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Cable and Murdoch: it’s war

Expect Murdoch and his henchmen to unleash the forces of hell on the Business Secretary.

In a remarkable demonstration of his independence from David Cameron, Vince Cable has just referred Rupert Murdoch's BSkyB bid to Ofcom on grounds of plurality. Following News International's full-throated support for the Conservatives, Murdoch had hoped that the deal would be nodded through, but he didn't reckon with Cable.

Ofcom will now be required to investigate the bid and report back by 31 December.

The takeover bid has split the cabinet along party lines, and Tory ministers are said to be relaxed about the deal. But the speed with which the Business Secretary has acted (BSkyB officially notified the European Commission of the takeover bid on Wednesday) suggests that he's fully aware of the threat to media plurality.

As Mark Thompson recently argued in his impressive MacTaggart Lecture, Murdoch's bid, if successful, would lead to a "concentration of cross-media ownership" that would be unacceptable in the United States or Australia.

As the owner of the Sun, the News of the World, the Times and the Sunday Times, Murdoch already controls 37.3 per cent of UK newspaper circulation and, based on revenue, Sky is now the country's largest broadcaster, with an annual income of £5.4bn. If successful, News Corp's bid for the 60.9 per cent of BSkyB that it does not own at present would have disastrous consequences for media plurality.

Once the deal is complete, we can expect Murdoch to bundle his newspapers with Sky subscriptions in an attempt to offset falling circulation. As the media analyst Claire Enders has predicted, by the middle of this decade, the News Corp head could control 50 per cent of the newspaper and television markets, a concentration of ownership that would make even Silvio Berlusconi blush.

That Murdoch has a history of editorial intervention is not strictly relevant: it would be undesirable for any individual or company, however benevolent, to achieve such power. But it certainly raises the stakes.

Following its eight week public-interest assessment, Ofcom is likely to recommend a full investigation by the Competition Commission – something that could block the deal altogether. In the meantime, expect Murdoch and his henchmen to unleash the forces of hell against Cable.