Rupe: No Five drive

Mogul denies deal amid 'Murdoch clause' furor

LONDON — News Corp. chief Rupert Murdoch has dismissed long-standing rumors of a “deal” with the U.K. government over the country’s proposed media ownership laws that would allow him to buy a British terrestrial web for the first time.

And he has denied that he wants to take over commercial channel Five.

“There’s some theory that, in the present media legislation in Britain, I’ve done a deal with the government so that we can buy Channel Five,” Murdoch told investors Tuesday at a News Corp. third-quarter earnings briefing. “I’ve never asked to buy channel Five and if it ever went to a vote of the Sky board, I would vote against it.”

Changes in media ownership rules proposed in the Communications Bill, which is being debated in the House of Lords would open up the media to buyers from outside the European Union and lift the ban on national newspaper owners having stakes in terrestrial channels.

That could pave the way for Murdoch’s News Intl., which owns the U.K.’s four dominant papers, including the Times and mass circulation tabloid the Sun, to invest in Five.

His News Corp. already has a 36.6% stake in BskyB, the satcaster that dominates the U.K. pay TV arena with almost 6.7 million digital subscribers, well ahead of the country’s largest cable operator NTL with 2 million.

Political opposition has reached fever pitch over the proposed change, called the “Murdoch clause.”

Filmmaker David Puttnam, who chaired a committee that scrutinized the Communications Bill, opposes parts of the proposed law and is backed by 60 Labor and 50 Liberal Democrat peers, including former BBC chairman Marmaduke Hussey and former chairman of regional commercial broadcaster HTV Nicholas Edwards.

Addressing the House of Lords recently, Puttnam, said “Should News Corp. or any of its associates acquire, say 35% of Five, its capacity to cross-promote that channel using its dominant satellite position and its newspaper holding would be entirely without precedent.”

Murdoch has long wanted to break into Blighty’s terrestrial market but continues to deny any interest in Five, in which RTL has a 65% stake. United Business Media has been looking for a buyer for its 35% share.

Media Secretary Tessa Jowell must get the bill through Parliament by the end of July to comply with a European directive.

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