Seeing the writing on the wall that a vote in Parliament on Wednesday was likely to block its bid for Sky, News Corp has ‘tried to take the politics out of the bid’ and has unilaterally withdrawn its negotiated commitments to spin-off Sky News and has accepted this will mean a referral to the Competition Commission to reassess whether there are competition and media plurality concerns. Minutes after the withdrawal, Jeremy Hunt, the minister responsible, confirmed in the House the bid would be referred.
He said the Commission will consider the bid taking into account recent developments.
This is exactly what News Corp originally wanted to avoid but now recognises its bid is as toxic for politicians as The News Of The World had become for advertisers. Now it hopes the months that will doubtless elapse before a conclusion along with the reduction in its market share through the closure of the NoW might still see the bid through.
However, this still requires an optimistic view in terms of further revelations, the findings of two inquiries – into phone hacking and police corruption, and that Ofcom won’t decide, in any event, to apply a fit and proper person test.
Culture Secretary Jeremy Hunt had written to Ofcom earlier asking if it has any ‘additional concerns’ on the News/Sky deal as Rupert Murdoch arrives in London to take charge of the phone hacking crisis at News International.
Tellingly, Hunt specifically asked if they believe in the “credibility, sustainability or practicalities of the undertakings offered by News Corporation”. In other words ‘can we trust these people’ in light of what has emerged in the last week.
BSkyB’s shareprice sank 7 per cent to below the 700p value of News Corp’s original bid. The City consensus is that the Government is now desperately seeking any legal and plausible way to stop the deal and that it won’t go ahead in the foreseeable future.
Over the weekend, Ed Miliband, Opposition Leader, said: “…[the Government] has got to understand that when the public have seen the disgusting revelations that we have seen this week, the idea that this organisation, which engaged in these terrible practices, should be allowed to take over BSkyB, to get that 100 per cent stake, without the criminal investigation having been completed and on the basis of assurances from that self-same organisation – frankly that just won’t wash with the public.”
And Conservative Cabinet member Philip Hammond said he was “concerned” by the BSkyB deal, telling Sky News: “I understand people would be very concerned [if the BSkyB takeover went through while criminal investigations were ongoing] and I think many of us would be very concerned.”