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News Corp. & James Murdoch’s Fitness To Hold BSkyB License Weighed By Regulator

By | Friday March 9, 2012 @ 4:08am PST

When the phone-hacking scandal blew wide open in the UK last July, Rupert Murdoch abandoned a plan to acquire the 61% of BSkyB that his News Corp did not already own. Now, the scandal could have an even further impact on News Corp, BSkyB and the satellite broadcaster’s chairman, James Murdoch. On Thursday, it emerged that UK communications regulator Ofcom had ramped up a probe into whether James Murdoch and News Corp itself are “fit and proper” persons to own a broadcast license. If they are deemed unfit, speculation is News Corp could be forced to reduce its BSkyB stake to a non-controlling level while James Murdoch could be forced to step down. He left his post as chief of News Corp’s UK press arm, News International, last month, but has remained as chairman of BSkyB.

Based on documents it acquired under a Freedom of Information Act request, The Financial Times reported late Thursday that Ofcom had created “Project Apple” to handle the fit and proper probe. The team is scrutinizing material coming out of the Leveson Inquiry into UK media ethics as well as Scotland Yard’s investigations into phone hacking and alleged payments made to public officials by journalists at newspapers controlled by News International. The documents show that the fit and proper question was discussed in late 2011, but escalated to project level in January. … Read More »

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News Corp/BSkyB Deal Almost Certain To Be Approved, Say Analysts

City and media analysts agree that it’s almost certain News Corp will now get approval to buy the 61% of BSkyB it doesn’t own. The deal would cement Rupert Murdoch’s position as the most powerful media magnate in the world. Investec Securities, the investment bank, says it’s now 90% certain the deal will go ahead. Credit Suisse puts the likelihood even higher at 95%. BSkyB’s share price rose by 2% today in the wake of UK business secretary Vince Cable, the man who was supposed to have final veto over the deal, being stripped of his media powers. Brit TV and radio news bulletins have been about little else. Investment bank Nomura says Cable’s removal represents a “big step forward” for News Corp. Cable told 2 undercover reporters from the Daily Telegraph newspaper that he had “declared war” on Murdoch. Cable was supposed to be impartial when weighing evidence from media regulator Ofcom as to whether to refer the deal. News Corp’s bid will now be vetted by culture secretary Jeremy Hunt, a man known to be sympathetic to BSkyB. “It does seem to me that News Corp do control Sky already, so it isn’t clear to me that in terms of media plurality there is a substantive change,” Hunt said in June. Now that he’s got the quasi-judicial role, Hunt will want to be seen as impartial, media analyst Claire Enders tells me. “Jeremy will be at pains to … Read More »

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Brussels Postpones Murdoch/Sky Decision

News Corp has balked at selling off Sky News to satisfy Brussels. Despite that nose-thumbing, the European Commission has extended from December 8 to December 22 the deadline for the first phase of its competition investigation of Rupert Murdoch’s £12 billion ($19 billion) takeover of BSkyB. What Brussels is worried about is a 100% News Corp-owned BSkyB deal as the cornerstone of a global pay-TV empire. The European probe is separate from the investigation by British regulator Ofcom which will report on December 31 and still could derail the deal.

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James Murdoch Bares Teeth Over Sky Bid

James Murdoch has warned the UK government that News Corp could move overseas if the regulator blocks its £7.8 billion ($12.5 billion) bid for BSkyB. News Corp’s European and Asian boss made the veiled threat talking to investment bank analysts in Barcelona. The government must decide whether it wants to risk “jeopardising an £8 billion investment in the UK” with a prolonged investigation, Murdoch said, noting that News Corp could relocate some of its most innovative projects to more “welcoming” countries if the UK blocks its bid for BSkyB. “From India to Italy and to Germany, countries are becoming more welcoming of investment and more welcoming of what we can bring,” Murdoch said. Read More »

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Puttnam: Murdoch Takeover “Extremely Damaging To Informed Democratic Debate”

