As it increases its investment in original British fare, Sky has acquired Parthenon Media Group to establish an international distribution arm within the company. Parthenon founder and CEO Carl Hall will oversee the new business. Sky has said it intends to up its annual spend on British content creation to £600M by 2014. Funds generated by sales of its original programming will be funneled back into UK production. Among shows commissioned this year are dramas and comedies starring Hayley Atwell, Brenda Blethyn, Stephen Fry, Richard E. Grant, John Hurt, Eddie Marsan, Stellan Skarsgård, David Tennant, Emma Thompson and Olivia Williams. Sky1 comedies Stella, Starlings and Trollied have all been ordered for a second run and drama Hit & Miss, starring Chloe Sevigny, started its run in May. The indie Parthenon has distributed and produced factual and children’s programming since 2002 and has 1,400 hours in its catalog, according to its website. As of June 30, 2011 it had gross assets of £18.2M, although financial terms for the Sky deal were not disclosed.
Last week, Rupert Murdoch resigned from the board of News International, the holding company of News Corp’s UK newspapers, as well as other subsidiary boards connected with News Corp in the UK and the U.S. News Corp explained the move as corporate housecleaning ahead of a restructure that will split the conglomerate into two distinct publishing and entertainment companies. Some watchers have been skeptical, suggesting this is a further step in putting distance between Murdoch and the UK print assets that have been embroiled in a phone-hacking and bribery scandal for more than a year. The taint was emphasized today when eight former employees of the now-shuttered News Of The World, including erstwhile News International chief exec Rebekah Brooks, were informed they would face criminal charges in relation to phone hacking. Other watchers see this as potentially setting the stage for a sale by News Corp of the UK papers which now include The Sunday Times and tabloid The Sun. If Murdoch no longer sits on the News International board, in other words, it makes it more plausible for a sale of that company to go through down the line. Still another view is that distancing himself from his beloved British press holdings is a means to clear the way for the acquisition of the long-coveted 61% stake in British satcaster BSkyB that News Corp does not already own.
A report commissioned by BSkyB detailing the company’s economic footprint hopes to provide “a good example of the important contribution that a successful British company can make, particularly at a time when economic growth is harder to come by.” The report also comes at the same time as UK regulator Ofcom is deciding whether it is fit to hold a broadcast license in light of the scandals at News Corp-controlled newspapers. News Corp owns 39% of BSkyB and the consideration of whether a licensee is “fit and proper” takes into account any relevant misconduct of those who manage and control it.
A major question swirling around News Corp since last week’s announcement that the company will divide itself in two has been whether another run will be made at the 61% of British satcaster BSkyB that News Corp does not already hold. UK regulator Ofcom is currently weighing whether News Corp is fit to own a broadcast license at all in light of the phone-hacking scandal at its UK print business. And, although the org isn’t commenting publicly, I understand that News Corp’s intent to divide may be taken into consideration for the “fit and proper” test. All information and evidence that’s available will continue to be assessed as the process is ongoing, I’m hearing. There is no time frame for Ofcom’s decision, but contrary to some reports, no announcement is expected before the Olympics later this month.
Although News Corp chief Rupert Murdoch told Fox News last week, “We’ve moved on in our thinking….I’m much more bullish about America,” Panmure Gordon media analyst Alex De Groote tells me he thinks another attempt to acquire BSkyB will happen “two to three years down the line.” He calls the move to split News Corp “tactically quite shrewd” as it detaches the tainted UK print assets from the entertainment division. But, he says, “Even if phone hacking had never happened, shareholders would have legitimately pushed” to separate the businesses. De Groote calls it getting away from what’s known as “the conglomerate discount”, which reflects the difference between what a conglom’s holdings are worth and the real value the market places on the whole. He adds that “Everything is about survival in the long term. In the short term, it’s sacrifice the British newspapers and everybody who gets in the way. The long term is preserving the Murdoch family and the medium term is to get BSkyB.”
The News Corp CEO just said in an interview on Fox News that his son is happy running his businesses in Australia. And there’s no decision yet about whether Rupert’s other kids — including James and Elisabeth Murdoch — might play bigger roles once the media giant is divided into an entertainment company and a publishing one. “They have to earn it, and they have to want it,” Rupert says. He also told interviewer Neil Cavuto that he’s no longer interested in BSkyB. “We’ve moved on in our thinking….I’m much more bullish about America.” Europe is in for “a tough, long haul” and possibly a recession, while “we’ve got things to be very bullish about in this country.” No, he isn’t tacitly endorsing President Obama. “I’m taking a medium and long term view” of the economy. Indeed, he says that the presidential election might not have a big impact on News Corp although “if taxes go up, we’ll have less cash. If that happens, the economy will go down.”
The UK government and regulator, Ofcom, are taking the next steps to bring the Digital Economy Act’s mass notification system on copyright infringement into effect. After a court case slowed down the legislation, Ofcom’s new draft code is now expected to head to Parliament later this year. The code calls on ISPs to alert subscribers when their connection is suspected of being used to illegally share films or music. For now, the code covers ISPs with more than 400K broadband customers including BT, Everything Everywhere, O2, Sky, TalkTalk and Virgin. BT and Talk Talk had previously argued that it was not for them to police their customers, but they lost on appeal. ISPs will also be required to explain to subscribers how they can protect their networks and where they can find licensed content. Copyright owners in turn are expected to invest in awareness campaigns and develop “attractive online services to offer their content.” The government, for its part, has put secondary legislation before Parliament that would see the notification system paid for by rights holders with ISPs paying a smaller element.
LONDON and SANTA MONICA, June 18, 2012 – Leading global film and television studio Miramax and BSkyB (Sky), the most comprehensive multichannel, multi-platform television service in the UK and Ireland, today announced the completion of a new licensing deal.
