THE BRITISH government will make no decision on whether to investigate News International magnate Rupert Murdoch’s bid to control all of BSkyB, the company that operates Sky Television, until News International formally registers its intention to buy with the European Commission.
The effort by News Corporation to buy out the 61 per cent of the satellite broadcaster that it does not own for £7 (€7.97) a share has incurred the wrath of major British media organisations, including the Daily Telegraph, Daily Mail, Guardian and Mirror, with the heads of the BBC and Channel 4.
In a letter to the secretary of state for business, Vince Cable, the group complained that outright ownership of Sky by News Corporation – which owns the Sun, News of the World, Timesand Sunday Timesnewspapers in the UK – would reduce media diversity.
Under the UK’s Enterprise Act, Mr Cable can refer the bid to the media regulator, Ofcom, if he believes that a takeover would damage plurality, though yesterday Mr Cable’s office was giving little away: “We are not going to say anything until it has been registered with the European Commission,” said a spokeswoman.
BSkyB is the biggest broadcaster in the UK, with revenues of £5.9 billion in the 12 months to June, compared with the BBC’s global revenues of £4.8 billion.
BSkyB recently outbid the BBC for the new series of the popular US drama Mad Men, offering three times the sum put forward by the BBC.
The decision of most of Mr Murdoch’s UK competitors – bar ITV and satellite TV provider Virgin – to sign the letter is an unprecedented act of co-operation and sharply illustrates the fears held by them that Mr Murdoch could develop synergies between BSkyB and his existing stable that would hurt their revenues.
News Corporation has recently begun to put most of its UK newspaper internet sites behind pay-walls, though industry experts have warned that the Timesand Sunday Timeshave suffered drastic falls in online readership since they started to charge. However, Mr Murdoch is intent on pressing ahead with the strategy.
BSkyB’s profits, backed by massive investment in sports TV rights, are predicted to rise to £1.4 billion by 2015, according to investment bank Nomura, which predicts that Sky’s turnover by then will be £7.8 billion, £2 billion more than today, while its £1 billion marketing budget could be used to cross-promote News International’s existing newspaper titles.
