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David Peel
Reference Secretary
Monopolies and Mergers Commission
New Court
48 Carey Street
London
WC2A 2JT

Dear Sir,

I write in connection with the BSkyB bid to takeover Manchester United and whether it is right for a media lead company to own a football club.

Rupert Murdoch said in his speech to the News Corporation AGM in Adelaide in October 1996, "what we intend to do elsewhere in the world is use sports as a 'battering ram' and a lead offering in all our pay television operations."

That's......... "a lead offering" and "a battering ram".

We ARE talking about football here aren't we - "the peoples game" and Murdoch talks of using one of the biggest clubs in the world as "a lead offering" and "a battering ram". I suppose that is all we can expect in this media dominated world of ours and if it is, I think it's about time we did something about changing the situation.

The media dominate our lives - they provide us with news through TV, radio and newspapers. They determine what information we receive and in what form we receive it. Some would go so far as to say they dictate the way we live our lives, so keen is their influence.

How many times have you seen a personality on TV or heard someone on radio and thought about how that personality has become a caricature of themselves over a period of time because it has become the general perception of them? Could this possibly happen in football if a media company took control? It's already happened in TV wrestling hasn't it?

Can you imagine the future staging of football games to suit the audience? Sky already do this to a certain extent by altering the kick-off times, but if they took complete control kick-off times wouldn't be the only things to be altered. If the game were staged solely for a particular audience would that be tailoring the game to suit the viewers based on the perceptions already built up by the media, and if it was, then wouldn't it cease to exist purely as a game of football from that moment on?

If BSkyB bought the club would they really want United to win everything all the time? Of course not - that would be bad business. Vic Wakeling, MD of Sky Sports said, "What we don't want to happen in English football is perhaps what's happened in Scottish football. To take one example when Rangers won 9 Titles in a row." It would alienate every Sky viewer who wasn't a Manchester United supporter if they were to win constantly so it wouldn't be in BSkyB's interest.

Surely this would then constitute a conflict of interests with BSkyB and at least the supporters of Manchester United who DO want to win everything on offer. That is the nature of the game and what every supporter of every football club wants. If this is so then the proposed takeover is against the public interest, at least against the interests of Manchester United supporters.

Why has the farcical play-off situation come about in Rugby League if not for the benefit of TV eking out the season and squeezing the last drop of cash from the punter in a meaningless end of season sham. Is this what we want for football, because if a media giant gets hold of the game that is clearly what will happen.

It's not about entertainment - it's about lining the pockets of the broadcasters and the football fat cats.

Murdoch has gained a position of power through controlling the media. Andrew Neil, ex editor of the Sunday Times has said, "Murdoch rules his companies like a monarch. News Corporation is a plc but Murdoch is in total control.

"He has a global vision in which he controls both the product, in other words the TV programmes and the news service and the means of distribution."

The power of government is restrained by financial markets. Murdoch influences financial markets just as he influences the rest of our lives. It would be impossible to be the world's biggest media magnate and not have that influence. He has TV and newspapers at his disposal and they are the tools which allow him access to the minds of the populace, and he uses those tools to great effect.

Lord Peyton of Yeovil said, "I take it that the noble Lord would agree that control or influence over a large portion of the modern communications network is the key to immense power and influence and that Mr Murdoch's share of this network has been growing steadily over recent years. Are the government not becoming a bit nervous about that, and do they not feel that the point has been reached when, in the words of a famous, long-ago Motion, it ought to be diminished?"

The takeover bid is not about a mere company 'buy-out', it's about a strategic purchase in order to sell Sky subscriptions. The bid was timed to succeed before the result of the OFT court case with the Premier League, ahead of the re-negotiation, after the Premier League had rejected pay per view. It was a bid to secure the rights to televise Premier League football and whoever owns those rights owns the ultimate power to dictate the way the game of football should go. What better way to achieve this other than by placing yourself on both sides of the negotiating table by owning the most influential club in the country - Manchester United.

Ultimately this would mean football would take second place to television. TV would ostensibly own football, would dictate to football and all it's followers. Not just to those of us who follow Manchester United, but to everyone. We would be at the mercy of Rupert Murdoch and his quest for world media domination.

Surely this cannot be in the best interests of the people who follow the game. If the game were to fall into the hands of a media magnate who is intent on promoting his subscription sales rather than looking after the welfare of the club and the game of football. It would set a dangerous precedent which would give the green light for others to follow and gradually the game would be mere flotsam floating on the media sea and the supporters, the jetsam cast upon the shore.

