The DTI's final decision should be announced within the next couple of weeks, following recommendations from the Monopolies and Mergers Commission's six-month review into the takeover.
"The MMC report says the takeover is against the public interest," said a source close to the report. "But it suggests a number of remedies and stiff conditions which, if applied, mean that the deal should go through."
These conditions are aimed at preventing Mr Murdoch using new leverage over the game to benefit his broadcasting interests. The satellite company will be excluded when the Premier League resumes negotiations over television rights once BSkyB's exclusive contract runs out in 2001. Manchester United will also be restricted from voting on the deal, avoiding accusations of a conflict of interest. If these are implemented, there is nothing anti-competitive about the takeover. BSkyB will be joining other broadcasters which own football clubs, such as French broadcaster Canal Plus, which owns Paris St Germain, and Italy's Mediaset, owner of AC Milan.
"I can see no grounds for it to be stopped," said Nick Batram, analyst at Greig Middleton. "I can understand why it was referred, because it is the first deal of its kind and we should look at all the implications very closely. But Manchester United still only has one vote on the television deal despite its size."
The MMC's decision will outrage football fans concerned at how commercial the game has become. "It is bad for football and bad news for Manchester United's supporters," said a spokesman for the Shareholders United Against Murdoch group. "The club will be selling out and we are still convinced the deal will fail."
The Government is keen for the deal to go through to prevent football shares plummeting. Shares in Manchester United plunged from 240p to 219p on 16 March following speculation about the report.
The DTI's decision does not just affect BSkyB. NTL, Britain's third-largest cable company, is planning a pounds 160m purchase of Newcastle United. "We are waiting for the ruling from the DTI," says a spokeswoman for NTL. "If the deal is off for Manchester United, it is likely that ours could be off too."Reuse content