Outlook: Football and business don't mix

THE FINDINGS of the Monopolies and Mergers Commission against BSkyB are so unequivocal that it seems hard to believe any merger between a broadcaster and a Premier League football club will now be allowed to go ahead. The Commission's principal concern was that Sky's takeover of Manchester United would adversely affect competition between broadcasters for TV rights. But to this, the Commission added a second, more general concern - that the merger would "damage the quality of British football" by reinforcing the division between larger, richer clubs and smaller, poorer ones.

The rights and wrongs of these conclusions are for others to debate. The effect, however, is significantly to reduce the commercial and investment potential of football. That there was ever anything to be had in this department was, perhaps, always something of an illusion.

As businesses, football clubs tend to be badly, sometimes corruptly, managed organisations which neither abide by, nor aspire to, the usual rules of publicly quoted companies. Often they struggle to make a profit, let alone a decent return. Because success on the pitch is regarded as a greater priority than the quality of the accounts, any surplus funds tend invariably to be ploughed back into ever more expensive players.

It is often said that Sky's deal with the Premiership has transformed the finances of the game. The reality is that it has transformed the pockets of its leading players. With few exceptions, the financial strength of the clubs has hardly improved at all, despite all Rupert Murdoch's money.

The upshot is that the great bulk of these companies are not worth what they sell for. Certainly, present valuations seem hard to justify if bids by broadcasters are now to be ruled out of court, confining these clubs to their cash starved, uncommercial past. This applies not just to those clubs immediately affected by the rulings - Manchester United and Newcastle United - but to the broad mass of other quoted football clubs too. Unbundling the Premier League cartel, allowing clubs to sell TV rights individually, perhaps through pay-per-view, could help the game financially, but the benefit will again be confined largely to the top clubs.

Investors were chasing a mirage when they piled into these companies. The MMC has spelt this out in black and white. It is apparently perfectly all right for broadcasters to own and generate their own content when it comes to news, drama and popular entertainment. But when it comes to sport, forget it. For sport, it seems, different rules apply. The same might be said about sport and stock market investment. The two of them just don't seem to mix.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003