Premier teams prepare to kick into digital TV

It has often been said that once a millionaire has more money than he can ever spend he gets himself three things: a new wife, a newspaper and a football team. This adage, without the bit about a new wife, looks like becoming a business strategy rather than just a stereotype of the millionaire's ego.

News Corporation and Tottenham Hotspur have convincingly killed last week's story that they are in talks that would see Rupert Murdoch become the first media baron to own an English football team since Robert Maxwell's involvement with Oxford United in the Eighties.

But developments at Manchester United this month show that television and football will increasingly become the same business. And it shows that it may be football that moves into into media, rather than the other way around.

Despite Murdoch's purchase of the Los Angeles Dodgers for pounds 200m, in March this year, his move into the Premier League is not inevitable.

"In the UK there is no local television market," says Matthew Horsman, who is a media analyst at the brokers Henderson Crosthwaite. "Owning the Dodgers allows you to exploit their local television deals. Here, you are dealing with a monopolistic organisation - the Football League."

Horsman believes that one of the barriers for Sky entering the football business itself is that it would irritate the rest of the teams in the league. They would not want to deal with Sky both as a buyer of football rights, and as one of the joint owners of those rights.

What would cause this to change is the outcome of a Restrictive Practices Court case in January, brought by the Office of Fair Trading against the Premier League.

The OFT wants the court to decide whether the Premiership teams' grouping of themselves together to sell their television rights in one deal amounts to a monopoly. The deal that is under scrutiny is the one between the Premiership, Sky and the BBC, and a decision is due by May.

"If the OFT wins the case, the television rights to games will revert back to clubs and will present us with a very interesting scenario," says Maurice Watkins, Manchester United's solicitor.

"As things stand, the case is being defended by the Premier League and the clubs who make it up." But Manchester United has put itself in a position to benefit whichever way the case plays out.

The Old Trafford giant launched its own digital channel earlier this month, in a joint venture with Granada and Sky. At present, it is little more than an electronic version of the official club magazines.

There is archive footage of old United games, and there will be player interviews, team news and, importantly, a home shopping service for merchandise. But this amounts to a peripheral business, leveraging extra value from fans' obsessional relationship with their teams.

Paul Ridley, the managing director of MUTV, argues that he is giving access to those who are unable to see Manchester United play. "The fan base for Manchester United is 4 million. But only 56,000 can get in to a game at Old Trafford."

Brian Barwick, head of sport at ITV, is watching developments with interest: "There is an inevitability about team channels and, because there is no bigger team in town than Manchester United, everyone will be watching the level of interest."

Only Manchester United, and perhaps Rangers in Scotland, have a big enough fan base to have a dedicated television channel to themselves. If the business takes off, there are likely to be joint channels offering split programming. Paul Ridley believes that the channels are needed because of the way football has changed: "Football is no longer just about kicking a ball. Football is show business and celebrity. It is David Beckham and Posh Spice."

But, as The Guardian sportswriter Jim White pointed out when debating with Ridley at the Edinburgh Television Festival, on 16 September MUTV will be showing Red Hot Update and Vintage Reds, while the football team will be playing in the Champions' League.

"The key to the whole thing is to show the football," said White, who also writes for a United fanzine. "It is about obtaining the rights to live matches."

Which is why Manchester United wins, even if it and the Premier League "lose" in the Restrictive Practices Court. If the deal with Sky and the BBC is torn up, it will free teams with their own channels to cut out the middleman and charge viewers for games themselves.

Tempting as this may seem to the big clubs, there remains a number of questions about how they would actually charge viewers, and the effect that this would have.

Subscription works at the moment, but only on the basis of fans being able to see an entire league, not just their team. As was pointed out in the Edinburgh debate, many of those tuning in to see Manchester United play are hoping to see them get beaten.

Pay-per-view has been proved to work, for some one-off boxing matches, but no one knows whether it is sustainable for an entire football league. The teams have to work out if they want to create electronic season ticket holders, or just use pay-per-view for special games.

When Sky proposed pay-per-view to the Premier League chairmen earlier this year, it was proposing to charge extra for games it does not currently show.

The creation of a European super-league would also provide a new television product that could be charged for on a pay-per-view basis.

What all these developments have in common is the move of football companies away from being sports' companies to being media owners. And once they are all media owners, there is far more chance that Rupert Murdoch will be joining them as a football club owner.