Outlook: First round to Murdoch, nine to go

BY RAISING its bid the extra pounds 50m, Sky did enough to force Greg Dyke and other malingerers on the Manchester United board to carry out their fiduciary duty and recommend the offer. For choice, they would have been with the fans and for scuppered the deal in its entirely.

Still, it's just as well someone leaked the story over the weekend, since the chief executive, Martin Edwards, was all ready to sell at an undervalue of 217p a share. This is the very same Mr Edwards, it will be recalled, who less than ten years ago agreed to flog the club to the property developer Michael Knighton for a paltry pounds 10m. Clearly he's a man of sound judgement and vision.

The leak ensured that Mr Murdoch was forced to raise his offer, not just once, but twice, before the board finally caved in. By all accounts Professor Sir Roland Smith, the chairman, was in his element extolling the intangible value of such a unique brand, and its added value to Sky. Without doubt, he secured a fabulous price.

For Rupert Murdoch, however, this is merely round one in the fight. Now comes the much tougher pounding he'll take from the regulators. The bid poses a very real dilemma for New Labour. If Peter Mandelson, whose friendship with Elisabeth Murdoch is apparently not enough to declare him offside, nods it through, the charge of cronyism will become that much more intense. If he stops it, New Labour will lose Mr Murdoch's support for ever.

In such circumstances his only viable course of action is to play the whole thing off into the long grass by referring it to the Monopolies and Mergers Commission. Indeed the perfect political outcome from his perspective would be for John Bridgeman, Director General of Fair Trading, to recommend against reference, for Mr Mandelson to go against the advice and refer, thus placating the anti-Murdoch press, but for the MMC eventually to clear it. Unfortunately for him there are quite enough public interest issues raised by this bid for Mr Bridgeman to recommend reference off his own bat.

There may be no competition issues involved here, strictly speaking, but vertical integration of this type has been quite enough to prompt regulatory action before. Here's just one, minor example of its consequences. In possible breach of stock exchange rules and securities law, Sky leaked details of its new offer to first editions of the Times and the Sun before formally announcing the bid to the world, thus giving these titles a competitive edge on the news stands. It could reasonably be argued that this is just a harbinger of things to come. This is a story that's going to run and run.