News Corp offers Sky News deal to avoid BSkyB review
News Corp has told the government that it might be prepared to sell Sky News to in a bid to gain full control of BSkyB.
One option to avoid a lengthy review of News Corporation’s planned takeover of the pay-TV group is to separate the satellite news channel from BSkyB, according to a report in the Financial Times.
Rupert Murdoch’s controversial proposal to buy the 61% stake in BSkyB that it does not already own is now in the hands of culture secretary Jeremy Hunt, after Vince Cable “declared war” on Murdoch.
Ofcom has already recommended a Competition Commission review on the grounds that the buyout could reduce the diversity of news provision in the UK below an acceptable level.
However, a review could take between six to eight months, and even then, will go back to Hunt for a final decision. Murdoch’s group hopes to be able to avoid this process, as it could result in a significantly increased price for shares of BSkyB (by hundreds of millions of pounds).
Newsline’s Raymond Snoddy says “Hunt has absolutely no option but to refer the issue for full investigation by the Competition Commission. If there ever was any doubt about the matter there can be none now because of pirated prejudices of business secretary Vince Cable.
“Due process across a decent stretch of time is also the only way of putting matters right given the number of meetings Hunt has had with News Corp luminaries without civil service chaperones and the kind things he has said about the achievements of BSkyB.
“In retrospect it was a trifle unfortunate that the culture secretary had said publicly he did not object to such a takeover.
“This all happened before the unexploded hand grenade suddenly arrived in his in-tray and before circumstances forced him to become quasi-judicial.
“Apart from political perceptions there are many strong reasons why there should be a full investigation. They include the sheer scale of the £8 billion to £9 billion deal and the fact that communications regulator Ofcom believes it should be so.”
Hunt, who is busy promoting local TV, declined to comment on the prospect of a Sky News spin off.
Sky News is currently losing between £30 to £40 million a year, so “it is hard to see who else would subsidise it”, the FT says. However, reports already suggest a potential buyer for the channel – ITN (a merger between the two news providers has previously been discussed), while others say CNN, CNBC and Bloomberg could be in the picture.
If Hunt was to consider a deal to seperate Sky News from BSkyB, he would be under pressure open it up to public consultation. Speaking recently, he said he is resigned to a judicial challenge whether he allows the BSkyB takeover or not.
“This is a decision that is likely to be judicially challenged by the side that is disappointed,” he said. “This is a very, very hot potato and I’m aware of what happens if you hold a hot potato in your hand for too long.”
Today’s news comes as the Guardian revealed that David Cameron was a guest at Rebekah Brooks’ home (the chief executive of News International) over Christmas – just days after he transferred ministerial responsibility from Cable to Hunt.
Shadow culture secretary Ivan Lewis last night described Cameron’s decision to meet Brooks as “extraordinary”. “People will question his judgment at a time when ministers are making a quasi-judicial decision about News Corp’s bid for BSkyB,” Lewis said. “The prime minister may be in breach of his own ministerial code, which requires openness and transparency.