News Corp. vs plurality
Does News Corp’s planned take over of BSkyB signal the end of media plurality in the UK?
That is the key question arising from Rupert Murdoch’s media giant’s concessions last week to maintain the independence of Sky News in any deal to acquire the 60.9% it doesn’t already own in BSkyB. The concession was enough to convince culture secretary Jeremy Hunt that the deal wasn’t a danger to plurality, but only after Ofcom gave it the thumbs up.
A spokesman for the regulator told Telecoms Europe.net that News Corp’s pledge over Sky News addresses its “concerns over plurality of news provision,” which was a key factor in Hunt ruling the transaction will not face scrutiny from competition authorities.
Specifically, News Corp has pledged to spin Sky News off as a separate entity, but maintain its 39% stake in the news outfit and 37% voting rights by distributing shares in the new company to current BSkyB shareholders equal to their current stakes.
In return, BSkyB will carry Sky News for a decade and license the brand to the new company.
“Ofcom is pleased that News Corporation has agreed in the proposed undertakings to place editorial independence and integrity at the heart of ‘Newco’ and to underpin this with arrangements that secure full independent governance,” the staffer said.
However, leading media firms BT, Guardian Media Group, Northcliffe Media, Trinity Media Group, Associated Newspapers and Telegraph Media Group claim the pledges are “pure window dressing,” a spokesman said.
“It has been well documented by former Murdoch editors that arrangements of this kind, including those put in place to protect the independence of the Sunday Times and Times, have proved wholly ineffective,” the spokesman continued.
The alliance has pledged to vigorously contest the take over and is “examining all legal options,” the spokesman revealed.
So, are they right to be concerned?
In some ways, yes. News Corp. already controls 33% of the newspapers sold in the UK via its News International subsidiary, and the take over will add the UK’s largest broadcaster to its ranks.
Alliance members fear the acquisition will put News Corp. in a position where it could limit competition through “cross promotion, bundling, banning rival’s advertisements and distorting the advertising market with cross-platform deals,” despite the concession on Sky News.
In any event, with EU backing for the deal granted in December and the latest ruling from the UK government, the take over looks certain to proceed.
Providing, of course, News Corp. can agree on a purchase price.