NEWS CORPORATION’S decision to withdraw its guarantee of editorial independence for Sky News has offered the British culture secretary the excuse he needed not to give the nod to the corporation’s takeover of BSkyB.
Following the announcement Jeremy Hunt told MPs he would refer the bid to the competition commission – News Corp had battled for months to avoid a six-month inquiry by the commission. In January Mr Hunt had accepted assurances that Sky News would be created as a stand-alone before saying he was “minded” to approve the takeover. The News Corp withdrawal came just minutes before Mr Hunt faced an angry House of Commons.
It is clear that prime minister David Cameron hopes that the company will abandon the bid altogether. “All I would say is this,” said Mr Cameron, “if I was running that company right now with all the problems and the difficulties and the mess, frankly, that there is, I think they should be focused on clearing those up rather than on the next corporate move.”
The competition commission’s final verdict on the takeover – which has already been cleared by the European Commission – will take a minimum of six months, but could be delayed by a further two months if necessary. News Corp hopes that the commission’s investigations may put off a separate inquiry by TV regulator Ofcom into whether News Corp and its top executives are “fit and proper” to hold a UK broadcasting licence.
In a statement News Corp hinted that it would challenge any decision made on grounds other that media plurality, saying “the only relevant legal test” is whether its complete takeover would damage the choice of news sources available to the public.
The culture secretary’s move came after Labour leader Ed Miliband made clear he would seek a House of Commons vote tomorrow demanding a delay in the takeover until criminal investigations were completed.
MPs and the public, Mr Hunt said, “feel very concerned at the prospect of the organisation, which allegedly allowed these terrible things to happen, being allowed to take control of what would become Britain’s biggest media company”.
Last night, there were signals, unconfirmed, that Mr Murdoch is considering selling News International – which runs the London Times, Sunday Times, Sunand, up to last weekend, the News of the World– in a bid to stem the damage to News Corp.
Currently, News Corp owns 39.1 per cent of BSkyB. Mr Murdoch had offered £7 a share to buy the remainder, but investors were demanding up to £11. Yesterday BSkyB’s share price fell below £7 for the first time since the takeover bid began.
The satellite broadcaster is a prime target since the markets agree it is about to become a lucrative "cash cow", having already made much of the capital investment necessary for the next few years. Mr Murdoch has been committed to his newspapers even though, for instance, the Timeslost £90 million last year and his investors prefer more investment in TV and the web.