Media groups still hope to net football clubs
A change in Britain's competition law and a challenge at the European Commission may open the way for Sky to try again. By Tony Fraher
Sunday 15 August 1999
Now BSkyB, that owns 11 per cent of Manchester United after its aborted bid for the club, is said to be looking at copycat investments in a whole host of other Premier League teams.
Last April's verdict from the Monopolies & Mergers Commission, now the Competition Commission, to block BSkyB's bid for Manchester United appeared to have pre-empted the media sector's ambitions on the football field. But the sanity of the commission's draconian line now seems questionable. For a start, while the commission may stop a UK media group taking over a UK football club, it may meet difficulties if a continental media group tried the same thing. The issue would then be for the European Commission and largely outside the UK remit. The EC takes a more open approach on media ownership of football clubs across Europe. Paris St Germain, for instance, is owned by Canal Plus, which also owns Servette in Switzerland. Across Italy, it is quite common for media groups to have controlling positions in many of their clubs.
The other issue which has prevented media companies investing in football clubs was the decision of the Restrictive Practices Court to uphold the legality of the Premier League's TV contract with BSkyB. The Office of Fair Trading had challenged the Premier League's right to negotiate an exclusive contract collectively on behalf of all 20 clubs, but the RPC last month rejected the complaint.
But this decision flew in the face of the European Commission and other national competition authorities which have condemned this practice. They have now said that they will re-examine the Premier League's television arrangements, particularly the principal of selling the rights collectively. With Italy, the Netherlands, Spain, Germany, France and Greece already challenging the right of their national leagues to forge exclusive deals such as BSkyB's, the RPC appears to be swimming against the tide.
A European Commission ruling on collective selling would take precedence over a contradictory UK ruling. Add to all of this the fact that the Restrictive Practices Act, under which the Premier League case was heard, is due to disappear in March next year, to be replaced by the Competition Act that is far more Euro-friendly, and the potential for a complete overturn of the current situation with the Premier League increases very significantly. The anticipation that clubs will be able to negotiate television deals independently which, in part, has prompted the latest flurry of stake- building by media groups.
In the words of the song by Bruce Springsteen, there are 57 channels and there's nothing on. The fast-growing TV monster must be fed and it is growing in both size and appetite. The easier and, by happy coincidence, most popular broadcast diet is football. Media groups are positioning themselves to secure the rights for individual clubs once the Premier League's existing agreement terminates in 2001.
The scope to increase product availability and satisfy the audience appetite is there. At the moment only 60 Premier games out of 380 are broadcast. This represents about 100 hours of football on TV for an estimated football audience of 18 million. In Spain, Italy, Germany and France, where the audiences are about the same, the equivalent hours broadcast range from 400 to 600.
By 2001 we will certainly be talking about an extended and enlarged Champions League, possibly even a pan-Europe competition. Negotiations for this will take place on a totally different basis to the existing TV arrangements. Early indications of this have already emerged with this season's Champions League which traditionally has been shown on ITV.
This year, though, there will be two games a week involving English clubs - for as long as they survive. ITV will show the Wednesday game live. But ONdigital will have the live rights to the other match which will be shown on Tuesdays. So all you have to do to watch both is get one of those little free boxes, pay your connection fee, sign the direct debit for your monthly subscription, and listen to the tills ring for media groups and their future subsidiaries, football clubs... Oh, and watch Gerry Robinson gets rich.
Tony Fraher is chief executive of Singer & Friedlander Investment Funds and the director of the Football Fund.
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