BECTU evidence to MMC Inquiry into the proposed merger between BSkyB and Manchester United

19 November 1998

1. BECTU, as a trade union representing 30,000 workers in the media and entertainment sector, has a long-established interest in issues of concentration of ownership in the media. We have a number of specific problems with the proposed merger, and were concerned enough to put forward a motion to Labour Party Conference on this issue (not debated, under the new Conference structure).
2. We believe the proposed merger raises serious competition issues, and that these are compounded by the fact that the media is a sector in which monopoly powers have a resonance and a danger far beyond a narrowly economic one. These are many general agreements against monopoly, but these are particular additional arguments against excessive concentration of ownership in the media. These concern the need for diversity, representativeness and freedom of expression; for a plurality of views and interests to be expressed and reflected. We therefore urge particular caution when one of the parties involved – BSkyB – is part of a media conglomerate, News International, with powerful existing interests throughout the broadcasting sector – including production, distribution and conditional access technology.
3. Turning to the particular issues raised by this proposed merger, we believe that it would confer a monopoly in the discrete and lucrative market for televised football in the UK – a monopoly in the very area of broadcasting which together with feature films is widely regarded as the key to long term future dominance in subscription and pay-per-view television. We believe this is clearly against the public interest and should be disallowed.
4. BSkyB already holds a position of marked influence in the market for televised football – as evidenced by its frequently demonstrated ability to determine the dates and times of fixtures, and by its power to limit terrestrial coverage of Premiership football to highlights only. With the Premiership television rights due for renegotiation in 2001, BSkyB's ownership of Manchester United would give it major leverage on both sides of the negotiating table and would, in our view, move the company from a position of already undue influence to unacceptable monopoly powers. This would be neither fair competition with other television companies – nor, for that matter, with other football clubs.
5. If, as is possible (and is, we understand, a matter of separate investigation by the Office of Fair Trading), the collective system of negotiation through the Premiership were to break down and be replaced by individual clubs negotiating their own television rights, BSkyB, as the owner of currently the most financially powerful and largest supported club, would again be in a potential monopoly position. BSkyB would be able to exploit Manchester United's dominance within football, to provide the club with financially advantageous deals compared to other clubs and to effectively exercise a power of veto within televised football (since many broadcasting deals would not go ahead without Manchester United's agreement and participation).
6. For these reasons alone – which rest on consideration of the broadcast market – we believe the merger should not be allowed. We also believe that there are additional reasons concerned with the impact on professional football why the merger is not in the public interest. Professional football is easily the most popular spectator sport in the UK; the 'People's Game' is not a misnomer. The game's popularity – built over generations – has rested on a genuine degree of openness in competition, even at the highest level. This is still recognised to some extent within the current Premiership television deal, under which 50% of the monies are spread equally among all 20 clubs. If the merger is allowed, this is likely to come under pressure to change, with both BSkyB and Manchester United having a vested interest in redistribution of revenue on a basis that is more favourable to them but less equal overall. If the collective negotiations were replaced by individual club negotiations for TV rights, there would very quickly, in our view, develop an extreme disparity between the TV revenues flowing to a handful of dominant clubs (principally Manchester United) and the rest.
7. We further believe that there is a broader public interest in preserving professional football from total control by the media marketplace. In the long term, it is easy to see a future in which the timing of games, the structure of competitions, the rules of the game and even the location of clubs (on a franchising basis) are all subject to corporate media interests. These would be unwelcome and undesirable developments in a game which historically owes its popularity to its supporters and in relation to which the media companies are ultimately not benefactors but parasites. We believe the MMC should have regard to these broader public interest issues as well.
8. For these reasons we oppose the proposed merger and hope the Commission will take account of these views. We accept that the whole issue of the links between media interests and professional football is beyond the scope of this MMC Inquiry. We would therefore like to recommend that a broader public inquiry be established into this matter.