BSkyB warns takeover block could undermine Sky News

BSkyB has warned Ofcom that blocking News Corp‘s takeover could place a question mark over the future of Sky News.

The satellite and digital broadcaster said blocking the takeover risked harming media plurality in the UK by undermining the commercial incentives for it to run Sky News.

BSkyB made its stark assessment last night in a submission to the broadcast regulator’s investigation into News Corp’s proposal to buy the 61 per cent of BSkyB it does not already own and just hours after the Church of England became the latest critic to call for the takeover to be blocked.

Unlike terrestrial broadcasters who are obliged to provide news under the terms of their broadcast licences, BSkyB said that Sky News existed as a ‘distinct, impartial and independent news service’as a result of a commercial imperative.

BSkyB said: ‘A conclusion that the transaction would result in a loss in plurality could perversely increase the risk of that very situation by undermining the incentives which have resulted in the provision of Sky News to date.”

BSkyB said this would be a ‘wholly unwelcome outcome, contrary to the public interest,’and not one the independent committee set up to oversee matters related to the proposed takeover wanted to see.

The broadcaster also said it wanted to ensure the review of News Corp’s proposal did not set a precedent ‘which would inappropriately or unduly restrict any merger or acquisition opportunities which may be available to Sky”.

The submission to Ofcom comes just days after News Corp’s chief executive in Europe and Asia, James Murdoch, warned the Government that blocking it could threaten UK jobs and future investment in this country by the US media giant.

The broadcast regulator is investigating the proposed takeover at the behest of business secretary Vince Cable who earlier this month asked it to examine the ‘media plurality issues that may arise from this proposed acquisition”.

Cable’s intervention came after the formation of an unprecedented alliance of leading print and broadcast media businesses who wrote jointly to the Government asking it to look at Rupert Murdoch’s attempts to take full control of BSkyB.

The letter to Cable claimed that a merger of the country’s biggest newspaper group, the Murdoch-owned News International, and Sky could harm media plurality.

The letter was signed by the chief executives of Telegraph Media Group, Associated Newspapers and the Guardian Media Group, regional newspaper publishers Northcliffe Media and Trinity Mirror, along with those of BT and Channel 4 and BBC director general Mark Thompson.

The Church of England joined that protest yesterday when the Bishop of Manchester, right reverend Nigel McCulloch, warned that News Corp would dominate Britain’s media if it took full hold of BSkyB.

In yesterday’s submission BSkyB said Ofcom should assess only how existing levels of plurality would be affected by the takeover and leave examination of the commercial impact to the European Commission.

As such, the regulator’s focus should be solely on BSkyB’s provision of national news programming rather than on a broad range of content genres, BSkyB said.

BSkyB said Ofcom needed only to assess whether Sky News would cease to have an independent voice as a result of the takeover.

The broadcaster then said that if Ofcom considered that Sky News would cease to be such an independent voice as a result of the transaction, it would then need to consider whether the takeover would result in ‘serious public interest consequences”, ‘unacceptable levels of dominance’and a ‘significant reduction in plurality”.

BSkyB said it was relevant, in this regard, to remember that Sky News’ share of national television news viewing remains small at around seven per cent.

The broadcaster then called for Ofcom’s investigation to be ‘rigorously evidence based’as it urged it to ‘treat with due scepticism submissions by commercial competitors”.

In footnotes BSkyB highlighted how one of its commercial competitors, BT, was a signatory to the letter calling for a public interest intervention despite not having made a ‘significant contribution’to the plurality of news provision in the UK.

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