Speaking in the House of Lords, the UK equivalent of the Senate, David Puttnam said that News Corp’s bid to take control of BSkyB posed a threat to democracy. Here are excerpts from the speech given by the one-time Columbia Pictures boss:

My Lords… I had the honour of entering your Lordships House thirteen years ago tomorrow. Since that time there have been three or four really big issues with which I’ve consistently tried to engage – in part because they relate to experiences gained in my former life, but also because I believe they represent the type of issues upon which rests the future of the type of society most of us would wish to live in… My Lords, the purpose of this afternoon’s debate is to draw attention to the possibility that we are on the edge of a very slippery slope – one that could find us falling further and further under the influence of a single, US-based owner, with a highly questionable interest in the benefits of a diverse and flourishing plural media here in the United Kingdom. So why this debate, and why now?

The primary reason My Lords is that News Corporation yesterday notified the European Commission of its intention to purchase the 61% of BSkyB that it does not presently own. As I’ve already mentioned, this morning we heard the welcome news that this proposal had been referred by the Secretary of State, to Ofcom. It’s my most sincere hope that the Coalition’s proposed ‘trimming’ of Ofcom’s powers will not result in any diminution of its capacity to exercise those powers in respect of important matters such as this.

There, are of course, a number of aspects to media plurality – notably the Government’s proposals to repeal the local “cross-media” ownership laws, but this afternoon I only have time to focus on the really big issue resulting from News Corporation’s power, reach and influence. It’s my contention that if regulators and legislators in Europe and the UK remain supine, and simply wave this proposed acquisition through, the consequences for the citizens, as well as the political class in this country could become deeply troubling. The purchase of these shares would give News Corporation an unprecedented level of control over the UK media, one that to my mind has the potential to be extremely damaging, not just in respect of media plurality, but to informed democratic debate as a whole.

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UK Government Probes Murdoch BSkyB Bid

Vince Cable, the British business secretary, has ordered media regulator Ofcom (the UK’s equivalent of America’s FCC) to investigate Rupert Murdoch’s plan to take full control of the pay-TV operator BSkyB. He’s intervened now that News Corp has formally notified the European authorities of its plans for a 100% takeover of BSkyB. Rival media groups keep complaining that would concentrate too many news outlets under one person’s control. Murdoch already owns 3 of the Britain’s biggest newspapers. Ofcom now has until the end of this year to decide whether the takeover would harm UK media plurality.

News Corp says it looks forward to discussing the takeover with the authorities now that it has delivered a 1,000-page document to Brussels-based competition regulators who will decide whether there are grounds for a deeper anti-trust investigation by December 8. Claire Enders, the media analyst who wrote to Cable back in September warning him about the impact of the Sky takeover, tells me: “We expected that this step would be taken. The law is reasonably straightforward, and the transaction always seemed to us to meet the conditions for a decision in favor of an intervention.”

Murdoch’s plans will come under concerted attack in the House of Lords today. David Puttnam will tell his fellow Lords that the buy-out would make Murdoch the most dominant … Read More »

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Rupert Murdoch Blasts Anti-News Corp Alliance Opposed To BSkyB Bid

Rupert Murdoch took a swipe at rival media groups striving to block News Corp’s takeover of BSkyB and accused them of petty thinking. In what was billed as his first major speech in the UK since 1989, Murdoch tonight was the inaugural speaker of the Margaret Thatcher Lecture series at the UK’s conservative Center For Policy Studies in London. He said: “When the upstart is too successful, somehow the old interests surface, and restrictions on growth are proposed or imposed. That’s an issue for my company … These are small thinkers who believe their job is to cut the cake up rather than make it bigger.” Murdoch was referring to bosses of some of Britain’s biggest media groups — including the BBC, the Daily Mail, the Telegraph and Channel 4 – who have written a joint letter to British business secretary Vince Cable calling for him to intervene. The government minister has the power to refer News Corp’s proposal to UK media regulator Ofcom (equivalent of America’s FCC), potentially derailing the £8 billion takeover. BSkyB is likely to notify Brussels officially of News Corp’s takeover intentions by the end of October. That starts the clock for the business secretary, who has to make a decision on whether to intervene within 2 weeks after that. 

