Culture Minister holds up News Corporation deal in UK


In the United States, media mergers generally need approval from the FCC and DOJ – and sometimes the FTC. In the United Kingdom, though, the Minister of Culture also has a say – and that’s holding up the bid by News Corporation to take its 39% ownership of British Sky Broadcasting (BSkyB) to 100%.

Jeremy Hunt, who holds the Culture post in the current cabinet, has put the deal on indefinite hold. He’s concerned about potential competitive threats to media plurality cited in a report by the government’s Office of Communications (Ofcom). But he’s giving News Corporation some time to come up with further concessions, rather than refer the proposed deal to the Competition Commission (sort of like the DOJ’s Antitrust Division) for a full review, which would take many more months.

News Corporation is, to say the least, disappointed. The deal had already received clearance from the European Commission in December.

“News Corporation continues to believe that its proposed acquisition of the shares in BSkyB it does not own will not lead to there being insufficient plurality in news provision in the UK. The company has put forward extensive and detailed evidence that the level of plurality in the UK has increased since 2003 (when the Communications Act was enacted) – and since the ITV plurality review in 2007 when no concerns were found about the sufficiency of plurality.
News Corporation believes that Ofcom’s analysis is deficient in a number of ways. While Ofcom acknowledges that the combination of News Corporation and BSkyB would have a minimal impact on consumers and would not enhance News Corporation’s ability to influence the news agenda, it nevertheless concludes that the transaction may be expected to operate against the public interest,” the company said in an announcement responding to Hunt.

“News Corporation has made a submission to the Department of Culture, Media and Sport setting out a number of issues with the Ofcom report. However, in the interests of progressing to a transaction, News Corporation has submitted an undertaking that we believe addresses Ofcom’s concerns. We will continue to engage constructively with the regulatory process,” News Corporation said.