Archive for the ‘BSkyB’ tag
This post was first published on Left Foot Forward on March 4th 2011
The stable door had been open for a good while before News Corporation tabled its bid for the 61 per cent of BSkyB it did not already own. News Corp already had a significant amount of power within the UK media and, on the face of it, increasing its stake in the satellite broadcaster seemed to consolidate rather than extend this power.
It achieved this position gradually, over the course of the few decades, and within the parameters of existing media regulation.
So by the time it tabled a bid last summer, given the regulatory framework that existed, there was only ever likely to be one outcome. This was made more likely still when the European Commission said in December that “it was confident this merger will not weaken competition in the United Kingdom”.
It is unlikely that, had the bid been referred to the Competition Commission, it would have come to a different conclusion.
Ofcom admitted the limitations of existing regulation in its recommendation to the Secretary of State in January:
“The future market developments explored in this report suggest that the current statutory framework may no longer be equipped to achieve Parliament’s policy objective of ensuring sufficient plurality of media ownership.”
As a result, we can now look forward to a media near-duopoly in the UK – News Corp and the BBC. Not a great outcome for those who care about media plurality. The one positive repercussion – if one is looking for any positives from this decision – is that it will be an awful lot harder in future to shrink the BBC in such a Murdoch-dominated media world.
The law may now be changed – belatedly – to address the limitations Ofcom identified (though don’t hold your breath); meanwhile, the News Corp horse has galloped into the distance.
This post was first published on LeftFootForward on January 26th 2011
There is a moment in The King’s Speech, just nominated for 12 Oscars, in which George V loses patience with his son’s stutter and yells at him to get his words out.
BSkyB has similarly lost patience with the process for deciding whether News Corporation be allowed to buy the 61 per cent of Sky it does not currently own. It has yelled at Ofcom (or the equivalent – a vitriolic letter), accusing the independent media regulator of distorting its brief, ‘using unreliable metrics’, and ‘making questionable judgments’ such that ‘its conclusions are flawed’. And this is the ‘non-confidential version’. One wonders how much ruder the confidential one was.
Are there any grounds to justify Sky’s attack?
Back in November 2010 Ofcom was asked, by the business secretary, to investigate whether News Corp’s bid for Sky raised enough questions about the future plurality of news provision to warrant passing it on to the Competition Commission.
In order to be passed on it had to pass a pretty low threshold. It simply had to assess whether the takeover would reduce the number of providers and hold a reasonable belief ‘that the proposed acquisition may operate or be expected to operate against the public interest’.
On the first, the answer was easy to calculate. At the retail level (i.e. news consumed directly by the public) the number of organisations will fall from 16 to 15. At the wholesale level (e.g. Sky providing news for commercial radio stations) the number will fall from 11 to 10.
On the second Ofcom inevitably had to take a more qualitative approach, although it has done its best to use quantitative methods to make it. It tries to work out the relative ability of different news organisations to influence and inform public opinion, based on the amount of news people consume from different outlets.
Using this approach it calculates that, for example, were the merger to go through, News Corp’s wholesale news reach as a percentage of regular news consumers would increase from 32% to 51%.
Therefore on both these criteria Ofcom found that the public would have less choice of news provider. Given such an assessment it is difficult to see how Ofcom could have done anything other than advise Jeremy Hunt to refer the bid to the Competition Commission.