News story

News Corporation / BSkyB merger

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Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, today published the results of the consultation launched on 3 March.

The Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, has today published the results of the consultation launched on 3 March on the undertakings in lieu offered by News Corporation in relation to their proposed merger with BSkyB. Alongside this he has also published subsequent advice from Ofcom and the OFT and has set out the next steps in the process.

The undertakings published on 3 March 2011 involve Sky News being ‘spun off’ as a separate company, operating independently from BSkyB. The Secretary of State, based on advice from the OFT and Ofcom, had said he was minded to accept the undertakings in lieu of a reference to the Competition Commission.

The consultation produced no new information to cause Ofcom and the OFT to change their earlier advice that the undertakings in lieu addressed Ofcom’s media plurality concerns and were viable for 10 years. However, a number of suggestions were made which could further strengthen the undertakings. As a result, Mr Hunt has today published a revised more robust set of undertakings for consultation.

The changes, which are set out in full in the revised undertakings published today, include:

  • The need for Sky News board meetings to include an independent director with senior editorial and/or journalistic expertise if decisions on editorial matters are to be made.
  • The appointment of a monitoring trustee whose main role is to ensure that News Corp complies with the undertakings in the run up to spin-off.
  • A requirement for Sky to continue to cross-promote Sky News on its channels.
  • A requirement for Sky News’ Articles of Association to be approved by the Secretary of State.

Mr Hunt said:

“I am aware of the huge interest in the proposed merger and am grateful to those who responded to the consultation. I have considered carefully the points raised and, as at all steps in this process, taken advice from the independent regulators.

“The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality. I could have decided to accept the original undertakings but 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.”

The consultation period on the revised undertakings will run until midday Friday 8 July.

More than 40,000 representations were received in response to the consultation, including a very large number of near-identical responses as a result of internet campaigns. The Secretary of State also met representatives from Trinity Mirror, the Guardian Media Group, the Telegraph Media Group, Associated News and Media, Slaughter and May and Avaaz. The substantive points raised were considered carefully by the Secretary of State, advised by the regulators.

The Secretary of State is required to look at the specific issue of media plurality related to the merger (competition issues having already been dealt with at European level).

Publications:

The Department for Culture, Media and Sport has today published on its website:

The Secretary of State will also make a written statement in Parliament later today.

Timeline:

3 November 2010: News Corporation notified the European Commission of its intention to acquire the shares in BSkyB that it does not already own.

4 November 2010: Secretary of State for Business, Innovation and Skills issued a European intervention notice in relation to the proposed acquisition.  The Business Secretary asked Ofcom to investigate and provide advice and recommendations on the public interest consideration in section 58 of the Enterprise Act 2002. This public interest consideration concerns the sufficiency of plurality of persons with control of media enterprises.

21 December 2010: The European Commission published the results of its competition inquiry into the proposed merger of BSkyB and Newscorp. They find no competition issues and clear the merger to go ahead
 
21 December 2010: Jeremy Hunt takes over responsibility for media mergers.

25 January 2011: Jeremy Hunt announced that he intended to refer the merger to the Competition Commission as he considered that it may operate against the public interest in media plurality, but that he would first consider (and ask the OFT and Ofcom for advice on) undertakings in lieu offered by News Corporation.** **

3 March 2011: Jeremy Hunt announced that, following advice from Ofcom and OFT, he intended to accept undertakings from NewsCorp in lieu of a referral to the Competition Commission. He launched a consultation on the undertakings, which would involve Sky News being ‘spun off’ as an independent public limited company.

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