Cable steps in to order NewsCorp/ BSkyB probe

Business Secretary Vince Cable bows to pressure and orders Ofcom to investigate NewsCorp's BSkyB takeover. Could save face all round...

by James Taylor
Last Updated: 19 Aug 2013
The storm of protest over NewsCorp's bid to take full control of BSkyB has become a real awkwardness for the Government: since Rupert Murdoch's media empire has been so vocal in its support for the Coalition, they'd be wide open to accusations of partiality (not unreasonably) if they just waved the deal through. So we're not really surprised to see this morning that Business Secretary Vince Cable has ordered Ofcom to scrutinise the deal, if only as a back-covering measure. But although this will be a blow to NewsCorp - since these regulatory probes will inevitably slow things up hugely - we'd still be very surprised if the deal ends up being blocked...

NewsCorp's plan to take control of the 61% of BSkyB it doesn't already own has gone down very badly with other media groups; there's been much wailing and gnashing of teeth about the pernicious effects on competition - both in newspapers and TV - if Murdoch ends up controlling an even bigger slice of the UK media pie. The fact that the BBC, Channel 4, Guardian Media Group, plus the owners of the Mail and the Telegraph managed to put aside their usual squabbles to complain in unison to Cable shows just how strongly they feel about it. The theory is that without its independent shareholders, BSkyB won't have the same editorial freedom.

NewsCorp insists this won't make any practical difference to the way Sky operates - not least because the UK's strict impartiality rules will prevent Sky ever becoming a Fox News-esque home for rabid foam-flecked right-wing nutjobs. And the Murdochs presumably hoped that Number Ten would wave the deal through, as a quid pro quo for all that nice coverage. But that would have caused a political fire-storm. In today's Guardian, Labour MP Ivan Lewis insists that 'media pluralism goes to the very heart of Britain's democracy', and that this move could undermine diversity and editorial freedom. The Murdoch empire, he says 'has sometimes crossed reasonable boundaries with overzealous business practices and the assertion of political power.'

Now there may be a degree of opportunism about this 'public interest, not vested interest' stuff. But it's hard to argue that a proper independent probe isn't in the best interests of consumers. The trouble for NewsCorp is that this process will inevitably take ages - particularly if Cable decides to refer the matter to the Competiton Commission afterwards (which will depend to some extent on what Ofcom says). So it will slow the deal timetable right down. We imagine the Murdochs - not known for their love of the regulatory authorities - will have steam coming out of their ears even as we speak.

That said, it's a bit hard to see the deal being stymied altogether. For a start, there doesn't seem to be much appetite in Number Ten to clip the wings of their powerful new chum. And for another, given how close the links between NewsCorp and Sky are already (James Murdoch having run it for years) and given how strict the UK rules are, we imagine they'll be able to make a fairly compelling case that this move won't make much difference. Still, if they do get a thumbs-up from Ofcom, it should save a bit of face for all concerned...

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