I am writing to you in my official capacity as the Chairman of the
All Party football Group (which has 120 members from the Commons and
the Lords) after discussing this issue with the officers of all three
I should also like to declare an interest as a director of the
Premier League club, Sheffield Wednesday.
The opinion of those members I have contacted are that the decision
of Sky TV to purchase Manchester United Football Club, is certainly
not in the best interests of football in general, and not in the
public interest of sport or the media either.
If Parliament had been in session we would certainly have been
calling for an immediate debate. Consequently we would like to urge
you to insist that this merger be halted until the House has had a
chance to debate it, then refer it to the Office of Fair Trading for
The reasons are as follows.
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.
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.
The current situation in football is already distorted by the
sheer size and strength of Manchester United. They are twice as
big as their nearest competitors Arsenal or Newcastle. They are
four or five times as big as an average Premier League side such
as Coventry, and ten times as big as the premier League's smallest
club Wimbledon. Compared to foreign teams they are bigger than
Inter Milan and Juventus put together.
Their receipts from just one of their matches, is more than the
annual income of either Hartlepool or Darlington.
When the Premier League was formed in 1993, Manchester United
(floated on the stock exchange in 1991) had an annual profit of £4.2
million. Last seasons profits are expected to top £30 million.
The effect of this growth has been to inflate players wages by
over 30% per annum in each of the last four seasons. The
consequences of this has meant that nearly 600 players this season
(out of 2,500) have been made redundant because smaller clubs
cannot afford to retain them.
It is now perfectly possible for three or four big Premier
League clubs to pay individual salaries of over £1 mil1ion per
year to several players, whether they play them in the team or
not, simply to restrict the market and stop other clubs from
Fans consistently complain about high admission charges, yet
these don't even pay the players wages, even in the lower leagues.
Gate receipts are now less than forty per cent of a club's income.
Everything else depends on TV sponsorship, corporate hospitality
and commercial sales.
Rupert Murdoch's pay satellite television is now 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.
The real reason however for Mr Murdoch's proposed purchase of
Manchester United is not immediately obvious. But there is no
doubt it is due to the meetings last week between the Premier
League clubs and an Italian based television company called Media
Partners. This company has proposed setting up a European super
league to operate from 2001, playing matches on midweek evenings,
and offering a "pot" of £3 billion TV cash to Europe's
If this new Championship were to go ahead in 2001, it could
seriously jeapordise the renewal of the BSkyB British football TV
contract that year. Rupert Murdoch was not involved in the
negotiations and, I understand, has no satellite interest in
several European countries.
It is because of this absence at the negotiating table that Mr
Murdoch is now attempting to buy Manchester United so that he can
block, or at least influence, the proposed new Championship and
television income. Manchester United are the biggest card in the
European pack and he wants to buy it. In addition you will be
aware that the Director of Fair Trading is being challenged in a
court case next January by the Premier League regarding his
initial decision that television companies should be able to
negotiate contracts individually with clubs and not on a Premier
League inclusive basis. There is an argument that the Premier
League is "a cartel," even though it changes its members
by three teams every season due to promotion and relegation.
Consequently as both Manchester United and BSkyB have assets of
over £70 million each and are quoted companies and therefore
within the scope of the Office of Fair Trading, we think it is
reasonable to ask you to prevent this deal from being concluded
and to insist on a full investigation in the public interest.
Also while accepting that the licensing and control of television
companies is perhaps a matter for the Home Secretary and not Trade and
Industry, we should like an assurance that any further new initiative
in the field of pay TV and sport should have to have that departments
We look forward to your reply.
JOE ASHTON M.P.