News Corp. Gets Provisional Approval for BSkyB Takeover

LONDON: The U.K.’s Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, has given provisional approval to News Corporation’s takeover of BSkyB, conditioned on the spin-off of Sky News.

Hunt has accepted News Corp.’s proposal for Sky News to be spun off as an independent publicly traded company. News Corp. would retain a 39-percent stake in the network. "This will preserve Sky News as a distinct media enterprise with a majority of independent directors," News Corp. said in a statement.

BSkyB—in which News Corp. currently holds a 39-percent interest—will enter into a ten-year carriage deal with the new Sky News, as well as license the brand and provide facilities and support services "on arms-length terms." Moreover, News Corp. would not be allowed to increase its shareholding in Sky News without permission from the Secretary of State for 10 years.

The British government has initiated a public consultation on the takeover, with opinions on the impact of the merger on media plurality and news provision—given News Corp.’s dominance in the U.K.’s print media sector—due March 21. Hunt will then make his final decision on the proposed takever, which has already gained the approval of the European Commission.

Hunt said in a statement, “I am consulting on proposed undertakings from News Corporation. Informed by advice from the regulators, I believe that these will address concerns about media plurality should the proposed News Corporation/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 Corporation than it currently has."

He continued, "Throughout this process I have been very aware of the potential controversy surrounding this merger. Nothing is more precious to me than the free and independent press for which this country is famous the world over.  In order to reassure the public about the way this decision has been taken I have sought and published independent advice at every step of the way, even when not required to do so by law. And I have followed that independent advice.”