The Staggers

The New Statesman’s rolling politics blog

Murdoch wins again

The News Corp head is now free to create a £6.4bn media giant.

By George Eaton Published 03 March 2011 11:00

The Dirty Digger has won again. Jeremy Hunt has given Rupert Murdoch the green light to buy the 61 per cent of BSkyB he does not already own.

The inevitable concession is a fairly minor one. Sky News will be "spun off" into a new company listed on the stock market, with a new board made up of a majority of independent directors. In addition, News Corp will be blocked from increasing its shareholding in the new company (currently 39.1 per cent) without permission from the Secretary of State for ten years.

For Murdoch, this is little more than an inconvenience. He has won the opportunity to create a new £6.4bn media giant, the likes of which Britain has never seen. As the graphic below shows, the revenues of a combined BSkyB and News International would dwarf those of the BBC.

Media companies by revenue

And, as former NS editor Peter Wilby notes in this week's magazine, there is nothing in the agreement to prevent Murdoch bundling up subscriptions to his newspapers with subscriptions to Sky. However, while the regulatory hurdles have been removed, the News Corp head still has to persuade BSkyB's shareholders to sell. The current offer of 700p per share is viewed as far too low, not least because BSkyB profits rose by 26 per cent to £467m in the last six months of 2010, with revenues up 15 per cent to £3.2bn. But with News Corp in rude health, largely thanks to bumper profits from its filmmaking division, Murdoch is likely to make a significantly improved offer.

Eight days short of his 80th birthday, and with one of his tabloids the subject of a police investigation, he has outplayed them all again.

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Tags: Rupert Murdoch

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18 comments

Thu, 2011-03-03 11:17 — chris8hr (not verified)

I'm not communist, however: the 'executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie' (Marx & Engels, The Communist Manifesto).

Thu, 2011-03-03 11:31 — jie4v7i14

I was afraid this would happen with our happy tories in charge of things again, selling their grannies to the highest bidder.

Oh bollocks!

Thu, 2011-03-03 11:55 — mike cobley (not verified)

Terrible news, but there is one silver lining to it - at least Murdoch and NI now makes a very easy target.

Thu, 2011-03-03 11:56 — Cakebaker (not verified)

I'd sell my granny to the highest bidder.

Thu, 2011-03-03 13:09 — Guardi (not verified)

Do you really expect anything else from this lot?

Thu, 2011-03-03 13:11 — James (not verified)

It baffles me why people maintain that we have a "free" media. All of these dodgy deals cost tens of millions of pounds.

Recently read a fine take on the matter here from Mr Bloodworth:

http://bloodworthweb.blogspot.com/2010/12/rupert-murdoch-and-free-media....

Thu, 2011-03-03 13:18 — davidk1

The situation wont change drastically: anyone who doesn't buy Murdoch's trash now wont be persuaded to in the future...there'll always be an alternative to that brand of slavish, market-worshipping gutter journalism. I hope he DOES bundle up services and puts costs up. No problem for me, it'll just hurt the dickheads who subscribe now. Job done!

Thu, 2011-03-03 13:20 — Marcus (not verified)

This is great news for the consumer. We keep on #winning

Hopefully, we will see an opening up of the UK news industry now.

I would much rather watch obviously biased news and opinion than have the sly left-leaning BBC/C4 news thrust upon me. This way we know exactly where we stand.

Thu, 2011-03-03 13:46 — Lou (not verified)

Some points raised in discussion last night and this morning

1 - If he doesn't get the right asking price for him, then he has a get out of selling clause as Sky News is financially propped up by Murdoch Inc and may not be that good a deal for a buyer. Personally I think that's what we will see happens.

2 - He chooses who he sells to therefore it's possible it will be sold to someone who reflects the Murdoch agenda

3- He retains a seat on the board so still has some say.

4 -There's an option in ten years for him to buy back some or all shares in Sky News

Thu, 2011-03-03 13:49 — Alex Jones (not verified)

Absolutely Marcus - the BBC is lousy with communists and maoist revolutionaries.
If only all British broadcasting could be as objective and principled as Fox News.

Thu, 2011-03-03 14:05 — Bill Fraser (not verified)

Question, will Sky News now become Fox News in everything but name?

Compared to Al Jazeera it is already leaning to the right, judging by its coverage of the uprising in Libya.

Thu, 2011-03-03 15:17 — Marcus (not verified)

@Alex Jones:

The key thing to remember is that we know what we are getting with Fox News. You can choose whether to watch it or not based on the evidence and view point.

It doesnt have to be right-wing. It could be left-wing like MSNBC, CNN, etc.

With the publicly funded BBC/C4 we get sly reporting and editorial bias based on the personal opinions and decisions of the reporter and production staff.

It is time we had a level playing field and its time to allow the public to decide what they want to watch.

My guess is that the left think that they will lose out in any new arrangement and that is the reason why they object so heavily.

If the public is centre-left, as many here seem to assume then that will be catered for and potentially the predominant channel.

Thu, 2011-03-03 15:36 — elrob

Marcus:
Hopefully, we will see an opening up of the UK news industry now.
---
open up? WTF!
One man getting half the UK's media, and having editorials follow his own Thought Police? Open up?

If Pravda had been run by Hitler, would you have praised its journalism?

Well done LibDems. You sought to buffer us against the instincts of riightwing Tories, and have given us an ever narrower media, and are leading us towards a priivatised NHS. What the Hell are you in politics for? Just to get electoral reform? What's the point if everyone is going to be told incessantly to vote Tory; accept neoliberalism?

Thu, 2011-03-03 15:53 — Marcus (not verified)

@elrob: Apologies, i meant to say the UK television news industry.

I suppose that in essence this is the key difference between the failed socialism and capitalism. The quality rises to the top. A true meritocracy. A true democracy.

When it comes to the news and information you want to absorb, who knows best, you or the career politician?

My bet is that you know best. My bet is that you want to decide. My bet is that you want control.

Without it, by principal you are not free.

Thu, 2011-03-03 16:19 — Rick (not verified)

So we live in a land where an organisation that has been shown to not only routinely break the law, but has also corrupted the police is awarded control of the media. How the hell are the rest of us supposed to stick to the law when blatant criminality, cynicism and corruption are so highly rewarded? This whole unedifying episode makes a mockery of the rule of law.

Thu, 2011-03-03 12:34 — richy (not verified)

How much humiliation will the Lib Dems take?
Cable clearly set out his stall against this and now Hunt has blithely waved the deal through with a meaningless little concession.

My questions are:
Will the newspaper groups now take Hunt to court on the basis that he appeared to have made his mind up
on the issue months ago (his meetings with News Corp)?

What will it take to make Cable quit?

Why did the Telegraph expose Cables conversation given their opposition to the takeover?

Fri, 2011-03-04 14:45 — Marcus (not verified)

@chris8hr: I partially accept that.

I would have a society based around merit and personal freedoms over that of one run by a committee of career politicians who deem themselves to know whats best for me, any day though.

Thu, 2011-03-03 19:37 — chris8hr (not verified)

@Marcus: you need to take a reality-check. It's not a meritocracy, its a creditocracy. Though you can earn credit, you can also be born with it. Those born with none, more often than not, cannot earn it.