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Murdoch BSKyB Takeover Gets Green Light

David Gilbert


Murdoch BSKyB Takeover Gets Green Light

In a decision that could change the television landscape completely, the British Culture Secretary Jeremy Hunt has given the go-ahead for the controversial £8.4 billion takeover of BSkyB by Rupert Murdoch’s News Corporation.

In a statement, Hunt said that the decision by News Corp to spin-off Sky News as an independent company would "address concerns about media plurality." The takeover has been vigorously challenged by a number of media outlets including the Guardian, the Telegraph, Associated Newspapers and Trinity Mirror, and in a joint statement, they said: “We shall be vigorously contesting this whitewash of a proposal during the consultation period, as well examining all legal options." Not surprisingly, News Corp has said it welcomed Hunt’s decision. BSky B posted profits of £520 million last January and surpassed 10 million subscribers in 2010.

The concerns about the takeover stemmed from the belief that one organisation having control of so many news outlets was inherently wrong. News Corp already owns the Sun, the News of the World, the Times and Sunday Times newspapers and is seeking to buy the 61 percent of BSkyB it doesn’t own. It also has many media interests outside of the UK including Fox broadcast and cable network and newspapers such as the Wall Street Journal and The Daily, its iPad-only newspaper. Hunt had the option to refer the takeover to the competition commission, but has decided not to do so despite Ofcom recommending this course of action. The European Commission has already ruled there is no reason to oppose the takeover on competition grounds.

The takeover bid began back in June of last year and in December, then-Business Secretary Vince Cable asked Ofcom to look at the potential impact on media plurality. Cable was then recorded saying he was “declaring war” on Murdoch and subsequently stripped of his position. While Hunt initially agreed with Ofcom about referring it to the Competition Commission, he allowed News Corp to make concessions, which they did in the shape of Sky News. Under the terms of News Corp's proposals, the board of Sky News would have a non-executive, independent chairman and a majority of non-executive, independent directors.

Culture Secretary Jeremy Hunt

BBC business editor Robert Peston said Hunt's decision heralded "huge changes to the landscape of the British media industry," adding that a combined News Corp and BSkyB would generate revenues that would “dwarf all rivals, even the BBC." Those opposing the takeover will have until March 21 to lodge any complaints.

Do you think this is going to change the television landscape in Britain and if so will that be for better or worse?

Source: BBC

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