Under the terms of the agreement, Sky will hold exclusive rights to a substantial package of Miramax films including Academy Award® winning Life is Beautiful, Captain Corelli’s Mandolin, Spy Kids, and Starsky & Hutch among others. These titles will be delivered across the range of Sky Movies subscription channels in high definition (HD), through Sky’s on-demand service Sky Anytime+ and on the move via Sky Go.
A Labour Party motion calling for an investigation into Culture Secretary Jeremy Hunt’s handling of News Corp’s bid for BSkyB has been quashed in Britain’s House of Commons. Prime Minister David Cameron’s Conservative Party prevailed in the vote, winning by 290 to 252. Deputy Prime Minister Nick Clegg had called for his Liberal Democrats to abstain in what now looks like an effort to make a point in the face of Cameron’s earlier independent decision not to launch a Hunt probe.
Overall, Clegg cut a humble figure at Leveson saying he was basically relegated to the kids’ table the first time he met Rupert Murdoch. His party faced “indifference at best, and derision at worst” from Murdoch execs, he said. Still, regarding BSkyB, he was told by a Parliamentary aide that it “would be good for the Lib Dems to be open to the bid, otherwise we would expect no favorable treatment from the Murdoch press.” Clegg said he once questioned the timing of News Corp’s bid for the 61% of BSkyB it did not already own since news of the acquisition came right after the 2010 general election. Clegg said he was “quizzical,” so, he asked Murdoch at News International’s summer party that year, “Why are you doing this now?” The answer, Clegg said, was not revealing.
UK Prime Minister David Cameron said he won’t launch a probe into whether Culture Minister Jeremy Hunt breached the ministerial code of conduct for Hunt’s part in overseeing News Corp’s ultimately failed bid for BSkyB. Hunt has been in the spotlight for his supposed close ties to News Corp’s Rupert Murdoch and son James, which raised eyebrows when he was handed a quasi-judicial role overseeing the $14B bid for the 61% of BSkyB that News Corp didn’t already own. During Hunt’s testimony today before the Leveson Inquiry charged with investigating UK media ethics, it was revealed he texted his congratulations to James Murdoch in December 2010 after News Corp’s bid cleared a regulatory hurdle. “Congratulations on Brussels,” Hunt texted to Murdoch after the European Commission ruled it would not block a deal. “Only Ofcom to go.” Not long after, Hunt was appointed the government overseer of the bid, which was scrapped in July as the phone-hacking scandal at News Corp-owned tabloid News Of The World erupted. Hunt told the inquiry today he would not have sent the text if he had known he was getting the overseer role. After watching Hunt today, Cameron said the Culture Minister acted “properly” throughout the period he was responsible for the bid.
The British Film Institute today laid out its five-year plan for the future of UK film funding and how it proposes to invest an expected total of £273M in Lottery money from 2012-2017. The org said £28.2M will go towards supporting British film on an annual basis, including an increase in production and development funds of 30% over the next five years. At the same time, the UK government has announced steps it’s taking to bolster the UK biz. Culture Minister Ed Vaizey said the British Film Commission will create a strategic partnership with the UK Trade & Investment body and the BFI to provide an additional £400,000 to the BFC’s budget.
The announcements were made today in response to a UK film policy review that was published in January and which notably called for a “reward for success” scheme. The idea being that BFI development funds should be returned to companies who’ve used them successfully and then be reinvested in future projects. The BFI has confirmed that Lottery investment will be restructured to reward success while the government said the group will set up a cross-industry task force charged with examining ways in which the business can reduce overall dependency on public funding.
The debt rating service says that bond holders have no need to fear the fallout from a parliamentary report yesterday that says Rupert Murdoch’s handling of the UK hacking scandal made him “not a fit person to exercise the stewardship of a major international company.” The media and entertainment giant’s “significant cash balance and strong free cash flow generation mitigates the uncertainty of additional financial fallout from the phone hacking scandal,” Moody’s Investors Service concluded today. News Corp has a strong Baa1 senior unsecured rating; it generates about $2.5B a year in cash and had $9.4B in its coffers at the end of 2011, equal to more than 60% of its $15.5B in debt. Moody’s says that after “cutting through the highly politicized hyperbole” it concluded that News Corp can “mitigate potential costs” from the scandal. The report from the Culture, Media and Sport Committee “represents an opinion without any direct regulatory implications.”
On an earnings call this morning, BSkyB chief executive Jeremy Darroch said the company should be judged based on its “track record as a broadcaster.” He was addressing the issue of UK regulator Ofcom’s ongoing investigation into whether James Murdoch and News Corp are “fit and proper” persons to hold a broadcast license on behalf of BSkyB. (Murdoch stepped down as CEO of BSkyB in early April, but he remains a non-executive director.) Darroch emphasized that Sky and its largest shareholder, News Corp, are “separate companies” and said, “We think it’s our track record as a broadcaster that’s the most important in determining our fitness for a license.” He added, “It’s important to remember the broader contribution that SKY makes to the UK…We think that shouldn’t be lost in all of this.” The satcaster’s results for the 9 months ended March 31 come one day after a UK parliamentary committee said Rupert Murdoch was “not a fit person” to run an international company.
Final Phone-Hacking Report From UK Committee Divided On Rupert Murdoch, Calls Him “Unfit” To Lead Company
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UPDATE, 4:37 AM: The report is not a united one. It passed 6 votes to 4 with 3 voting against the inlcusion of a line that reads that …
Embattled British politician Jeremy Hunt told reporters today in London that he would hand over private correspondence to the UK inquiry into media ethics. Hunt has come under fire since it was revealed Tuesday that …