Minding their own business

Patrick Harverson explains why the football authorities' waiving of their own rules will make more corporate takeovers difficult to prevent

It is understandable that there is a lot of anger within football about the proposed takeover of Manchester United by Rupert Murdoch’s British Sky Broadcasting. Any deal that combines the country’s most-liked club with its most-feared media tycoon is bound to go down like a lead balloon.

Yet, as deservedly unpopular as Rupert Murdoch is, it should not be just the identity of the buyer that sets the alarm bells ringing. It is the principle of corporate ownership that disturbs most. When any large corporation – particularly one whose main business is not even sport, let alone football – buys a club, fans should start worrying.

Supporters at Old Trafford might feel happier if it were Richard Branson rather than Rupert Murdoch taking control of their club, but the thought of a Virgin-owned United should be just as troubling as a BSkyB-owned United – even if the latter does raise more obvious questions about conflicts of interest and abuse of power in the sports broadcasting market.

People might ask what is so different about the Murdoch-style corporate ownership that has prevailed at many clubs for the last few years. After all, the board of the stock market-listed public limited company which owns Manchester United has made all the big decisions since the club floated on the stock market in 1991.Why should it be any different when the new owner is also a stock market-listed plc, al-beit a much bigger one?

Answer: because at least when Manchester United plc was taking decisions that affected the club it was considering the best interests of the company, whose main and only business happened to be running a football club (admittedly one with a large merchandising operation attached). The majority of the plc’s board members were people with long links to the club – Martin Edwards, Maurice Watkins, Amer Al Midani – with a good understanding of football and United’s place within it.

However, if and when BSkyB takes control of United, the most important decisions about the club’s future will be taken by executives of a company whose main interest is selling as many subscriptions to its pay-television channels as possible. In fact, it will be worse than that.

BSkyB is controlled by Murdoch and makes up part of his global media empire. So the biggest decisions will be taken in Los Angeles, home to News Corporation’s headquarters. Those decisions will have to be implemented in London by BSkyB which, in turn, will have to be implemented by Manchester United, sitting at the bottom of the decision-making chain.

Consider two examples: a breakaway European super league and pay-per-view television. An independent club might consider the interests of its supporters – who appear opposed to both a breakaway super league and pay-per-view – before committing itself to either endeavour. A corporate-owned club (especially one controlled by a broadcasting group) would have little or no choice. Because of the profits involved for the participants, the executives at head office in Los Angeles, London or wherever would sign the club up for the super league and pay-per-view with barely a moment’s hesitation.

In United’s case, Martin Edwards may have been promised a place on the BSkyB board, but he will be a football man in a minority of one. And he will have no say in decisions taken by the board of BSkyB’s ultimate owner, News Corp. That corporate giant has, in practice, a board of one in Rupert Murdoch, a businessman with a penchant for challenging established orders (and thus a fondness for breakaways – remember Wapping?) and with a huge interest in the development of pay-per-view in Britain.

Yet, it must be said that not all forms of corporate ownership in football spell trouble. Inevitably a few exceptions can be found. Since the mid-1990s Preston North End has been owned by Baxi, a locally based industrial company. This is one case where the relationship between owner and club is a healthy one because Baxi has roots in the local community and, as the largest employee-owned manufacturing com-pany in Britain, understands how to run its commercial affairs in the pursuit of not just profits but the wider interest. The main reason Baxi bought Preston was to strengthen and deepen its ties to the local community, not to earn profits for the company (although it helps if it does).

Unfortunately, in football’s brave new world, the big clubs are not going to be bought by the Baxis of this world. After BSkyB’s bid for United was revealed in the papers, the rumour mill linked scores of clubs with big corporate names like Sony, Carlton Television, Time Warner, Granada and (God help us) Disney. Not all of the rumours were particularly well-founded in truth, but football fans got the drift – football was playing with the big boys now.

But is there anything that can he done to stop the corporate takeover of top-flight football? Sadly, no. The Football Association used to have rules governing this sort of thing, and restrictions on matters such as club ownership, dividend payments and boardroom pay. However, those rules have either been waived or largely ignored by the sport’s authorities in the rush to accommodate the commercial imperatives of late 20th century football.

This was not entirely ill judged – a decade ago football was a struggling sport badly in need of investment – but the game’s governors must have known that once the genie was allowed out of the bottle, there was no getting it back in. And there is no point blaming the stock market. Floating a club  and spreading ownership widely was always going to expose it to the threat of a takeover by outside interests.

Yet private ownership is not necessarily much help either. If a Time Warner or a Carlton were to offer huge sums of money to David Moores for his shares in Liverpool, or Douglas Hall for his shares in Newcastle, what is to stop them selling up and moving on? Nothing, except their consciences, perhaps.

It is an irony that football’s best hope of protection is government, which over the years has displayed little inclination to help the sport in its many hours of need. However, the growing opposition to commercial exploitation of fans and the corporatization of clubs has at least attracted the attention of a populist, supposedly football-supporting Labour administration. BSkyB’s bid for United is already under official scrutiny and the government might be tempted to block the deal in the broader interests of the game.

Don’t bet on it. Sure, the government would like to be seen to be doing the right thing for football, if only for public relations purposes. But it also serves the corporate constituency, and for more compelling reasons. One supportive international media mogul is worth a lot more to any government than hundreds of thousands of grateful football fans.

If football really is big business these days, then perhaps it was always inevitable that big business would one day covet a more involved role in the people’s game. It is just a pity that the people can do nothing about it.

From WSC 141 November 1998. What was happening this month