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
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
And the referral gave confidence to the campaigners to build an
effective coalition of prominent advocates and individual
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
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