British media join forces against Murdoch takeover of BSkyB
Monday 11 October 2010
Letter to Vince Cable signed by many of UK's leading news providers warns £8bn deal would damage democratic debate.
Image above: Rupert Murdoch's News Corporation is proposing a full takeover of satellite broadcaster BSkyB. Photograph: Hyungwon Kang/Reuters
Fleet Street's highly factionalised newspaper industry today set aside historic differences to join forces in an unprecedented assault against the power of Rupert Murdoch's media empire.
The companies behind the Daily Telegraph and the Daily Mail – both supporters of the Conservatives – united with the owners of the Guardian and the Labour-backing Daily Mirror to petition Vince Cable, the business secretary, to consider blocking News Corporation's proposed £8bn full takeover of the satellite broadcaster BSkyB, which trades under the name Sky .
Fearful of the combined might of an integrated News Corp-Sky operation, which would include the Sun, the News of the World, the Times and book publisher HarperCollins, the complainants said the "proposed takeover could have serious and far-reaching consequences for media plurality".
The letter, signed by Murdoch MacLennan, chief executive of Telegraph Media Group, Sly Bailey, chief executive of Trinity Mirror, owner of the Daily Mirror, and Andrew Miller, chief executive of Guardian Media Group, was sent to Cable today. The signatories argue against a combined Murdoch multimedia empire that would have a turnover of £7.5bn compared with the BBC's £4.8bn.
They are joined by Mark Thompson, director general of the BBC; Ian Livingston, chief executive of BT; and David Abraham, chief executive of Channel 4. Thompson was the first to publicly call for Cable to review the deal "given the scale of the potential ownership in UK media", in an interview last week with Charlie Rose on the PBS channel in the US.
The document is also backed by a memo prepared by the City law firm Slaughter & May, which sets out legal arguments for the minister to intervene. It presents a political headache for David Cameron's coalition government. His Conservative party came to power with the help of an enthusiastic pre-election endorsement from the Sun – Britain's bestselling newspaper – and other Murdoch titles, but Cable's Liberal Democrats enjoyed no such support.
Cameron also employs the former News of the World editor Andy Coulson as his director of communications. Coulson, whose editorship of the Sunday tabloid remains mired in controversy about phone hacking, is close to key figures in News Corporation's newspapers, led by News International's chief executive and former Sun editor Rebekah Brooks.
The submission is made all the harder to dismiss with organisers including Lord Black, the well-connected former Tory party director of communications, who now works at the company behind the Daily Telegraph; and Paul Dacre, veteran editor-in-chief of the Daily Mail, whose newspaper is regarded as the authentic voice of middle England. Over the past week both the Telegraph and the Mail have been critical of the government's plans to cut child benefit for higher-rate taxpayers, indicating strained relations between the two right-of-centre newspapers and Cameron's government.
Although Murdoch is closely identified with Sky, chaired by his son James, he does not own all of the fast-growing satellite broadcaster. In June News Corporation proposed an £8bn, 700p-a-share buyout out of the 61% of the company it does not own.
The deal must first be approved by regulators. News Corporation is expected to file for regulatory approval with the European commission on competition grounds, but Cable would then have 25 days to choose to order an inquiry into the transaction on public interest grounds, as defined by "media plurality" being compromised.
The business secretary is expected to make his ruling within 10 days of the European commission being notified, and his decision will have to be rubber-stamped by Cameron. The media plurality test – which would be carried out first by the communications regulator Ofcom and then by ministers – is a loosely-defined concept by which Cable would have to be convinced that rival newspapers and broadcasters were at risk of closure or cuts that would damage democratic debate.
What a merger might mean
Matthew Parris and Trevor Kavanagh – columnists for the Times and the Sun – may be regular guests on Sky News, but critics of the proposed News Corporation takeover of BSkyB believe the potential for integration would be far deeper in the event of a full tie-up.
Today, Sky News has an independent editorial structure with channel editors reporting through the satellite broadcaster and its board – and despite the close links between Sky and News Corporation, any sharing of content and journalists has been very limited.
Under a merged company Sky News could be brought more closely into line with the company's UK newspapers. Although the titles are run independently, Rupert Murdoch takes a close interest in each, ringing editors regularly if not daily, and each has a similar political tone – which saw all four back David Cameron before the election.
News Corporation argues that its planned takeover of Sky is "essentially financial" and that it is not driven by cost savings or new business ideas, but Murdoch has taken a keen interest in developing new digital products for the iPad.
In August News Corporation announced plans to develop an integrated digital product, with content from across its US portfolio – including Fox News, the Wall Street Journal and the New York Post. It is hard to believe that a similar idea is not under active consideration in the UK, where for a monthly fee iPad owners will get a new multimedia service – a fusion of print and video beyond the immediate means of most newspapers.
(Source: The Guardian )
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