LONDON--There is one reason media mogul Rupert Murdoch
would spend $1 billion and change to buy Britain's most revered soccer team--more than
three times what he paid for the Los Angeles Dodgers--and it is not just to tweak the
noses of Manchester United fans.
Even more than potential profits, owning one of the leading
teams in the world's most popular sport gives Murdoch's News Corp. enormous clout with
broadcasters worldwide, while guaranteeing that its games never leave the company's
flagship satellite service, British Sky Broadcasting, an international cable news and
entertainment network that is the dominant pay television source in Britain.
Murdoch also may hope to make money on the deal, which was
accepted by the Manchester board on Wednesday. While few professional sports teams in the
U.S. throw off a lot of profits, Manchester United is a publicly traded company and a
highflier on the stock exchange here, with a healthy bottom line due to the global appeal
of soccer and the team's hefty take from selling television rights.
Owning the team could also assist Murdoch's ambitious plan
to form a new European soccer league and give him an inside track on broadcast rights to
those matches to feed his worldwide television interests. That empire includes BSkyB,
Japan's JSkyB, Asia's StarTV and the Fox broadcast network in the U.S., where News Corp.
also owns a constellation of regional sports channels.
BSkyB, 40% of which is owned by News Corp., has agreed to
buy the team, subject to shareholder and government approval, for about $1.06 billion. The
price tag--the most ever paid for a sports club--is considerably greater than the $977
million leaked to the British press earlier in the week.
Manchester United fans are furious over what they call a
"sell-out," fearing that Murdoch will take the team's games off free television
to drive pay television sales. In Britain, Murdoch is largely distrusted as an
Australian-born billionaire who seems to eat up national institutions.
In addition to owning BSkyB, Murdoch already has two
important daily newspapers here, the respected Times of London and the Sun tabloid. He
also enjoys a friendly relationship with Labor Prime Minister Tony Blair, while his
daughter is buddies with Trade and Industry Minister Peter Mandelson.
Soccer fans feel this landmark deal has everything to do
with worldwide television interests and very little to do with the game they hold dear or
the red-and-white team they love. Manchester United is to soccer what the Yankees are to
baseball, a national icon known around the globe.
"We're going to fight Murdoch," said Andy Walsh,
chairman of the Independent Manchester United Supporters. "He's not going to come in
and just take our club. . . . He's not got the interests of Manchester United at heart.
He's got the interests of Rupert Murdoch at heart."
Love of Game or Field of Green?
Murdoch's Sky TV already owns the rights to most live
broadcasts of soccer matches in England's Premier League. His purchase of Manchester
United has some members of Parliament claiming that he is forming a sports monopoly and
they are calling for intense government scrutiny of the deal.
Murdoch has long promised to use sports as a "battering
ram" to capture the international television market and he knows from experience that
what sells cable subscriptions is sports broadcasting. His Sky network subscriptions more
than tripled after he bought the rights to Britain's Premier League games.
And Murdoch's aggressive bid for rights to the National
Football League in 1994 validated Fox as the fourth U.S. broadcast network.
But fans of the game that Europeans call football are
Former Manchester United manager Tommy Docherty said,
"I doubt very much if he even knows where [Manchester stadium] Old Trafford is. . . .
Not being a football man, he will not understand the true feelings of football
Indeed, Murdoch had never been to a baseball game before
buying the Dodgers earlier this year for an unprecedented $311 million. And his immediate
replacement of longtime team managers and trade of star catcher Mike Piazza irked fans,
who saw the moves as heavy-handed.
In Britain, Murdoch's Sun tabloid dismissed the objections
as "hysteria" whipped up by naysayers.
"Anyone would think BSkyB wanted to close Old Trafford
down, not pump millions into it," the paper said. "Just look what BSkyB has done
for football. In six years, it has invested almost 700 million pounds [$1.2 billion] that
has transformed the national game. Foreign superstars queue up to play here while
home-grown stars no longer head abroad. BSkyB cash has helped rebuild stadiums, providing
21st century facilities for fans. Most important, Sky channels have set award-winning
standards for coverage of sport."
