not based
on winning domestic trophies but viewing figures; see Downie &
Twain, The Guardian 12.9.98 at p29. If this deal were to go
through, the door would be opened to the same happening in the UK
- hardly in the public interest.
-
The advent of clubs being owned by television stations could
see football becoming almost continuous as they seek to avoid
other big matches which might damage viewing figures. Already live
televised football can be seen virtually every night of the week.
This over-saturation will kill the game. Furthermore the impact on
changing kick-off times to suit the schedules of media companies
is only negative so far as the fan is concerned: for the
match-going supporter, the reasons are obvious and there are
already cases of inconvenienced supporters; for the TV-watching
supporter, it can only be inconvenient if kick-off times are
re-scheduled rather than being published in advance and stuck to.
-
It is not in the commercial interest of a media organisation
which owns a football club to have people watching other teams
instead of the 'TV Team'. I think we can all work out what such a
media organisation would do about this. Hopes of smaller teams
rising to the top are already increasingly remote. They will
become non-existent, particularly, if a European super league is
established with no automatic promotion or relegation. Already
struggling financially, most lower league football clubs (with
millions of supporters) would simply disappear.
-
Every representative football body which has expressed an
opinion (i.e. all of them) is against this deal. In effect, this
means that the public is saying "this is not in our
interest". On the other side, the only bodies of any kind
who have spoken out in favour of the takeover are BSkyB and the
Directors of Manchester United.
2.2. The Identity of the Bidder
I am sure that you are aware of who effectively controls BSkyB. One
look at the list of directors - only one of them is an executive
director - is enough to satisfy all but the most naive that BSkyB is a
part of the Rupert Murdoch empire. I take it that the MMC is familiar
with the business ethics of this 'gentleman' but just in case not,
here's an example :-
When Murdoch took over The Times & the Sunday Times in
1981 he agreed to make a number of guarantees in order to avoid
a reference to the Monopolies and Mergers Commission. These
included a pledge to give his editors complete editorial independence,
that the newspapers should remain separate from the rest of his
company, News International, and that ownership of the titles should
not be transferred without approval from the independent directors. In
December 1981, at a board meeting without the independent directors
present, it was decided to transfer ownership of the titles to News
International - in complete breach of the guarantee made. After
Harold Evans was sacked as editor of The Times in March 1982,
he revealed numerous examples of editorial interference by Murdoch.
Sources: Evans; Leapman, pp.235-85; Shawcross,
pp.244-55.
I have two further pieces of material which, for me, say everything
about what we can expect should Mr. Murdoch get his hands on
Manchester United - with or without him having to make undertakings to
the MMC :-
-
"One thing you must understand, Tom," Murdoch
told the biographer Thomas Kiernan in 1981, while negotiating to
buy Times Newspapers. "You tell these bloody politicians
whatever they want to hear, and once the deal is done you don't
worry about it. They're not going to chase after you later if they
suddenly decide what you said wasn't what they wanted to hear.
Otherwise they're made to look bad, and they can't abide that. So
they just stick their heads up their asses and wait for the blow
to pass."
Source: Thomas Kiernan, Citizen Murdoch,
Dodd, Mead, 1986, p.238
-
Business and politics are his only two passions: art,
music, hobbies, poetry, theatre, fiction, even sport (sailing may
be an exception) have no interest for him. He is fascinated by the
politics for its own sake - but also because politics affects the
business environment in which he operates.
Source: Andrew Neil, Full Disclosure.
Conclusion
This is very much a test case. It is clear that if this merger goes
ahead it will be followed by the take-over of other football clubs by
media/communications companies. Already, for instance, Carlton have
been linked to Arsenal and it is reported that Tottenham are
negotiating with ENIC who have strong links with Time-Warner. Very
soon there could be no more than half a dozen English clubs
monopolising football, and the rest would disappear.
-
BSkyB and Rupert Murdoch are trying to create a monopoly and
control British Football, so that they can use it as a
"battering ram" (Rupert Murdoch's words) to increase
viewing figures worldwide.
-
It is not the role of media organisations to own or control
sport. Legislation should be introduced to prevent such deals ever
being proposed, let alone referred to the MMC.
-
I am horrified for British Football should the most heartless
and ruthless businessman in the Western world get his hands on the
biggest representative of our national game.
-
Not one single football body does not agree with me.
Or, put another way :-
Football is a sport. The public loves sport because of its
unpredictability, because it represents real life. The people who
currently run sport have the maintaining of this principle at the very
top of their agenda.
The role of the media is to cover sport. Commercial media
organisations have a totally different agenda to that described above.
The role of the media is not to control sport for their own financial
gain. To say (or permit) otherwise is to seriously contravene the
public interest.
IN THE INTEREST OF EVERY SPORTS FAN IN THE COUNTRY, THIS
TAKEOVER MUST NOT BE ALLOWED TO PROCEED.
Yours sincerely
Jon ............
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