Football: United primed to sell their heritage

Chief executive Edwards is set to make a killing in sale of the century - but at what cost to the game?

AS TIME goes by Keith Burkinshaw's words as he left Tottenham Hotspur in 1984 become more relevant almost daily. "There used to be a football club over there," he said nodding in the direction of White Hart Lane, and as he delivered his parting shot he could have been bidding goodbye to the umbilical chord between the man in the street and the team he supports.

There used to be a football club at Old Trafford, too, but now there is a monolithic business concern called Manchester United plc and BSkyB's intention to make a bid of a reported pounds 575m for it leaves no doubt the last three letters are becoming increasingly dominant. The People's Game? Not any more.

If the reports are true, one person will be rubbing his hands more than anyone. Nine years ago Martin Edwards, the club's chief executive, agreed to sell his 50.2 per cent share in the club to Michael Knighton for pounds 10m. At 225 pence per share, his diluted 14 per cent stake would be worth pounds 80m and there are suggestions he has already accepted the offer from Rupert Murdoch's satellite television company.

"It could be we'll for ever more be known as Sky United," Andy Walsh of the Independent Manchester United Supporters' Association, said yesterday. "Our fear would be that Rupert Murdoch will exploit the Manchester United name for his own ends.

"It again shows the crying need for regulation in football because the fat cats of the City are more interested in coming in and stripping clubs of their assets rather than developing the game itself."

Knighton, whose fortune was made initially by buying and selling property, would meet the definition of a "fat cat", but it was he who first guessed at the true value of the club, and indeed football in this country. Sir Matt Busby made Manchester United but Knighton, now the owner of Carlisle United, understood the commercial worth of the name.

"When Martin mentioned the figure he wanted I didn't quibble," Knighton explained later. "I agreed straight away, there was no haggling. It was a snip. I couldn't believe I was getting control of United for pounds 10m. There were people I knew who would have paid twice that."

It was only when doubts about Knighton's consortium surfaced and the deal collapsed - albeit at the cost of his being accepted on to the club's board - that it became apparent the price Edwards had accepted had been a serious undervaluation. It was partly to prevent a repetition that United were floated two years later for pounds 47m.

The story since then has been one of commercial success far outstripping even the triumphs of Alex Ferguson's football teams who have won four championships and two Doubles in the last six seasons. At a time when most clubs run at a loss even with huge amounts of television money, United's profits have rocketed from pounds 4.2m in 1993 to pounds 26.2m in 1997.

Branding has come in with a vengeance so that it is now possible to drink United soft-drinks, while dressed in club merchandise before retiring to sleep under a Ryan Giggs duvet. All can be bought, of course, with the ManU credit card.

It is not popular with supporters, who have experienced growing distaste about where the club is heading but no-one could criticise the club's commercial prowess. Last year the annual revenue rose to pounds 87.9m which is nearly as much as two giants of European football, Italian clubs Juventus and Internazionale (pounds 90m), make combined.

BSkyB's offer, which is considerably higher than the 159p price at the close of the Stock Exchange on Friday and means investors will have increased their initial investment 16-fold in seven years, amounts to more than just buying the biggest football club in Europe, however. It guarantees the company's involvement in the sport that has been fundamental to its own profitability.

In 1992, when BSkyB first signed a deal with the Premier League, there were around two million households subscribed to satellite, a figure that has since grown to seven million. Not all of that expansion can be attributed to football but no one would dispute it has been of paramount importance.

BSkyB paid pounds 647m to renew their rights to screen the Premiership but such is the competition that when the current contract runs out in 2001 the price is likely to be in excess of pounds 1 billion. That is if the league can be sold as an entity because clubs have shown increasing interest in going it alone with pay-per-view.

Murdoch made an offer in the summer to introduce pay-per-view this season and it was the Premiership's refusal to reach agreement with the satellite television company that almost certainly prompted his move now. It may or may not be a coincidence that United's own television service, MUTV, which comes on air this Thursday, is headed by a former sports editor of The Sun, Paul Ridley.

By buying United, BSkyB would be taking out an insurance policy, not only against clubs going it alone but also against the prospect of a European super league which could make their own coverage of domestic football of secondary importance.

No super league could take off without English television audiences and no English clubs would be foolhardy enough to join if the biggest draw, United, remained within the Football Association fold.

Murdoch already owns a portfolio of sporting interests including the Los Angeles Dodgers baseball team and the Los Angeles Lakers and the New York Knicks basketball teams, but United could be the most important for his business interests. The club's support extends far beyond Britain and is particularly healthy in the Far East which is an area covered by Murdoch's Star satellite service.

The most vocal opposition to the deal will come from United's supporters but more influential will be other Premiership clubs and television companies who will almost certainly complain to the Office of Fair Trading about the deal.

"There are implications here that mean it can't be regarded just as one publicly quoted company being taken over by another," Tony Banks, the Sports Minister, said yesterday. "It can't sail through because there are repercussions for sport in general."

You suspect the damage has been done already. If BSkyB are thwarted there are other companies without a possible conflict of interest who would probably succeed. How much longer before ICI Middlesbrough face Amstrad Hotspur?