In what at times was a self-effacing speech – at one point he referred to himself as a “parvenu” – Murdoch paid tribute to the former British prime minister and her legacy. Murdoch also … Read More »

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BBC Boss Warns Of ‘Abuse Of Power’ If Rupert Murdoch Takes Control of BSkyB

Mark Thompson has called on the British government to intervene in News Corp’s bid to take full control of BSkyB. Speaking on PBS’s Charlie Rose Show in New York, he agreed there was potential for an abuse of power by the Murdoch media group if BSkyB, the UK’s biggest broadcaster in terms of its £5.4 billion revenue, comes under the same ownership as News International, the UK’s largest newspaper group. Combining BSkyB with News International, owner of The Sun, The Times and The Sunday Times, raised issues of “how you ensure plurality in the system”, Thompson warned. He said that the UK government should look at those issues – although he stopped short of calling for the deal to be blocked. Read More »

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David Puttnam: ‘If Rupert Murdoch Could Turn Sky News Into Fox News He Would’

Channel 4’s deputy chairman has gone on the attack again, bashing Rupert Murdoch and News Corporation for the amount of power they wield in British media. On Sunday Puttnam, former CEO of Columbia Pictures, gave an interview to the Observer newspaper, calling for UK business secretary Vince Cable to block News Corp from owning BSkyB outright. Puttnam warned the BBC this afternoon that a unified Murdoch empire would have a single voice penetrating newspapers, TV and e-readers. Read More »

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Fears Grow If Rupert Murdoch Buys BSkyB

Nobody expects UK Business Secretary Vince Cable to block Rupert Murdoch from buying the 61% of Sky he doesn’t already own. But Cable, a popular politician here in Britain, is unhappy about Murdoch’s tightening grip on UK media. The official cannot even start an examination until News Corp has filed its takeover bid with the European Commission in Brussels. I’m told that News Corp is still in pre-notification discussions with the IC and conversations are going back and forth between Brussels and News Corp headquarters in Isleworth, west London. Formal notification should happen within weeks.

Enders Analysis — the TV consultancy which has already written to Cable appealing for him to block News Corp’s Sky takeover on media plurality grounds — estimates that, sometime between 2015-2020, News International and Sky will control 50% of the UK newspaper and television markets respectively. Sky is already bigger than the BBC is terms of broadcasting revenue, earning £5.4 billion compared with the BBC’s £3.6 billion licence fee. “I think the chances of an intervention are very slim indeed,” Enders tells me.

This morning’s Financial Times has called on Cable to investigate the deal. Yet Cable, who’s a Liberal Democrat minister in the government coalition, is experiencing what any British politician – Conservative or Labour – fearful of upsetting the Murdoch press feels right now. Because Murdoch’s power, according to Labour PR adviser Lance Price, is rooted in fear of what he might do as much as in fear of what … Read More »

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Chase Carey Talks Tough Over Sky Bid

News Corp’s deputy chairman has set his face against increasing its £7.8 billion ($12.4 billion) for the 60% it doesn’t own of BSkyB. Carey has warned the Brit pay-TV giant that Rupert Murdoch’s company has “other options for its cash”. In yesterday’s investor call, Carey described the bid — rejected by BSkyB’s independent board for being too low – as “full and fair.” Although the two companies are unable to agree on price, they have entered into a cooperation agreement. Carey said the immediate focus is on getting regulators to approve the deal. News Corp is due to submit the transaction for European regulatory approval in Brussels within the next few weeks, a process which is expected to take up to one month. The decision could then be handed back to UK regulators. It will be interesting to see what happens next. It’s not as if there are any other bidders out there.

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