There seem to be two possible scenarios to take into consideration. One is that the Premier League succeeds against the OFT and the BSkyB deal is re-negotiated in 2001. BSkyB would then be in an extremely powerful position to gain advantage over any other prospective broadcasters. They could even threaten to withdraw Manchester United from the league if they did not get their way on broadcasting rights. They would most definitely have an unfair advantage over others, in fact they would effectively be negotiating with themselves.

Manchester United are the dominant force in the Premiership and what Manchester United do today, others do tomorrow, this has been seen time and time again. For instance the attitude of Manchester United regarding what was the Coca Cola Cup and now the Worthington Cup, United would play a 'second string' eleven and were chastised. They stood their ground and now this practice is commonplace amongst the top clubs.

The other possibility is that the OFT win the case and the TV rights are then sold by each individual club. BSkyB would own a club which counts for a large share of the market which would again set them up in an unfairly dominant position.

When Sky first came on air Premiership football was free. Gradually the cost has risen so that it now costs 21.99 per month as part of a package. That is 264 pounds per year, three times the cost of a license fee. How will this equate if BSkyB are allowed to purchase Manchester United?

And how will BSkyB fund the takeover?

Murdoch operates almost 800 separate business units across 52 countries, shuffling cash around as a matter of course. The overall financial picture is further muddled by complex inter-company borrowings and financings, and by complicated joint ventures. Murdoch himself once conceded that the company's intricate financial interior confused even some of his most senior executives. "One of the things I would never attempt to calculate is how News Corp. arrives at its tax rate, or why," said John Reidy, a Wall Street analyst who has followed the company for years.

Who knows where, or in which account, our money would end up.

A study of Murdoch's companies undertaken by the Australian Parliamentary Committee in 1989 (the only such study) revealed that he declared all of its total annual profits through subsidiaries in low-tax countries such as the Netherlands, Antilles and Bermuda. In contrast, News Corp.'s main subsidiaries in Australia, Britain and the United States, all relatively high-tax countries, recorded losses that year.

News Corp.'s shareholder equity - essentially, the company's net worth falls by nearly half the $16.7 billion it reported to investors in Australia once U.S. accounting principles are applied, according to SEC documents. The higher valuation is important because the greater the equity, the greater Murdoch's borrowing power. The extraordinary growth of News Corp. over the past dozen years has been fuelled by Murdoch's heavy borrowing. At the end of the past fiscal year the company had nearly $13 billion in outstanding debt and other liabilities.

News Corp. is notorious for not securing loans with collateral. Richard Sarazan says: "If a Bank wants to lend to us, we won't take it unless we are satisfied it knows we're a company with very complicated flows of money."

American media commentator Russ Baker says, "If ever someone demonstrated the dangers of mass power being concentrated in few hands, it would be Murdoch."

"Mr Rupert Murdoch has failed to deliver his forecast News Corporation profit lift of 20 per cent, with the global media group instead suffering a 29 per cent fall in net profit. Stockbroking analysts are now reviewing their 1998 profit forecasts for News Corporation. News Corporation said...it would use some of it's cash to prop up it's share price" Matthew Kidman, Investment Editor of the Sydney Morning Herald.

So how would Murdoch finance the United takeover?

David Docherty the deputy director of BBC TV: "Murdoch bets the house. He builds cash cows. He uses that money to take other business risks and has managed to dominate every industry he has gone into."

"Business tactics outlined include a willingness to gamble the whole company on one acquisition or project." Keith Beckstead, from the PBS produced Frontline Video.

Again, it doesn't seem to be a very bright future for Manchester United supporters, more a deal to prop up other Murdoch ventures.

Manchester United is already a successful business. They are a global brand developed over the last decade based on the recent success and the history of a great football club. Why does Manchester United need Rupert Murdoch to help progress the brand when they are doing fine for themselves. That side of the business turned over 28.5 million in the last financial year. The real answer is, they don't need Murdoch at all. They have appointed their own brand director in Peter Kenyon and have recently embarked on a series of ventures where they will open club related shops in choice airports throughout the world and the business in general is booming.

"Manchester United dominated the financial performance of all clubs; their pre-tax profits exceed the whole turnover of Division Three, and the club's operating profit is about 30% of all total Premier League operating profits". Deloitte & Touche Annual Review of football Finance 1998.

A football club is successful on the pitch due to the performance of the team. Off the pitch it is successful because the fans buy the tickets to watch the team and buy the merchandise to express their allegiance. A football club may have turned into a plc, but it still only exists because of the supporters and the team on the pitch. Football is still essentially a game beloved of it's supporters.

