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Murdoch meets Man Utd Wednesday, 9 September, 1998, 16:20 GMT 17:20 UK
Is Mandelson a match for Murdoch?
Peter Mandelson in garden
Mandelson - the man Murchoch should fear
BSkyB 623m takeover bid for Manchester United is far from being a foregone conclusion.

Quite apart from the fury the deal has invoked from the club's fans, the takeover faces an investigation by the Office of Fair Trading (OFT), the UK's competition watchdog.

The OFT, an independent government department, has to determine whether or not the deal is in the public interest or breaches any competition laws.

But it is Peter Mandelson, Secretary of State for Trade and Industry, from whom Mr Murdoch has most to fear.

Mr Mandelson will have the final say as to whether the takeover should go ahead, or whether it should be referred to the Monopolies and Mergers Commission (MMC).

Even then, he is not duty-bound to agree with the MMC's recommendations.

Competition concerns

Mr Mandelson's initial decision will rest on the the OFT investigation.
office of fair trading
The OFT will look at the deal carefully

The OFT, run by director general John Bridgeman, is a non-ministerial, independent government department which is divided into competition policy and consumer affairs.

Now 25 years old, it plays a major role in protecting the economic welfare of consumers and in enforcing UK competition policy.

It encourages competition and investigates anti-competitive practices in industry, while remedying trading practices which are against consumer interests.

Internationally, the competition policy division is responsible for relations with the European Commission on competition matters.This only happens when the merger has cross-border implications.

Mr Murdoch's deal will be automatically reviewed by the OFT because the acquisition of Manchester United is worth far more than the review body's 70m threshold.

The OFT says it will begin investigating the information sent by all the parties involved by the end of the week.

It is expected to take up to 30 days, after which the Mr Bridgeman makes a final assessment which is sent to Mr Mandelson.

The next stage

If Mr Mandelson believes that the deal acts against the public interest he will automatically pass the report to the Monopolies and Mergers Commission (MMC), which will instigate a wide investigation.

The MMC was established by statute in 1948 to investigate and report on matters referred to it relating to mergers, monopolies and anti-competitive practices, the regulation of utitilies and the performance of public sector bodies.

But it has no power to initiate inquiries or choose which inquiries it undertakes.

Tough decision

Mr Mandelson and the competition authorities face a tough decision.

If BSkyB gains control of the UK's largest football club as well as already owning exclusive rights to broadcast Premiership games, there will be concerns he will have a stanglehold over the British game.

On the other hand BSkyB will own just one of the Premier League's major clubs.

Mark Booth, chief executive of BSkyB, said he could see no reason why the deal should not go through.

He said: "The OFT has based its past recommendations on a proper, factual basis, and I don't believe this deal will be a problem."

Mandelson's dilemma

But for Mr Mandelson the takeover presents a dilemma.

If he allows the deal to go ahead it will cause an uproar from fans and send shockwaves reverberating around the football world.

On the other hand if he blocks the deal, Mr Mandelson risks invoking the wrath of one of the most powerful media barons in the world.

Mr Murdoch has already proved he can be a dangerous enemy.

BBC News
Former Senior OFT official Geoff Horton: 'It's not a huge part of the market'
BBC News
Football Analyst Nigel Hawkins says there are still hurdles to get over
See also:

09 Apr 99 | murdochs big match
17 Mar 99 | murdochs big match
09 Sep 98 | Murdoch meets Man Utd
09 Sep 98 | Business
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