The sale is subject to government approval, but they suggest
that the government will hesitate to block the huge Murdoch deal for fear of retaliation
from the politically powerful Times and Sun.
"This deal is riddled with conflicts of interest,"
the Guardian wrote this week.
The sale has caught the sports world by surprise, although
it should have been predictable.
Murdoch's Fox Television Network bought the Dodgers last
year and owns TV rights to 22 of the top 33 baseball clubs. It also broadcasts National
Football League and National Hockey League games and owns interests in the Los Angeles
Lakers and New York Knicks basketball teams and New York Rangers ice hockey club.
In Europe, Italian television tycoon Silvio Berlusconi owns
the A.C. Milan soccer team. But while Berlusconi is a TV magnate with a team, he is seen
as a genuine sports fan with his own ballclub, much like CNN founder Ted Turner with his
Atlanta Braves baseball team. Murdoch's purchase, on the other hand, is seen as an
aggressive corporate move into the world of soccer. It is confirmation that soccer teams,
once family-owned enterprises and a source of community identity, have become
mega-businesses beyond any community's control.
Murdoch stands to gain from his investment in several ways.
Both he and Berlusconi are promoting the creation of their
own European Super League of soccer to take power and television revenue away from the
current umbrella group, the United European Football Assn. They want to own the television
rights to the competitions between Europe's best teams--and sell the broadcasts via
pay-per-view--without sharing the profits.
Critics say this would mean fans will have to pay for the
Wednesday-night European games they now receive for free on commercial television
throughout the Continent.
In Britain, Sky network, with multiple sports stations
available via satellite and cable, already has a four-year, $1.1-billion contract to
televise Premier League games. To receive BSkyB cable, and Britain's best soccer matches
on broadcast, sports fans must pay about $62 a month.
Murdoch hopes to renew the contract when it expires in 2001.
But in January, a British court will decide whether England's clubs can negotiate
individual deals and sell coverage of games directly to fans via digital television,
without sharing the proceeds with television companies.
Sitting 'on Both Sides of the Table'
With Manchester United in his pocket, Murdoch can win either
way. If the court allows another league-wide contract, Murdoch goes to the negotiating
table as both the owner of a major team and the TV network seeking broadcast rights.
"What Murdoch is trying to do is sit on both sides of
the table at once," said Joe Ashton, a Labor member of Parliament and chairman of the
House of Commons' cross-party group on soccer. "That can't be fair trading, and it
can't be in the public interest."
Independent analysts note, however, that Manchester United
is but one of 20 teams in the Premier League and Murdoch's ownership is not likely to be
considered a corner on the market.
If the Restrictive Practices Court decides that soccer teams
may sell broadcast rights directly to viewers, Murdoch also wins as the owner of the
country's richest team. Manchester United already has its own digital channel, launched
last month to broadcast team news, reports and archival footage. Sky also is about to
launch its own digital TV service.
Finally, Manchester United's international popularity is a
merchandising bonanza for Murdoch. Manchester mugs, T-shirts and tea towels are the most
sought after of those with team logos. Manchester United even has its own magazine, which
helps to sell its name and goods around the world. Now, the team will be advertised around
the world on Sky television.
BSkyB responded to public fears and criticism over the deal
with an open letter to Manchester United fans on the official electronic announcement
system of the London Stock Exchange.
"We want to reassure you about one thing above all:
BSkyB [is] going to let Manchester United be Manchester United. . . . BSkyB appreciates
that this is a club with a phenomenal heritage and the most passionate fans in the world.
It is not just another business, it is part of the cultural fabric of Manchester and the
nation," the letter said.
The response of soccer fans gathering for a Manchester
United home game Wednesday night was less than enthusiastic. They unfolded huge
red-and-white banners with the words "Sold Out."
Times staff writer Sallie Hofmeister in Los Angeles contributed to this
Copyright 1998 Los Angeles Times. All Rights Reserved