Vince Cable under pressure to block Sky takeover

By Nick Clark

Tuesday 14 September 2010

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The Business Secretary Vince Cable has come under pressure from one of the UK's leading media experts to block Rupert Murdoch's attempted full takeover of pay TV group BSkyB.

Claire Enders, the founder of Enders Analysis, wrote a 20-page submission to Mr Cable last month, urging him to step in or face media plurality in Britain falling to an "unacceptably low level".

News Corporation, which owns The Times titles and already holds 39.9 per cent of Sky, made a 700p-a-share bid to take complete control of the FTSE 100 listed broadcaster in June. Sky's independent directors rejected the offer, but talks are continuing.

Ms Enders said the proposed deal needed "urgent attention" from the Government. She added that an "intervention is particularly timely as the leading positions of BSkyB on the UK TV market and of News Corp on the newspaper market will strengthen in the period to 2014."

The Conservative Party has frequently been accused of being too close to Mr Murdoch and any action by Mr Cable could cause tension within the Coalition Government.

The Government can block the deal on plurality grounds under the 2003 Communications Act. Plurality requires the British media landscape to include a significant number of broadcasters and newspapers appealing to a wide variety of tastes. The legislation was enacted, as Baroness Blackstone said, "to ensure the existence of a range of media voices, safeguarding the vibrancy of democratic debate".

News Corp already owns more media in the UK than it is allowed in the US or Australia, Ms Enders said. Buying Sky would improve its competitive edge and open "several new strategic opportunities". She fears the merged group could offer "bundled" subscription packages of Sky and The Times, putting huge pressure on the newspaper's rivals, and suggested the paper's newsroom could merge with Sky News.

Ms Enders added Mr Cable should also step in over the deal for Channel 5 by Richard Desmond's Northern Shell, which owns the Express and Star titles.

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