In this section
IMUSA at the MMC
MMC submission 2
MMC submission 1
IMUSA's OFT submission
Joe Ashton letter
House of Lords Debate
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.
Monopolies and Mergers Commission
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
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
2. Not in the Public Interest
The reasons for the deal not being in the Public Interest fall into two
- 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
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
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
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
Source: Andrew Neil, Full Disclosure.
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
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
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.