Media mogul Rupert Murdoch has been given the go ahead to take over BSkyB by the UK government.
However, there has been an outcry of protests from British MPs who are outraged his News Corp, who already has a stranglehold of British media interests, will now control one of the biggest broadcasters in the country.
British culture secretary, Jeremy Hunt MP, who announced the decision yesterday, said the deal included safeguards ensuring editorial independence, which would limit the monopoly type effect many fear the buyout will bring, with Murdoch undertaking to establish Sky as an independent entity.
The decision to allows News Corp who already owns 39.1 per cent, purchase the remaining 60.9 per cent stake in the satallite broadcaster, will be followed by a period of consultation.
“I am consulting on proposed undertakings from News Corporation. Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corporation/BSkyB merger go ahead,” said Hunt.
Communications watchdog Ofcom pointed to the problems with media
plurality a buyout would bring, in a report published last year.
However, the body gave their seal of approval to the deal following the
undertaking by News.
“The process has been completely fair, completely impartial and completely above board,” he insisted.
The deal, said to be worth $14bn is the largest in News Corp history, and will also require approval from BSkyB shareholders who are seeking a higher bid than the GBP 700 pence per share offer currently on the table.
Opposition MPs, who are vociferous opponents to the takeover plan and
their contempt for Australian born Murdoch, have called on Hunt to refer
the case to the Competition Authority because “nobody believes these undertakings agreed to by Murdoch will be adhered to in the long term”.
The decision marked a “disastrous day for democracy,” declared another fellow Labour MP.
A fully owned News Corp owned BSkyB, (the giant currently owns 39.1 per cent) will be renamed Newsco and governed by an impartial board of directors, chairman and editorial committee who have no vested interests in the media powerhouse .
News Corp, who already owns The Times, The Sun, and the Wall Street Journal as well as holding various interests in Australian print and broadcast media including a 25 per cent stake in pay TV broadcaster Foxtel, means the decision may have implications here also.
BSkyB is also shareholder with the Seven Network and Nine Entertainment Company in Sky News Australia, one of Foxtel’s anchor stations. News Corp has pledged to forfeit ownership of its flagship news channel as part of the takeover deal.
This week it also emerged Foxtel is in talks with regional pay TV player Austar, in what is rumoured to be a $2bn deal.
And this decision from the UK has not been without controversy.
Last year UK Business Secretary, Vince Cable, who rejected the idea of a News Corp takeover of Sky, after declaring “war”on the Murdoch empire, was quickly ejected from responsibility for the decision by Prime Minister David Cameron, with the Culture Secretary given the job.
British media are also furious at the decision by the Conservative MP,
with a media alliance made up of other major players there including BT,
Guardian Media Group, Associated Newspapers, Trinity Mirror,
Northcliffe Media declaring:
“We deeply regret the fact that the Secretary of State is minded to
clear the deal. The proposed undertaking is pure window-dressing … We
shall be vigorously contesting this whitewash of a proposal during the
consultation period, as well examining all legal options.”
Hunt was said to be a supporter of News Corp takeover as is his ruling Conservative party.