Pass the vegetables
January 19, 2011
Jeremy Hunt has, by his own admission, ‘a very hot potato’ to handle with his choice of whether to refer News Corp’s bid for the outstanding shares in Sky to the Competition Commission. He will soon pass on the super heated vegetable, and all the signs are he’ll throw it to the Commission to decide whether Sky owned by News Corp will present a plurality problem for UK media.
This will either delay a green light for the deal by six months, or take six months or so to make a negative decision. Either way, as, again, Hunt admits himself, there is almost bound to be a legal challenge by whichever side comes out on the wrong end of the Commission’s decision.
It is a little confusing that the decision on plurality, not on competition, is to be decided by the UK Competition Commission – commercial competition issues belong to the EU, which has already decided the risks in the deal are not high enough to prevent it.
So the Commission’s decision will be in the context of deciding whether the pressure put on the competition by the new combined power of a Sky / News International newspapers conglomerate will force out of business, or at least potentially fatally damage, significant competitors and, thereby, reduce media plurality in the UK.
Competitor concerns appear to focus on the cost side benefits – Sky and the newspapers combining their newsrooms for instance, and the cross-promotional benefits; tying together subs to TV and News newspapers, particularly as those newspapers become increasingly multi-media.
Will News/Sky have major benefits on costs? It seems unlikely – they haven’t completely integrated their Sunday and Daily newspaper operations yet (unlike some of their opposition), so there seems little appetite for crow-barring different operations together just for marginal cost savings.
And combined promotional clout? Some might say ‘all hail’ anything that can save any part of the newspaper industry, which some will tell you is a dead man walking anyway. It is significant that, notwithstanding the Sky deal, Murdoch’s papers are alone in having the guts to face the bleak fact that newspapers have almost committed suicide by habituating readers to free journalism, and they have erected pay walls in the UK and the US to try and stem the tide.
I hadn’t noticed any lack of Sky promotion in News newspapers up to now (which reinforces the ‘I thought News already owned Sky, how will I tell the difference argument?). If they do begin to tie together subscriptions – ISP, TV, pay-TV, VoD, voice, ‘newspaper’, – to the clear detriment of competitors then it is the regulators job, at that time, to step in. The fact that regulators in broadcasting – particularly in the context of the schizophrenic regulation of the BBC – and newspapers have proved routinely inadequate is not News’s fault.
The other major concern – which it is hard to see the Competition Commission being able to take a view on – is the Foxification of Sky News. Anyone who has seen Fox News, particularly if they’ve not had the opportunity to shower straight afterwards, will share this concern. But it is hard to see Murdoch trading the influence that a respected Sky News brings for the madness of Fox which, you’d like to think, wouldn’t play well in Europe anyway.
And, if he did go Foxing mad, wouldn’t that mean a gap for another player? Truth is, probably not – Sky News can only exist because of the rest of Sky – the BBC’s domination of competition in TV news (and much else) sees to that. But that’s another story.
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