News Corp. appears to have path to buy BSkyB

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The UK’s Secretary for Culture, Olympics, Media and Sport, Jeremy Hunt, has indicated he’ll accept a compromise that would have him lift his hold and allow News Corporation to acquire the 61% of British Sky Broadcasting (BSkyB) that it doesn’t already own.


The deal that’s been struck will have Sky News spun off as a separate public company. News Corp. will hold 39% of that new company, just as it now does for all of BSkyB. Sky News will be a “distinct media enterprise with a majority of independent directors,” News Corp. said in announcing the agreement with Hunt.

“While News Corporation continues to believe that the proposed acquisition of the shares in BSkyB that it does not already own will not result in insufficient plurality for any audience in the UK, it has submitted this comprehensive proposal in order to avoid a lengthy and costly review by the Competition Commission,” the company said.

Under the agreement, BSkyB will enter into a 10-year carriage agreement with Sky News to ensure that the 24/7 satellite news channel has a “substantial long-term revenue stream.”

Not everyone is happy with the settlement. The Telegraph newspaper reported that several Members of Parliament denounced the agreement and charged that News Corp. CEO Rupert Murdoch will still have too much influence over the UK media landscape. A group of rival media companies denounced the deal as “pure window-dressing.”

RBR-TVBR observation: What remains now is for Murdoch to convince BSkyB shareholders as well. They already turned down his offer of 700 pence per share, which was around $12.7 billion total, and are believed to be seeking at least 850 pence, or $14.6 billion. Money talks.