You will be redirected back to your article in seconds

U.K. OKs News Corp.-BSkyB deal

Sky News to be spun off as separate company

LONDON — News Corp.’s proposed £8 billion ($13 billion) purchase of the 61% of BSkyB it does not own already has been greenlit by the U.K. government on condition that Sky News is spun off into a new listed company.

The complex deal, certain to attract widespread criticism from rivals and commentators worried about the concentration of so much media power in the grip of one company, involves the setting up of a new firm, NewsCo.

News Corp. is to license the loss-making Sky News brand to the new operation for seven years and funding will be guaranteed for a decade.

The Murdoch-owned conglom will have a 39.1% stake in NewsCo — equivalent to its current holding in BSkyB — with the other stockholders comprised of existing investors in the paybox.

NewsCo is to be run by an independent board and chairman, a stipulation designed to ensure that no member of the Murdoch family chairs the new entity.

James Murdoch, who heads News Corp.’s activities in Europe and Asia, presently chairs both BSkyB and Sky News.

Hunt said: “Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corp./BSkyB merger go ahead.

“The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corp. than it currently has.”

News Corp. now has to agree a price with BSkyB’s directors, but despite the fact that the value of the paybox’s stock has risen significantly since the takeover was announced last June, Murdoch knows that having full control of BSkyB represents a huge financial win for the conglom.

“Rupert Murdoch would have sold his granny to get the rest of BSkyB,” former Sunday Times editor and former Sky topper Andrew Neil told the BBC.

“It is worth billions to his balance sheet.”

Neil suggested the guarantees Murdoch has given the British government were unlikely to stand the test of time.

He said: “It is not clear that this is forever. Sky News could easily come back to the News Corp. fold.

“This gets Rupert through a difficult period. It is not the end of his connection to Sky News.

“With Rupert the real negotiations begin once you’ve done the deal.”

However, U.K. media commentator Steve Hewlett disagreed with Neil and said it was an “elegant” arrangement that would be legal binding.

“It is a proper structural remedy,” he said.

There will now be a 15-day consultation period on the agreement.

Owning BSkyB outright will overnight turn News Corp. into a media giant of unprecedented size in the U.K. market dwarfing all rivals in terms of revenue.

In a statement, News Corp. said that while it “continues to believe that the proposed acquisition of the shares in BSkyB that it does not already own will not result in insufficient plurality for any audience in the U.K., it has submitted this comprehensive proposal in order to avoid a lengthy and costly review by the Competition Commission.”

More TV

  • Jason Flemyng, Casting Director Lucinda Syson

    Jason Flemyng, Lucinda Syson Launch Film and TV Indie The Kernel Factory (EXCLUSIVE)

    Jason Flemyng, fellow actor Ben Starr, casting director Lucinda Syson, and finance expert Cristiano D’Urso are opening The Kernel Factory, a new U.K.-based film and TV indie. Flemyng has a long list of movie credits including “The Curious Case of Benjamin Button,” “The League of Extraordinary Gentlemen,” and Guy Ritchie’s “Lock, Stock and Two Smoking [...]

  • ITV Wins Pre-Sales for Mipcom Drama

    Pre-Sales for 'Noughts and Crosses' Lead Scripted Deals for ITV Studios at Mipcom

    ITV Studios Global Entertainment has racked up pre-sales for its leading Mipcom title “Noughts and Crosses”, and has unveiled a number of other deals on its drama slate. “Noughts and Crosses” has been acquired by M-Net in Africa, Russia’s More TV, TVNZ in New Zealand and on BBC First across Benelux prior to its launch [...]

  • Obit Obituary Placeholder

    Talent Agent Joseph Eric Rice Dies at 61

    Joseph Eric Rice, a talent agent who headed JR Talent Group, died unexpectedly at his home in Laguna Beach, Calif. He was 61. Rice headed his own talent agency based in Studio City where he primary handled actors. Earlier in his career, he headed the theatrical department at Abrams Artists Agency. Rice was born in [...]

  • Elisa Viihde Orders Second Series of

    Elisa Viihde Orders Second Series of Finnish hit Drama 'All the Sins' (EXCLUSIVE)

    Elisa Viihde, the thriving Finnish SVOD service, has ordered a second season of the local series “All the Sins” whose season one was a critical success and sold to over 30 countries. The new season of “All the Sins,” written by the award-winning Mika Ronkainen and Merja Aakko, takes viewers back in time to the [...]

  • Cuna-de-lobos

    Televisa’s Fabrica de Sueños Leads Content Revamp as ‘Cuna de Lobos’ Debuts Strongly

    Televisa’s Fabrica de Sueños (Dream Factory), launched last year under the leadership of Patricio Wills, has begun to reap ratings dividends from its anthology series of re-versioned hit Televisa telenovelas of the ‘80s and ‘90s. Founded under the slogan ‘Rewriting History,’ Fabrica de Sueños kicked off to stellar ratings in September with “La Usurpadora” (“The [...]

  • Project Blue Book

    Mipcom Roundup: A+E Sells, Ovation Buys, Fremantle Dating Format Takes Off

    In Variety’s second Mipcom roundup Ovation announces a raft of series and TV movie pickups, Nelson Mandela’s autobiographical recordings will be developed into a docuseries by Zig Zag and Hipster Media, A+E sells “Project Blue Book” to Viasat World and RTL, All The Kids and El Cañonazo are set to team in Spain on new formats; “Property [...]

More From Our Brands

Access exclusive content