Platform: Merger lobbyists must alter their target audience - As Stephen Byers seeks to reduce political interference in mergers, lobbyists will need to change their focus, says Chris Savage

Stephen Byers’ decision to block BSkyB’s takeover bid for Manchester United provides a valuable pointer to the principles that will guide mergers policy in the future, and to the role that public affairs can play in such decisions.

Stephen Byers’ decision to block BSkyB’s takeover bid for

Manchester United provides a valuable pointer to the principles that

will guide mergers policy in the future, and to the role that public

affairs can play in such decisions.



Those who have been arguing that there is no future for lobbying in

mergers will certainly have to rethink their views. But equally, the

decision points to the way lobbying will have to change: away from an

old-fashioned focus on Parliament and politicians towards a more

broad-based approach, relying on effective case presentation and

mobilising support from third parties.



The fact that Byers wants to reduce political interference in mergers

does not mean decisions will be taken on narrow grounds. His decision on

the United takeover - which was in line with the recommendation put to

him by the Competition Commission - showed a rounded view of the impact

on competition.



Those who were expecting the decision would be taken on a simple

calculation of market share were surprised by the outcome. But in fact

the competition assessment is rarely, if ever, straightforward. It must

weigh a number of factors: what is the relevant market, are there

barriers to new entrants, and how is the market evolving in a way that

might affect those barriers?



All of these issues leave scope for dialogue and debate, and therefore

for lobbying. Instead of talking of a public interest assessment, with

priority given to competition but other factors being taken into

account, we now have a competition assessment, involving an equally

broad range of factors.



The lobbying skills called for will be as rounded as the issues

themselves, involving economic, industrial and analytical experience. Of

particular importance will be the ability to work with third parties as

advocates on this complex of issues, as the United campaign showed.



The turning point in the campaign was the decision to refer the case to

the then-MMC, with the Department for Culture, Media and Sport (DCMS)

playing the pivotal role. As always, the then-DTI Secretary of State

Peter Mandelson took advice from other departments, formalised through

the inter-departmental Merger Panel.



DCMS has deep concerns about the concentration of control in

broadcasting, and about the interests of football, championed by

Secretary for Culture, Media and Sport Chris Smith and his Minister Tony

Banks respectively.



And the referral gave confidence to the campaigners to build an

effective coalition of prominent advocates and individual

supporters.



The key point for lobbyists is that the principal parties in a merger

inquiry, the bidder and the target, are not the only elements in the

outcome.



Their views certainly count, and much of the inquiry will be spent

scrutinising them. But however strong the case, there will always be a

’they would say that, wouldn’t they?’ feeling.



So the views of other parties, especially when they bear on issues

central to the inquiry, can take on added significance.



In the Manchester United case, the key issues were whether any

guarantees on broadcasting rights could be enforced, and whether the

merger would restrict choice and access for supporters.



On both, it was the weight of evidence from third parties that ensured

the commission, and ultimately the Secretary of State, had little choice

but to oppose the bid.



In other cases, the issues will differ. But a key feature of any

lobbying strategy in the policy framework now emerging will be the

ability to build coalitions and mobilise support.



Future effective lobbying will call for new skills, and will probably be

more challenging, but it is by no means dead.



Chris Savage is director of Competition and Regulation at Shandwick

public affairs.



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