UK clears News Corp’s Sky deal
News Corp secured British government backing for its buyout of BSkyB after the minister responsible rejected complaints the move would give Rupert Murdoch too much power and influence.
The Department of Media gave its blessing to the multi-billion-dollar deal after News Corp agreed to spin off BSkyB’s influential Sky News channel to ease competition concerns amongst the industry and politicians.
The Conservative-led coalition government, often charged with being too close to Murdoch, announced a final short consultation period to consider further undertakings designed to guarantee the editorial independence of Sky News.
However, it avoided launching a prolonged investigation into the deal, which could have pushed the acquisition price higher as the British pay-TV group continues to perform strongly, adding new customers and selling new products at a heady pace.
“I am aware of the huge interest in the proposed merger,” minister Jeremy Hunt said.
“I could have decided to accept the original undertakings but a number of suggestions were made … particularly around editorial independence, business viability and the articles of association.”
The new proposals set strict guidelines around who can become an independent director at the new Sky News company — anyone who has worked for News Corp within the past five years cannot take the role.
Independent directors will also have to be present at board meetings if decisions on editorial issues are taken. A monitoring trustee will be appointed to ensure News Corp complies with the undertakings in the run up to the spin of.
“These proposals makes the original deal more secure,” media consultant Steve Hewlett told Reuters. “What it won’t do is fundamentally alter the views of people who, for their own commercial or other reasons, are passionately opposed to it.
“But are they in a position to stop it? I doubt it.”