Industry slams MMC’s Sky-Man United ruling

The Government’s decision to block BSkyB’s takeover of Manchester United has been met with surprise and disappointment in many sectors of the advertising community.

The Government’s decision to block BSkyB’s takeover of Manchester

United has been met with surprise and disappointment in many sectors of

the advertising community.



The Trade and Industry Secretary, Stephen Byers, put the brakes on the

proposed deal last Friday when he approved the Monopolies and Mergers

Commission’s ruling that the pounds 623 million takeover was

anti-competitive.



According to the MMC, the deal would have had an adverse effect on

competition within the football industry. In a statement at the end of

last week, Byers said: ’The merger would damage the quality of British

football by reinforcing the trend towards growing inequalities between

the larger, richer clubs and the smaller, poorer ones.’



Byers said that there was also real concern that a takeover could give

BSkyB an unfair advantage over negotiating broadcast rights to Premier

League games, even though Sky had pledged to remove Manchester United

from any broadcast rights talks if the deal went ahead.



Byers said: ’I agree with the MMC that the advantages which ownership of

Manchester United would give BSkyB over other broadcasters in future

sales of Premier League broadcasting rights would substantially increase

its chances of winning those rights.’



Mark Booth, the chief executive of BSkyB, claimed the decision was

harmful to the football industry as a whole. ’This ruling sets an

unfortunate precedent for other British clubs and companies who may have

wanted to work together to improve and invest in the future of

football,’ he said.



’This is a bad ruling for British football clubs who will have to

compete in Europe against clubs who are backed by successful media

companies.’



In France, for example, Canal+ controls the Paris St Germain club, while

in Italy, Mediaset controls AC Milan and Monza.



Jim Marshall, the chief executive of MediaVest, echoed Booth’s

sentiments.



’To block this takeover fails to recognise that football is a major

business making a significant contribution to our economy. If UK teams

are to compete on the international stage, then they will only succeed

by having real investment behind them as clubs in Europe have money from

their media parents.’



Bob Offen, the chief executive of Mediapolis and a Manchester United

fan, added: ’This is a political decision; I can’t see any other grounds

for it in terms of competition or logic. It would have been a good move

for the long-term future of British football and it was a good

marriage.



Sky has done a lot for football and now needs to find another way of

keeping itself at the centre of the game.’



Mark Palmer, the head of communications strategy at BMP OMD, agreed that

’TV has been marvellous for football’. He added: ’The decision to block

the deal is scandalous. They’re restricting a company doing

business.



It’s a political decision and the net result could be a financial

reality where Manchester United can’t afford to keep its best players

when it’s competing against European clubs with deep pockets.’



However, according to reports from commercial lawyers, the decision to

throw out the BSkyB deal does not rule out similar deals between other

clubs and media owners. NTL has already had its bid for Newcastle United

referred to the Competition Commission, while Carlton has expressed

interest in Arsenal. The difference between these bids and that of BSkyB

is that Sky is the UK’s leading sports pay-TV provider, and therefore in

a potentially dominant position in broadcast rights negotiations.



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