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More on UK culture secretary decision about Murdoch BSkyB takeover

More on UK culture secretary decision about Murdoch BSkyB takeover

As reported yesterday, Jeremy Hunt, the UK culture secretary, has given the green light for Murdoch's News Corporation to prepare an £8bn bid for the 61% of BskyB it does not already own, setting up a showdown with investors in the satellite broadcaster who are determined to seek a deal worth at least £1bn more.

In fact, Rupert Murdoch may have to pay even more to complete the controversial acquisition, after Hunt said he would grant regulatory approval as long as Murdoch agreed to spin off Sky News into a new company, 39% of which remains controlled by News Corporation, the Guardian reported.

The paper reported Hunt has opened a 15-day consultation on the proposal, which closes on 21 March, after which he will make a final decision, opening the prospect of a potential offer from News Corp as soon as April.

The bid has a controversial history, as it has raised concerns about media concentration and plurality in the UK. European Commission approved the bid in December and then it was to left to the UK communications regulator Ofcom offer the final verdict, reporting to the business secretary Vince Cable. Ofcom recommendations would not have been binding for Cable, who had the power to veto. After the EU approval in December Cable was secretly recorded saying: "I have declared war on Mr Murdoch and I think we are going to win" and the decision was transfer to Jeremy Hunt, who has given his approval to allow the takeover.

Earlier, Hunt, on the advice of Ofcom, said that that News Corp wanted to limit Sky News to a board made up of a majority of independent directors was not enough and an independent non-Murdoch chairman was necessary, as the Guardian reported.

Several actors have raised concerns after Hunt's green light. The National Union of Journalists is to protest against it, describing News Corp's proposal that Sky News be spun off under an independent company as a "whitewash" and criticizing Hunt, as Journalism.co.uk reported, quoting NUJ general secretary Jeremy Dear who said: "this decision is bad news for democracy and media plurality. The reverberations will be felt across the entire media and political landscape. Previous undertakings given by Rupert Murdoch have proved toothless and illusory. Today's whitewash will prove no different".

A media alliance opposing News Corp, which includes Associated Newspapers, Trinity Mirror and the Telegraph and the publishers of the Daily Mail and the Guardian, feel the same.

BBC News reported that the shadow culture secretary Ivan Lewis said Labour had serious concerns about the decision-making process, questioning why the minister had decided not to refer the takeover to a full Competition Commission inquiry.

Mr Hunt told the BBC he was "very, very conscious that people are suspicious of politicians' motives", which is why he sought advice from Ofcom and the OFT when making his decision."Ofcom assured me that News Corp's undertaking addressed its concerns about media plurality", he said.

Under the terms of News Corp's proposal, aside from the independent directors board, shares in Sky News be distributed among existing shareholders, with Mr Murdoch's company to maintain its 39% holding. News Corp would not be allowed to increase its shareholding without the permission of the culture secretary for 10 years, the BBC noted.

Torin Douglas, BBC News Media Correspondent, analysed the aftermaths of the deal.

Media ownership has always been an area of political controversy. The idea of one man or company controlling a large share of the nation's newspaper and broadcasting interests is an issue of public concern, he wrote. According to some observers, he said, there will be not so much difference with now, as News Corp already owns four UK newspapers - the Sun, The Times, the Sunday Times and the News of the World - and 39% of BSkyB, which regulators regard as a "controlling" interest.

For more than twenty years, BSkyB has been chaired by Rupert or James Murdoch - yet Sky News is widely regarded as independent and impartial.So if the deal goes ahead, viewers shouldn't notice any change - at least to start with.

But - Douglas argued - would News Corp continue to invest as heavily in BSkyB as the current management and independent directors have done? After years of investment in sport and movies, Sky is spending more on original British content - in drama, comedy and Sky Arts - as well as new technology ventures such as 3D. If News Corp takes full control of BSkyB, might it decide that the UK market no longer needs the same investment - and it could spend its money more profitably in other countries?

Sources: Guardian, Journalism.co.uk, BBC News (1), (2)



Federica Cherubini


2011-03-04 14:14

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