News Corp's BSkyB bid referred by Hunt to Competition Commission

[muriel_volestrangler]

Source: The Guardian

Jeremy Hunt referred News Corporation's £8bn bid for BSkyB to the Competition Commission, pushing it back at least six months, after Rupert Murdoch chose on Monday to withdraw his offer to spin off Sky News in order to get the media merger cleared by regulators.

Forty-five minutes before Hunt was due to get up and address MPs to update them on how he would handle the Sky bid, Murdoch's News Corp said it was "withdrawing its proposed undertakings in lieu of reference to the Competition Commission".

Without the undertaking – spinning off Sky News into a separately listed public company 39.1% owned by News Corp – Hunt will have not alternative but to refer the bid for BSkyB to the Competition Commission. That will take 24 weeks, although the Competition Commission has the option of a further eight weeks to evaluate the deal.

News Corporation said it would work with the Competition Commission if necessary. "Should the secretary of state for culture, Olympics, media and sport decide on this basis to refer the proposed transaction to the Competition Commission for a detailed review, News Corporation is ready to engage with the Competition Commission on substance," it said in a statement.



Read more: http://www.guardian.co.uk/media/2011/jul/11/news-corp-bskyb-bid-hunt-competition-commission

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Murdoch is hurting.

[mwooldri]

1. Maybe I'm cynical but this may be "the way out" for Murdoch.

Also an interesting gamble.

If Competition Commission says "no", then the BSkyB deal falls through, and Murdoch does not win. Also since it is involving the purchase of a broadcaster, OfCom will have to have its say too in issuing the licence. If there are enough "IBA-type" people in OfCom then under present circumstances OfCom can't really issue a license based on the "fit and proper" test.

If the Competition Commission says "yes", then Murdoch wins, doesn't have to hive off Sky News, can merge more of it in with Fox News (USA) and he gets the prize.

My money is with the Competition Commission saying "no" because too much media would be in the place of one entity, with the BBC providing the only effective competition (ITV and ITN are still there but for news they're not the big forces they once were).

Maybe some enterprising people in the UK should file a complaint against Fox News. Fox News is carried on satellite and has to have a licence to broadcast to the UK, which it holds. Given the mess with News Corp, would News Corp be fit and proper to hold the UK Fox News satellite TV licence? I know that Fox News viewership in the UK is miniscule but wouldn't that send a message?

[muriel_volestrangler]

2. Robert Peston was saying something a bit similar earlier

but doesn't seem to have put it on his blog. It was basically that the referral buys Murdoch time and makes it a plurality decision. But I don't see that - as you say, Ofcom is surely still involved at least as much as they were before with a 'fit and proper' decision (maybe Murdoch thinks he can show himself F&P, given more time). But having Sky News back as wholly owned by News Corp makes a 'no' plurality decision very likely.

Perhaps the clause of the takeover bid that says News Corp pays all the fees if it fails to go ahead with the bid don't count if the bid is stopped by the Competition Commission. :shrug: