MMC Submits Report On BSkyB Man Utd Bid To DTI
Stephen Byers, the new Secretary of State for Trade and Industry, is to face possibly his toughest decision yet when the Monopolies and Mergers Commission (MMC) hands over its report on the BSkyB bid for Manchester United Football Club today. The MMC has been investigating the matter since October last year (see Newsline).
BSkyB, 40% of which is owned by Rupert Murdoch’s News Corporation, submitted a £623 million bid for the UK’s largest football club in September last year (see Newsline). The Manchester United board accepted the bid despite voiced opposition from the club’s supporters. A group called Shareholders United Against Murdoch was formed in opposition to the bid, and urged all shareholders of the club to hold on to their shares (BSkyB bought a further 5.35 million shares of Manchester United, and now holds 28.8 million of the club’s shares, or 11.12%).
Fans were not the only group to be against the offer. A survey by CIA MediaLab in September last year showed that 57% of people did not think that BSkyB should be allowed to take control of Man Utd, and 56% of people felt that Sky would be the main beneficiary should the deal go through (see Newsline).
MPs also voiced opposition to the proposed deal towards the end of October, with 46 signing a Commons early day motion. They expressed concerns that the bid going through would create an ‘unacceptable situation’ and be against the public interest (see Newsline). The deal was referred to the MMC by the then Secretary of Trade and Industry Peter Mandelson, who had himself voiced approval for the bid (see Newsline).
Following the referral, the MMC issued a letter listing around 30 concerns raised by the bid. One of these was whether the merger would limit access to Manchester United matches, staff and players by media not owned by or allied to BSkyB, and whether the merger going ahead would encourage other media owners to acquire football clubs, and what effect this would have on competition (see Newsline).
Mark Booth, BSkyB’s chief executive, speaking at a press conference when the bid was announced, said that the deal would be “good for football, good for Manchester United and good for Sky” (see Newsline). BSkyB has stressed in the past that broadcasters negotiate with the Premier League, not individual football clubs, and that it therefore would be unable to influence the allocation of future broadcasting rights. Media speculation today suggests that analysts expect the bid to go through despite the oppositions.
Other media and football talks have been sparked by Sky’s bid. Carlton and Arsenal entered into talks, as did Leicester City with Diamond Cable. Enic was reported to be in talks with Tottenham Hotspur FC, and Aston Villa received a bid from Granada (see Newsline). The Mirror Group formed a TV venture with Rangers football club, and cable company NTL bought a stake in Newcastle United (see Newsline).
The Independent Television Commission (ITC) urged the MMC to consider the implications of the deal very seriously (see Newsline). BSkyB currently already owns the rights to broadcast Premier League matches until 2001, as well as rights to other sporting events (see Newsline).
The final decision now falls to Stephen Byers. The details of the MMC report are expected to be released next week, although a final decision from the DTI is not expected for another four weeks. The deadline for the DTI ruling is 13 April.
Department of Trade & Industry: 0171 215 5971 Monopolies & Mergers Commission: 0171 324 1467 BSkyB: 0171 705 3000 Manchester United Football Club: 0161 872 3488