Rupert Murdoch may have been rejected but Manchester United fans are expecting another takeover bid, as Michael Crick explains
When Stephen Byers’s announcement came, it didn’t actually surprise us. It had been clear since late January, when six members of Shareholders United Against Murdoch (SUAM) attended a hearing with the Monopolies and Mergers Commission (MMC), that they were taking the competition arguments against BSkyB much more seriously than we’d realised.
What’s more, we were pretty confident that the Trade Secretary would come up with the goods. Nobody ever seems to know much about Stephen Byers, but he clearly has much firmer roots in the North East Labour movement than his predecessor, Peter Mandelson, and so would find if hard to brush off the anti-Murdoch, pro-football arguments.
Byers had also given a clear sign of his feelings about the Sky bid at the Labour Conference last October, ten weeks before taking over at the DTI. Lobbied by a Manchester councillor, the soon-to-be Trade Secretary had explained that since he was as a member of the government he wasn’t allowed to express any public views about the takeover. But then, as Byers turned away, he gave the councillor a thumbs-up sign.
In the end, however, it wasn’t really Stephen Byers’s decision. The Monopolies Commission report was so unequivocal that it would have been almost impossible for any Trade Secretary to let the bid go through – as Peter Mandelson himself admitted only a few days afterwards – and it would have been particularly difficult for Byers to overturn such an emphatic MMC recommendation when he’d announced only four weeks earlier that in future ministers should no longer have any role in competition issues, and that takeovers should be left to a new, independent Competition Commission.
The really political decision was by Peter Mandelson himself last autumn, in deciding whether or not the case was worth referring to the Monopolies Commission in the first place. And by all accounts it was a pretty close-run thing. Mandelson, it seems, was instinctively inclined to let the bid go through without bothering with the MMC. He was persuaded otherwise by the mounting concern from within the Labour Party, and by pressure both from fellow ministers such as Gordon Brown and Chris Smith. And that pressure had in turn been fuelled by the campaigns organised by fan groups like ourselves and the Independent Manchester United Supporters Association (IMUSA).
Once it had gone to the MMC, SUAM concluded that the important focus was no longer the political arena, but the competition inquiry. We were soon into obscure realms of economics and law – areas so technical that most journalists and so-called City experts couldn’t be bothered to explore them properly. Lazily, they all followed the conventional wisdom that the bid was bound to be approved.
Not long after the bid was announced, IMUSA had been approached by the City law firm Lovell, White & Durrant, who gave them many thousands of pounds worth of expertise from a team of five lawyers free of charge. But Lovell’s pro bono work didn’t extend beyond October, so it helped when SUAM suddenly discovered that one of Britain’s top academic experts on competition law is also a keen United fan. He in turn led us to other City lawyers who were again willing marshal the arguments for us on a pro bono basis, most notably the firm Rosenblatt. Say what you like about lawyers, but without them we would have been lost.
It greatly helped, of course, that all the authorities governing broadcasting and football – the BBC and the Independent Television Commission, the Premier League, the Football Association and the Football League – all urged the MMC to block the bid. But the most unexpected boost came from the appalling complacency of our opponents, BSkyB. “I don’t know why you’re bothering,” taunted Sky’s press officer, Tim Allan, when I rang him during a quiet moment. “It’s a complete waste of time,” he insisted. “And you’re bound to lose.” Sky ran one of the worst PR campaigns in corporate history, from the inability of their then chief executive, Mark Booth, to name the United left back at the initial press conference, to letting the Old Trafford goon squad stop SUAM members from handing out leaflets, in full view of television cameras.
United and Sky spent millions on lawyers, bankers, lobbyists and even General Pinochet’s spin-doctor, Lord Tim Bell, yet not a single politician switched to the Murdoch camp. For years to come, in business schools around the globe, the Sky campaign will be cited as a text-book example of how not to win over public and political opinion.
It would be easy now to sit back and celebrate, and concentrate on watching United. To do that would be just as complacent as BSkyB. Another takeover bid must be likely, especially when Martin Edwards is so keen to sell his 14 per cent stake, and he’s obviously so furious with us fans who helped blocked the Sky bid that he could do anything in a moment of rage and revenge. Sky, too, may want to get rid of the 11 per cent they bought, while City institutions are likely to accept any good bid that comes along.
People are already manoeuvring behind the scenes. Yet next time round there may well be no competition issues and no MMC to rescue us. Our hope must be that any future bidder shows a more convincing and passionate commitment to Manchester United, and is happy to let the 28,000 individual shareholders retain their stake, and their small say, in the club.
SUAM will now shed the words “Against Murdoch” from our title and reconstitute on a more formal footing as Shareholders United. We’re already talking to City lawyers and accountants about the possibility of forming a trust to pool the voting rights of small shareholders who want to protect the club’s independence and promote the interests of fans.
By far the best way to deter future bidders, however, is for more United fans to buy shares – not for financial reasons, I should stress, but to preserve the pluralistic ownership of the club. The trouble is that until recently many United supporters have felt that buying shares isn’t their kind of thing. Many saw the flotation in 1991 as another part of the growing commercialisation of the club and so felt it was wrong to encourage such moves by participating in it. The more politically committed shied away from what they saw a capitalist act. And even now few people understand just how easy it is to buy shares in Manchester United. The 28,000 individual shareholders still represent less than one in a hundred of this country’s three million United supporters.
If a lot more fans had bought shares when United floated eight years ago, then none of this might ever have happened. If individuals owned 46 per cent of the shares, say, rather than the current 23 per cent, then Rupert Murdoch probably wouldn’t have bothered to bid for United in the first place.
From WSC 148 June 1999. What was happening this month