News Corp’s bid for Sky risks media plurality

A guest post by Sean Eames

Two weeks ago, Vince Cable utilised powers available to him under the 2002 Enterprise Act, to refer News Corp’s offer to purchase the remaining 61% of BskyB, to Ofcom, who now have until the 31st December to report to the Government whether the acquisition would be ‘in the public interest’. The European Commission meanwhile will declare whether the bid complies with EU competition laws by the 8th December. This episode again raises important questions concerning the ownership of media sources and how the plurality of media can be protected.

In October 2009, Labour MEPs, supported a joint motion for a resolution denouncing the lack of press freedom in Italy and calling for EU proposals to greater protect/enhance media pluralism in member states. The resolution was defeated by three votes. The debate was in light of the conflict between Mr Murdoch and Silvio Berlusconi concerning the Italian Prime Minister’s immense and prejudicial media influence in Italy. This current affair now sees Mr Murdoch attempting to increase his already substantial media influence in the UK, which could potentially see the Murdoch family enjoy media influence here, similar to that of Berlusconi in Italy. 

If the deal is approved by Ofcom, News Corp will then have direct access to BskyB funds/revenues. (Currently News Corp only receives funds from BskyB in the form of dividends). Last year, BskyB’s UK revenues totalled nearly £6 billion, compared to BBC’s global revenues of £4.8 billion. By 2016, BskyB’s income is projected to be 220% that of the BBC’s. BskyB currently enjoys a 35% share of the UK TV audience. News Corp, through The Times, Sunday Times, The Sun and News of the World, already has a 37% share of the UK newspaper market. News Corp would be able to pool commentators/journalists and resources across its newspapers and Sky, if the deal goes through. Ofcom, formed as a result of the 2003 Communications Act, brought in by Labour,- which states that the regulator should, prevent unacceptable media dominance that affects plurality and/or diversity’, must therefore now decide whether News Corp’s offer is in accordance with the Act.

Under EU laws, news channels must be regulated by a European based regulator. In the UK, that regulator is Ofcom. Thanks to the powers granted to Ofcom by the Labour government, impartiality in our news channels is assured. However, although a regulator must in be in place under EU laws, Governments are free to legislate how much power/influence a regulator may have. The Tories have already set about stripping Ofcom of its decision making powers, as Cameron promised last year to the delight of Mr Murdoch, who just so happened to be the first major figure to visit Number 10 in May!

If the Government decides to reform Ofcom, removing the requirement for newsroom impartiality, there is the strong possibility that Sky News could well become our version of Fox News, allowing the likes of Jeff Randall to become our equivalent of Bill O’Reilly (the horror!). Given that Richard Desmond, owner of The Express and Daily Star was allowed to purchase Channel Five earlier this year, as his share of the media market was still considered to be ‘relatively small’, if News Corp’s bid for BskyB is successful, we would have two immensely powerful media operators in Mr Murdoch and Mr Desmond, owning a extensive share of the media market in the UK.

The influence of Berlusconi however, must serve as a warning the affects undue media influence and the concentration of media ownership can have. In an open democracy, it is vital to ensure that concentration of media ownership and influence, does not reside with a small number of individuals, explicitly broadcasting certain political viewpoints in a highly (un)fair and distinctly (un)balanced nature.

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