Opponents of News Corp's bid for full control of BSkyB who think the referral of the deal yesterday to the Competition Commission is a potential game-winner ought not to be complacent. The referral does mean the Murdochs will have to wait even longer to get their paws on Sky, but it is not clear the referral adds to the likelihood of the deal being blocked.
That's because the Competition Commission's task will be, like Ofcom before it, to ponder the threat posed by this deal to media plurality. News Corp said yesterday it believed it would pass such a test with flying colours. No wonder it is confident – Ofcom has cleared the deal once already on the plurality test.
Moreover, for all the outrage of the allegations against News Corp newspapers, it is difficult to make the case that they are material to the plurality debate. They matter much more, of course, to the question of whether News Corp is a "fit and proper owner" of Sky, but the standard of proof on that test is remarkably high.
Nor should opponents of the deal get hung up once again on the issue of Sky News. That was always a red herring – not least because the UK broadcasting regulations would prevent a "Fox-ification" of Sky News – which helped News Corp distract attention from bigger worries.
The task, then, is to persuade the Competition Commission to take a different view on plurality. That case has not been made as strongly as necessary, at least not since details of the News Corp bid first emerged, despite it representing the best hope of a regulatory intervention.
It is worth reminding people that News Corp is able to bid for Sky only because our outdated broadcasting laws do not cover pay TV. A bid for ITV, by contrast, would contravene regulation framed before the advent of pay TV that prohibits this sort of cross-media ownership. Yet on revenues at least, Sky is now considerably bigger than ITV.
What would News Corp do with the hugely cash-generative business that Sky has become? It would be peculiar if it did not look at bundling, for example – selling online subscriptions to its newspapers on the back of its television, telephone and broadband deals. That would give it a huge edge over newspaper-only rivals. Newsroom integration is also possible, as would be a string of other initiatives made possible by Sky's wealth and its reach.
This is Rupert Murdoch's modus operandi. His newspaper empire was built on aggressive price cutting and cross-subsidies between publications. That the takeover of Sky would offer new opportunities for such strategies certainly represents a threat to media plurality – this is the case that must be made to the Competition Commission.Reuse content