Reuters closer to BSkyB

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The prospect of a link-up between Reuters and British Sky Broadcasting loomed larger last night following the weekend disclosure that the news agency and Fox Television of the US are to develop a television news service across the Atlantic. British media analysts felt the project could hasten a similar arrangement with the recently floated UK satellite broadcaster. Rupert Murdoch's News Corp, which owns Fox, retains a 40 per cent stake in BSkyB. Reuters was reported to be in talks with BSkyB last month.

Alastair Smellie, analyst at Lehman Brothers, said: "This has significant potential. Reuters have struck a good deal with a part of the Murdoch empire. This must stand it in good stead for possible other developments in that direction." A Reuters spokesman said: "We cannot comment on speculation."

The Reuters/Fox deal, for which financial terms remain secret, involves the two companies working together on a television news service for Fox-owned and operated stations, Fox affiliates and other participating stations in the US.

Reuters will provide the technical infrastructure and news-gathering expertise. Fox will provide editorial direction. The service will be based at Reuters' Washington DC bureau.

One attraction to the British company, also one of the world's biggest providers of financial information, is that it has the infrastructure already in place.