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Why Vince Cable must reel in News Corp's bid for full control of Sky/News Corp control reduces the plurality of media ownership

Monday 11 October 2010 Article history



Of all the issues piling up on the desk of the business secretary, Vince Cable, none is more important to the media than whether Rup/ert Murdo/ch's News Corp should be allowed to take full control of BSky/B.

Last week it was revealed that rival newspaper owners and the BBC were preparing a letter calling on the government to intervene. Memories go back to the early years of the Thatcher government when Murd/och took control of the Times and the Sunday Times. The government then refused to intervene. Will history repeat itself?

One point is certain. This is not just a question of News Corp coming up with the right price. Special factors relate to media companies that do not apply to a normal company takeover. There is an essential question of public interest: namely whether one company has too much media power and too much influence on the political debate of the UK. There are many who say that the Murdochs – with their string of newspapers – already have too much power. What additional harm can there be in allowing News Corp to turn its almost 40% stake to full control?

The answer lies in the constitution of the S/ky board. The directors have a duty and responsibility to the other shareholders who own 60% of the company – and by all reports show a commendable independence of judgment. It is not some cosy little advisory board that meets infrequently and has next to no influence. If News Corp takes full control, that represents real change and an increase in real power. It reduces the plurality of media ownership which should be a prerequisite in a thriving democracy.

In one respect, however, News Corp is right. Opposition to its plans comes from rivals, who are not always acting altruistically. Nor are they always willing to subject themselves to the public scrutiny that they urge on others. When the House of Lords communications committee looked at ownership of the news it was not always easy to persuade newspaper witnesses to appear. Ironically, the man who needed no persuasion was Rupert Murdoch.

As for the BBC, it needs to be careful before fulminating too much about media power. In news radio it has a strong market position verging on monopoly. The daily political agenda is set not by parliament but by the Today programme. The position will get worse if ITV withdraws from regional television news leaving the BBC in almost total command.

Yet none of this is an argument for waving through the News Corp bid. Over the past 20 years the trend has been to greater media consolidation and fewer owners. The regional press, for example, is now dominated by three or four large companies when there was once a rich and varied range of ownership.

Of course much of this has to do with the growth of the internet and changing reading habits. Nevertheless what it means is that production of the news in Britain is in fewer hands. Perhaps this is inevitable with regional newspapers who are all engaged in a brave fight to survive at all and need every economy of scale they can devise.

But this is not the case with television, which remains the chief provider of news and is capable of earning massive revenues. Sky has a revenue of almost £6bn. Any proposal to allow a company of that size to come under the same ownership as the country's largest national newspaper group must be a matter of legitimate public concern. So Cable should certainly call in any bid by News Corp for full control of Sky – but that should not be the end of it. The government should go one step further and examine what impact the increasing concentration of ownership is having on the news we all receive.

Lord Fowler is the former chairman of the House of Lords select committee on communications


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Why Vince Cable must reel in News Corp's bid for full control of SkyNews Corp control reduces the plurality of media ownershi





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