Sky News to be spun-off
The U.K. government has greenlit News Corp.’s purchase of the 61% of BSkyB stock it does not own already following new assurances that the conglom will spin off Sky News as a separate company.
Media minister Jeremy Hunt said Thursday that since he gave the provisional go-ahead in March, a “more robust set of undertakings” had been agreed to for the Sky News spinoff in order to allay fears the move would restrict the plurality of news supply in the U.K.
The extra measures involve the presence of an independent director with senior journalism expertise at Sky News board meetings when decisions on editorial matters are made.
The paybox must continue to cross-promote Sky News on its own channels on the BSkyB platform. In addition, “a monitoring trustee” will be appointed to ensure that News Corp. complies with the undertakings in the run-up to the spinoff.
Sky News’ articles of association must be approved by the media minister. “The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality,” Hunt said. “A number of suggestions were made in response to the consultation which could further strengthen the undertakings, particularly around editorial independence, business viability and the articles of association. I am therefore proposing some changes to the undertakings and I will now hold a further public consultation.”
Interested parties have until end of working day July 8 to make their submissions.
Negotiations with the satcaster’s stockholders are likely to intensify over the key issue of how much News Corp. will have to pay for the 61% of BSkyB owned by third parties.
There is speculation that the investors are likely to demand £4 billion ($6.4 billion) more than the $12.5 billion originally offered by News Corp. last summer. Due to a stellar performance the paybox’s stock price has continued to rise while the horse-trading between News Corp., the U.K. government and regulators took place. The company originally tabled a 700p ($11.18) a share offer when BSkyB’s share price was under 600p ($9.59).
The government received more than 40,000 representations as part of the original consultation on the deal, which has been vigorously opposed by an alliance of newspapers and broadcasters, including the publishers of the Guardian, the Daily Mail and the Daily Telegraph, and Channel 4. The director-general of the BBC Mark Thompson has also been a fierce critic of the move.
Critics insist a wholly owned BSkyB will give News Corp., owner of four newspapers in Blighty, including bestselling tabloid the Sun, unprecedented market power.
Some analysts claim that within five years News Corp.’s revenues from BSkyB will be bigger than the combined revenues of the BBC, ITV, Channel 4 and Channel 5. In a statement, News Corp. said it would “continue to engage constructively with the regulatory process.”