The latest episode in the saga of BSkyB’s bid for Manchester United Football Club (see Newsline) has unfolded today with the Independent Television Commission (ITC) urging the Monopolies and Mergers Commission (MMC) to consider the implications very carefully.
The watchdog commented: “The ITC has always wanted to see effective competition for the rights to broadcasting sports events. For that reason, it believes that any acquisition by a broadcaster of a business such as a football club needs careful investigation, to ensure that there will be effective competition. The issue is particularly acute in the case of Premier League football clubs.”
The ITC’s worries are largely concerned with the implications the deal will have for competition in the field of football television rights. BSkyB currently already owns the rights to broadcast Premier League matches until 2001, as well as rights to other sporting events (see Newsline).
However, it is unclear what effect the ITC’s stance will have on the ruling of the MMC, which is due to be announced on 12 March. The watchdog’s comments are just one of many opinions voiced on the takeover, most of which have been critical of the deal – a survey by CIA Medialab found that over half of the public were opposed to the bid going ahead (see Newsline). However, the Commission is aware of its limited influence: “It is not, of course, for the ITC to determine the outcome of that enquiry which will have to take account of many other factors and many other witnesses and is a matter for the MMC alone.”
When contacted by Newsline today, the MMC said that the ITC simply does not have the power to block the deal from going through. Its spokesperson also pointed out that the ITC’s was only one of over 100 opinion submissions which had been received concerning the bid. The general consensus suggests that the ITC’s statement is perhaps one of the weaker of many, although it may succeed in lengthening the odds against the deal.
In response to the ITC’s statement, BSkyB released the following statement today: “BSkyB believes that the proposed acquisition of Manchester United Football Club doesn’t breach competition rules and is not against the public interest. BSkyB believes it has a strong case and is putting it robustly to the MMC.”
Sky’s shares were up at the close of trade yesterday, rising 34p throughout the day to a price of 508žp (see Sharewatch). The broadcaster’s shares have remained stable all day, standing at 515˝p at 1:00pm.
ITC: 0171 255 3000 BSkyB: 0171 705 3200 MMC: 0171 324 1467