Without the supporters football ceases to be. Without competition, football is useless. Competition is vital and fair competition at that. Not Rupert Murdoch's ideas of competition that's for sure.

Manchester United supporters have absolutely no idea what BSkyB would be bringing into the club. There is no agreement that they will be contributing one penny of their own money. There isn't a single guarantee. Not one promise of anything.

What sort of agreement is this in that case, and why is the club being sold such a fashion? It's surely not because Martin Edwards and the rest of the board are going to make loads of money is it? It can't be - can it? Surely they wouldn't sell our great club down the river for personal gain?

They wouldn't - would they?

Patrick Harverson from the Financial Times has said, "It's not such a great deal for United." Then why are Martin Edwards and the board intent on selling the club to BSkyB?

There seem to be far too many personal agendas involved in this proposed takeover. Rupert Murdoch desires TV world domination and this is why he wants to buy Manchester United, not for any other reason.

If Murdoch gets his way Manchester United will be a subsidiary to BSkyB which is under the control of News Corp. News Corp is run by Murdoch - I know you could argue against that, but when has anyone ever gone against Murdoch and survived? I doubt they ever have - before now that is.

This deal, if it allowed to proceed and the precendent set, the big clubs will become even bigger than they are now and the gap between them and the rest of football will become wider and wider until it will not be possible for any team to win anything unless they have big money backing. If that is the result then football as we know it will cease to exist and pure competition will be dead. The public will be cheated into thinking they are still watching football but in actual fact they will be watching a media merry-go-round.

This has now become a real opportunity for change, to set the game of football back on it's true path. A path that supporters want to walk. We recognise that football needs cash and the backing of the media. What football does not need is to be dominated by the media. It is surely about time those of us who follow the game are honestly taken into consideration and are allowed a say in the development of the game as a whole.

Football will always be a special case, once you choose a club you stay with that club for the rest of your life. The club becomes part of your culture. You develop a dependency on it and the club, in turn are dependent on you. To take unfair advantage of football is like rape, a violation. Football is a parochial game - allegiance is tribal. We are essentially a captive audience, we cannot change our affiliation. In everyday life, if we experience a poor show at a concert venue for instance or receive poor service at a cinema we can chose to go elsewhere, in football you HAVE NO CHOICE.

The government has shown a commitment to football. It has provided the Football Taskforce to investigate aspects of the game and the relationships with the supporters. The Football Taskforce is totally opposed to this bid as are the PFA, the League Managers Association, the independent fan's associations, the FSA and the Football Association itself. In fact every governing football body. This must surely count for a lot.

In conclusion:

The disparity between clubs in the Premiership is becoming wider and wider. Manchester United's turnover is now more than those of the other two top clubs (Liverpool and Arsenal) combined. This disparity is reflected in the influence Manchester United have on the Premier League. It could be argued that the League would not survive without United. Whether that is the case or not, the League would be a much poorer place without it's major force and attraction.

Rupert Murdoch owns the company which supplies the broadcasts, Manchester United provide a great proportion of the content of those broadcasts by being the major force in the Premiership. If BSkyB were to be allowed to buy that content they would surely have an unfair advantage over possible competitors and over the Premiership as a whole. This cannot possibly be in the interest of the paying public.

20% of all Premiership broadcast involve United and the average viewing figures when United are playing are 35% higher than when other teams are involved. Seven of the top ten games for viewing figures last season involved United.

Manchester United have just launched their own TV channel and would eventually expect to be able to screen their own games live. If BSkyB were in control of the club those games could be exclusively on a pay-per-view basis thus rival stations would never get the chance to sell United games as part of their TV packages which would put them at a disadvantage and sooner or later their viewing figures would be so poor by comparison that they would surely be forced out of business. The BSkyB monopoly over Manchester United games would mean less overall choice for the paying customer, in fact to view any game involving United whether it be against Wimbledon, Leicester or any other Premiership club, the viewer may even be expected to subscribe to the whole package and take the entire season of United games in order to see them play their own team live.

Should we really even be seriously considering one person having THAT much influence on the "peoples game" and especially one of Rupert Murdoch's character?

In Zurich recently at a meeting to discuss "fundamental issues facing the game", Michel Platini stated, "It is essential that football remains in the hands of football people to ensure the game's long-term viability."

So are we to involve ourselves in a scenario of personal agendas and allow the sale of a great football club to a monopolistic media magnate or are we going to resist his advances in order to save our game and keep UNITED for UNITED?

Yours sincerely,

Paul

 


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