Media: Reducing Old Trafford to a T V studio

It is Murdoch's vision to turn Manchester United into the ultimate cash machine.
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Ten years ago, in the back of a limousine, I asked Rupert Murdoch, then my boss: "Why don't you buy Manchester United?" At the time, the ownership of the club was in play, and it subsequently fell into the control of Martin Edwards. This was before he turned Manchester United into a merchandising colossus and public company, for which British Sky Broadcasting is now offering pounds 565m.

Murdoch did not act on my advice and buy the club in 1988, even though he would have saved himself more than pounds 500m had he done so. I am left merely a prophet without profit. To be fair, Murdoch did have another matter on his mind at the time, launching Sky Television, a gamble that almost cost him his company.

What took him so long? In exactly three weeks, Murdoch is launching digital television in Britain. His "battering ram", as he calls it, to drive sales both of dishes and to kick-start subscriptions, is, as ever, sport. BSkyB is already creating a private television station for Manchester United. Buying the whole club now offers him not only a seat at the high table of the world's richest sport, and at a crucial moment with talk of new leagues, but also a pay-per-view television business to drool for - a "virtual" Old Trafford of unlimited seating.

Murdoch enrages. A decade ago, launching Sky, Murdoch was accused of destroying the delicate ecology of British broadcasting (in fact, he unleashed an explosion of competition). Then, when BSkyB bought the exclusive rights to televise football's new Premier League, there were dire warnings that this would destroy the national game as we knew it (in fact, his money paid for the game to reinvent itself). Now, the alarm bells are ringing again. What is at stake is more than mere commercial imperative, it is argued. If Murdoch buys United, it would threaten the soul of football. And the arguments are not just sentimental. It is perfectly obvious that Murdoch's aim is to monopolise top-level football, and the Government must stop him. But how?

Notwithstanding the dramatic intervention on Sunday of Tony Banks, the sports minister, who angrily demanded that the deal be scrutinised for competition implications, this is an issue that the Government will not relish deciding. It is therefore certain that it will pass the ball to the Office of Fair Trading, and ask it to examine the deal in the light of the new Competition Act.

Emotion aside, to have any hope of stopping this deal, Murdoch's opponents need to address a specific point: just what is the substance of the competition problem here, if any? Emotion and woolly thought won't do.

On Sunday, as this story broke, critics advanced what can only be called the "stranglehold" argument. The term was first used in the Sunday Telegraph, which quoted a senior Labour backbencher as saying that the deal would give Murdoch a "stranglehold on sport in this country".

This theme was repeated by the BBC, which quoted, among others, the Sunday Telegraph's own sports editor, Colin Gibson. Mr Gibson was reported to have said that there was no doubt that the deal would give Mr Murdoch a "stranglehold" on English football. Later in the day, I read on the Internet a story from the news agency AFP, reporting from London that the deal would give Murdoch a "stranglehold" - without quoting anyone at all.

Unfortunately, while strangleholds are scary, the term is not one with much economic or legal meaning. Some improved arguments were being advanced in various newspaper columns yesterday. The best of these so far is the apparent problem that Murdoch could be negotiating on both sides of the battle for football television rights. These arguments are, I suspect, where the battle will be fought.

Critics have another burden: Murdoch will have plenty of arguments of his own. Making them will be his formidable chief economist and global troubleshooter, Dr Irwin Stelzer. He has a formidable story to tell: BSkyB is risking hundreds of millions in a gigantic gamble. It is creating thousands of new jobs.

And just why should Murdoch not buy a source of sports programming, just as he owns a film studio that sells its products to his television stations? Can it really be unfair competition if Murdoch has a seat in the councils of the Premier League? There are after all 19 other Premier League teams, hence Murdoch's vote is only 5 per cent; other media companies can buy clubs, too, and many already have. Are all the other football chairmen patsies?

As for the fans, Dr Stelzer can argue (as The Sun already has) that they can only benefit, as the burden of buying new players and improving facilities is shared by those watching on television.

Furthermore, there is plenty of precedent for this deal, both in Britain and globally. The late Robert Maxwell, formerly proprietor of Mirror Group Newspapers (and a shareholder in this one) owned Oxford United. In Europe, the merger of media and sports teams is an old story. Silvio Berlusconi built his television empire alongside AC Milan (and Milan repeatedly won both Italy's Serie A and the European Cup with the players his money brought). In America, Ted Turner turned a marginal station in Atlanta into a "superstation" by putting it on a satellite and broadcasting the games of his own baseball team, the Atlanta Braves. Murdoch himself, of course, owns American baseball and basketball teams.

Like it or not, Murdoch is showing the way to a radical new synchronicity of sport and media. We may deplore this, but not so as to stop it from becoming a template for 21st century entertainment. It is Murdoch's vision (but not his alone) that colossal pay-per-view revenues turn sporting arenas into the ultimate money machines. This will occur regardless, and not just in Manchester. Old Trafford and the other great stadia in Britain may be hallowed turf for the faithful, but, in the age of digital media, a football ground is a television studio with attached superstore, whether Murdoch owns it or not.