Vince orders Ofcom investigation of News Corp’s bid for BSkyB

The last few months has seen a curious coalition emerge, uniting media foes of right and left and non-aligned, ranging from the Daily Mail to the Guardian, Trinity Mirror to the Telegraph, the BBC and Channel 4. What has brought them together? Opposition to the bid by News Corporation, controlled by Rupert Murdoch, for full control of BSkyB (the company currently owns a minority 38% stake).

Well, today Vince Cable offered them some cheer — he has referred News Corp’s bid to the media regulator, Ofcom. The BBC reports:

The Business Secretary, Vince Cable, has ordered Ofcom to investigate News Corporation’s plan to take full control of broadcaster BSkyB. News Corporation has said it wants to buy the 61% of BSkyB it does not own.

The inquiry will look into “media plurality” – the degree to which news outlets are concentrated under one organisation’s ownership. Rupert Murdoch’s News Corp owns News International, which owns the Sun, News of the World, Times and Sunday Times. These account for a third of the UK’s national newspaper circulation. A News Corporation statement said it believed its plan would be cleared. …

Ofcom has to report back to the Business Secretary by 31 December. Mr Cable must then decide whether to make a referral to the Competition Commission.

This has been an interesting test for the Coalition. Lib Dems have long been hostile to the Murdoch empire’s saturation of the national media, with News Corp owning 38% of the newspaper market. As former Sun editor David Yelland warned his former boss during the general election, if the Lib Dems held the balance of power:

it would be the first time in decades that Murdoch was locked out of British politics. In so many ways, a vote for the Lib Dems is a vote against Murdoch and the media elite.

And so, perhaps, it will prove.

But though this will be marked up on the credit side of what the Lib Dems have got out of the Coalition — its hard to imagine a Tory government standing in Mr Murdoch’s way — the Tories are by no means unified. Though David Cameron will have no wish to rub Mr Murdoch up the wrong way, nor will he wish to antagonise the arguably more influential Mail and Telegraph groups either. This may be one decision he’s quite happy to see a Lib Dem having responsibility for.

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  • I think Vince has betrayed the party and his voters by breaking his pledge and supporting a huge rise in tuition fees, but credit where credit is due, he has not given in to the Conservatives and he has taken the right decision on the bid for BSkyB. Well done, Vince.

    On a completely unrelated note, isn’t it a little odd that ads for No2AV are running on Liberal Democrat Voice?

  • According to those close to this matter, referring NewsCorp’s bid to Ofcom is not sufficient. Our laws and precedents are on NewsCorp’s side. Only a Royal Commission with a view to changing our laws on media ownership will stop Murdoch or his successors.

    There was a piece in the Independent on Tuesday which describes the procedures. However, it appears Murdoch has the complexities factored into to his bid and is confident. Note the comment from brokers Numis:

    Paul Richards, an analyst at Numis, said: “I’m sure it will go through, although it’s safest to assume everyone who can look at it, will look at it. The deal should still be done by June.” The Independent.

  • Ian Sanderson (RM3) 5th Nov '10 - 8:18am

    Perhaps it is time to put into law that those with a major stake in our most influential UK media have a local stake and pay local taxes – much as for peers. This is the sort of law that Rupert Murdoch came up against in the USA and responding by exchanging Australian citizenship for US citizenship.
    We would probably have to specify EU citizenship and taxes but that would be much better than Lichtenstein or the Cayman Islands, or other tax havens with much weaker company regulation than major developed world countries.

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