Rupert Murdoch’s Manchester United? How BSkyB nearly bought the Red Devils
The sky falls in
Mandelson was right, if verbose. The OFT referred the case to the Monopolies and Mergers Commission, who investigated it for more than four months. In March 1999 they delivered a 254-page report to Mandelson’s successor Stephen Byers, and on Friday 9 April, two days before United’s FA Cup semi-final against Arsenal, Byers grabbed the headlines on the front and back pages.
A hitherto quiet, bespectacled career politician, not at all like his empire-building predecessor, Byers amazed fans, shareholders, MPs and commentators – political and sporting – by announcing that the deal was to be blocked as anti-competitive. “Under almost all scenarios considered by the MMC, the merger would increase the market power which BSkyB already has as a provider of sports premium channels,” Byers explained.
Crick rejoiced in typical style: “The most remarkable thing is that a politician has at last stood up to Rupert Murdoch.” “It is a good day,” agreed Labour MP Chris Mullin. “It is clear evidence that the Government is not necessarily intimidated by Mr Murdoch, despite the size of his empire.”
BSkyB quietly fumed. Much had been made of Murdoch, having a foot in both camps, being able to use insider information about TV rights bids – as Alan Sugar had done to help Sky win its first Premier League contract.
“We said at the outset that Manchester United had one vote in 20,” insisted Sky Sports MD Vic Wakeling. “We have then said, if people are concerned about this, we will agree to stand down during any TV contract talks, so we can't see why there would be a competition issue.”
BSkyB chief exec Mark Booth, whose Heathrow lunch had kicked off the whole takeover, was more pointed and threatening: “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.”
But Booth was wrong on most counts. The MMC mandarins had carefully considered their options and decided it might not be good if the biggest broadcaster owned the biggest club. The blow to TV companies had knock-on effects elsewhere, especially further down the league, but they were due more to unsustainable overspeculation in a tech boom that was inevitably followed by bust.
On the pitch, life went on as normal, more or less. A month later, Manchester United completed an unprecedented Treble by winning the Champions League in Barcelona against Bayern Munich. It was the sort of narrative that lends itself to heavily-mediated history. United, and Sky, still trade on it to this day – but they do so separately.
What happened next?
Manchester United won nine of the next 15 Premier League titles, and no monopolies commission could stop them. Nor could an enormously unpopular takeover by the Glazer family in summer 2005, which valued the club at £790m, a price partially raised by leveraging loans against the club’s assets. The club was delisted from the London Stock Exchange in June 2005 after the Glazers reached the 75% ownership that allowed them to do so. The club was relisted, on the New York Stock Exchange, in August 2012.
Martin Edwards continued to lucratively whittle down his shareholding. He resigned as chief exec in 2000, elevating his previous deputy Peter Kenyon to the main role, while remaining as chairman. He resigned as chairman and non-executive board member in November 2002 after various salacious newspaper claims. Although he remains honorary vice-president, his resignation ended 42 years of Edwards family presence on the United board.
Club lawyer Maurice Watkins completed an unlikely double in 2013 by legally representing both Eric Cantona and Stuart Hall. In 2012, he stepped down from the United board after 28 years, switching Old Traffords to join Lancashire CCC. From 2013 to 2017, he was chairman of Barnsley FC.
Mark Booth quit as BSkyB chief exec on 28 April 1999, less than three weeks after the takeover bid was blocked. His warning about British clubs failing to compete in Europe did not come true. True, after United’s 1999 win no English side reached the Champions League final again until 2005, but they hadn’t since 1985, and Liverpool’s memorable visit to Istanbul started a run of eight successive seasons featuring eight Premier League appearances in Champions League finals.
On 23 November 1999, BSkyB was forced to sell 2.9m of its United shares to take its slice down from 11.1% to 9.99%, underneath the Premier League’s ceiling of 10% ownership for any individual or company with shares in more than one club – a rule partly introduced to stop any new Maxwellian mergers. Two weeks earlier, BSkyB had bought 9.9% of Manchester City for £5.5m; it already owned a similar slice of Leeds and would also buy into Chelsea and, er, Sunderland. In time, all these part-ownerships would be bought out by incoming takeover attempts; BSkyB sold its slice of Manchester United to JP McManus and John Magnier in October 2003.
Tony Fraher, the fund manager who had predicted that 16 of the 10 top-flight clubs would be owned by the media within two years, left the company. They later changed the name and mandate of the Football Fund: “There was a lot of hype about the growth potential in the sport and media industries and, inevitably, some of this was overdone. To some degree it was not the best thing to have launched then.”
Cable company NTL bit off so much more than it could chew that various Heimlich manoeuvres weren’t enough to stop it going into bankruptcy in 2002, saddled with £12 billion of debt. Its subsidiary Premium TV had a deal to produce the websites for all Football League clubs; this was hastily restructured from £35m to £5m with an increased share of future revenue.
Football League clubs had already suffered from the £125m collapse of ITV Digital, which went into administration in March 2002 after struggling to stand up its £315m contract to show League matches. The League sued ITV Digital’s joint owners Granada and Carlton and lost.
Boro TV closed in in July 2005 after NTL withdrew funding. The name lives on via former producer Adam Nolan, who now does Boro’s in-house matchday highlights and season videos.
Although club channels didn’t become the roaring success many had envisaged, MUTV became the most popular. Having learned the broadcast ropes, United eventually bought out ITV’s 33% in November 2007 – for £3.3m, around a tenth of the fee Fergie had just paid for Anderson and Nani – and BSkyB’s similarly-sized slice in January 2013, to wholly own the channel.
Rupert Murdoch replaced Mark Booth as BSkyB chief exec with Tony Ball; four years later, he replaced Ball with his son James Murdoch. He still has his fingers very actively in various media pies: in July 2016, at the age of 85, he was named the acting CEO of Fox News after the incumbent resigned due to claims of sexual harassment.
Stephen Byers was forced to leave the Cabinet after it emerged that his political advisor had sent an email on 11 September 2001 saying it was “a very good day to get out anything we want to bury”. He was later derided as part of the 2009 furore over MP’s expenses claims, and banned from parliament for two years after the 2010 cash-for-influence scandal.
IMUSA continues to represent Red Devils fans. In 2005 its erstwhile chairman Andy Walsh became one of the founders of FC United of Manchester, a phoenix club protesting the Glazers’ involvement. Walsh left the Rebels in 2016 and is now on the board of Wythenshawe Amateurs.
Michael Crick’s 2002 book The Boss: The Many Sides of Alex Ferguson won him no fans among the United hierarchy, but it’s among FourFourTwo’s 50 Best Football Books. SUAM became Shareholders United and then the Manchester United Supporters’ Trust (MUST), the largest such trust in the country with 200,000 members. It hopes to buy a stake in the club if the chance arises.