Murdoch's BSkyB pays $1.04 bil for Manchester United
LONDON — Rupe has put the ball into the back of the net.
The board of Britain’s famed Manchester United soccer club has accepted the media mogul’s bid to buy its franchise for a whopping $1.04 billion.
The news that satcaster British Sky Broadcasting — which is 40% owned by Murdoch’s News Corp. — was set to take over the Red Devils, the most profitable soccer club on the planet, sent shock waves through the U.K. and the sports world.
Not only would it be the first time that a broadcaster has bought a British soccer club, but by clinching the venerable Manchester, known as “Man. U,” Murdoch will gain the crown jewel of the English Premier League — the most important soccer league in the U.K., and one of the biggest in Europe.
Word of the sale emerged after a Manchester United board meeting ended late Tuesday; the bid is $84 million more than Murdoch’s original offer of $960 million (Daily Variety, Sept. 8).
During a day of tense negotiations, BSkyB offered $3.63 a share, rising to $3.80 and then finally to $3.96. According to wire reports, Murdoch was ready to walk away on several occasions. The deal finally was signed fifteen minutes after his deadline.
Shares in Manchester United were trading down slightly at $3.30 in London on Tuesday.
Although the transaction still faces regulatory hurdles, such as the U.K.’s Labor government submitting it to the Office of Fair Trading — specifically the Monopolies and Mergers Commission — approval by the Manchester United board would suggest that it is virtually a done deal.
Nonetheless, Man. U fans and some politicians already are howling in protest.
Joe Ashton, a Labor lawmaker who heads an all-party parliamentary committee on soccer, called the deal a “monopoly of the market.”
Many British people already view Murdoch as an unchecked media baron, and this deal is unlikely to reassure them. But British premier Tony Blair has assiduously courted Murdoch to the Labor cause, and he may not want to risk alienating him — and his media outlets — by vetoing the deal.
Eye to future
BSkyB already has exclusive rights — acquired for over $1 billion two years ago — to broadcast the Premier League until 2001. Acquiring Manchester is an ace up the sleeve for future rights negotiations, in that it would be difficult for other teams not to follow in the commercial footsteps taken by the leading club.
Manchester United is already partnered with BSkyB MUTV, the team’s digital TV channel that will launch as part of BSkyB’s Sky Digital platform on Oct. 1. Man U. expects to generate more than $170 million in TV sales this year.
And, aside from the TV powerplay, Manchester is a hugely successful business in its own right. The club has a lucrative merchandising division and a loyal fan base.
Man U is one of the wealthiest and most successful clubs in Britain. It won the Premiership in 1993, 1994, 1996 and 1997, and came in second in 1998.
It also supplies many of the key players to England’s national side, including Teddy Sheringham, Paul Scholes and the headstrong David Beckham, best known in the U.S. for being thrown out of England’s crucial world cup match against Argentina in June.
Murdoch has made no secret of the fact that he intends to use sports as the key wedge of his international pay TV interests. Early this year, he acquired the Los Angeles Dodgers for $360 million. He also holds shares in the National Basketball Assn.’s New York Knicks and the National Hockey League’s New York Rangers.
Reps for Murdoch and News Corp. declined to comment.
(Reuters contributed to this story.)