Stephen Glover: Should Murdoch be granted all of BSkyB?

Media Studies: I can't see a commercial case for blocking this deal, but I can, paradoxically, see a political one

Monday 27 September 2010 00:00
Rupert Murdoch has become a hate figure for the Left again.
Rupert Murdoch has become a hate figure for the Left again.

Rupert Murdoch has become a hate figure for the Left again. In the long years of his loyal support for New Labour, only the real Left bothered about him. Now that his papers have switched their support to the Tories, Mr Murdoch has once more become persona non grata on the soft Left and in most progressive circles.

The issue galvanising his opponents is Murdoch's proposed takeover of BSkyB. This group includes The Guardian, The Observer, The Financial Times, Will Hutton, Lord Puttnam, a media analyst called Claire Enders and just about every right-thinking person from Land's End to John o'Groats. These people drew much encouragement from Vince Cable's assault last week on monopolistic capitalism. It is Mr Cable who will soon decide whether or not to refer the takeover to Ofcom.

Mr Murdoch's critics have a point, of course. But much of the opposition is driven by atavistic hatreds rather than rational thinking. It is said that ownership of BSkyB would give the media mogul dominant power. There has been colourful, if somewhat wild, talk of a "Berlusconi moment". But no one has properly explained how owning the satellite broadcasting company would give more power to Mr Murdoch than he already enjoys by controlling it.

He has controlled BSkyB since he merged Sky TV with its failing satellite competitor BSB in 1990. The losses of Sky had nearly finished Rupert Murdoch off, and the new company was a highly risky proposition. He installed a tough Australian called Sam Chisholm as chief executive, and by March 1992 BSkyB was making an operating profit. In May of that year it signed an exclusive pay-TV deal with the Premier League which has transformed English football. BSkyB has been shaped and run by Murdoch and his lieutenants. His son James is its current executive chairman.

Why, then, does Rupert want to increase his holding from a controlling 38 per cent to 100 per cent? The obvious answer is that he would make a lot more money. BSkyB is generating fabulous profits which are likely to increase over the coming years. Better to have all of those rather than just over a third.

Mr Murdoch's critics say there is more to it than that. They speak of "bundles" which would force advertisers to buy advertising in the Murdoch-owned Sun and BSkyB at the same time. (Actually, conditional advertising is illegal.) They suggest that BSkyB subscribers might be offered online versions of The Sun and the Murdoch-owned Times which could greatly increase the reach of those papers. (They are nearly 10 million BSkyB subscribers.) Various other tie-ups between the satellite broadcaster and Murdoch's national newspapers are mooted.

Yet no one has explained to my satisfaction why Murdoch could not do these things at the moment if he wanted to. Why should there be any practical distinction between controlling BSkyB and owning it? After all, Rupert Murdoch does not own News Corp, the media conglomerate referred to as "the Murdoch Empire". He and his family speak for some 30 per cent of News Corps shares, and yet Mr Murdoch controls and runs the company almost as though it were his own. Why should BSkyB be any different?

You will see I am sceptical about the arguments – or perhaps I should say the absence of them – put forward by Rupert Murdoch's critics. Of course his media interests are already powerful in this country, almost certainly too much so, but it is not at all clear how acquiring the whole of BSkyB is going to make much, if any, difference. Remember, too, that Mr Murdoch is 80 next March, and not immortal. I should be surprised if his successor, presumably James, who unlike his father is not a proper newspaperman, wanted to retain The Times and The Sunday Times, which in the year to March 2010 lost an amazing £87.8 million.

I can't see a commercial case for blocking this deal. (It will also be considered by EU authorities, who are thought unlikely to oppose it on competition grounds.) But I can, paradoxically, see a political case. There is a widespread, possibly false, suspicion that David Cameron made a Faustian pact with Rupert Murdoch dating back to August 2008. Mr Cameron had striven to win the support of James, but Rupert, who had a soft spot for Gordon Brown, as he had had for Tony Blair, was for a long time resistant. In the end, of course, the Murdoch Press dumped Mr Brown in September 2009, and embraced the Tories with the same fervour it had once shown for New Labour.

Some people have suggested that Vince Cable – not a natural admirer of Rupert Murdoch's, and now a declared enemy of monopolistic capitalism – might instinctively wish to refer the takeover to Ofcom, but is being leant on by Mr Cameron. The Prime Minister may feel that the Government has to honour a pact with the media tycoon.

But the best way of showing that there was, in fact, no pact – or, if there was, that it has been disavowed – would be to make a referral. It need not necessarily lead to the takeover being blocked. It would triumphantly establish David Cameron's, and the Coalition's, independence. No referral, and the Prime Minister will be dogged for ever with accusations that a dirty deal was done between him and a foreign-based media tycoon.

Double vision for Ed

The right-wing Sunday Telegraph is not the first place one would have expected Ed Miliband to set up his stall, but he penned an article for the paper yesterday in which he promised the Labour Party would be on the side of the "squeezed middle". We can be sure this article was procured by Patrick Hennessy, The Sunday's Telegraph's Brownite, and now presumably Milibandite, political editor.

Mr Hennessy's journalistic hunting partner is Brownite Vincent Moss of the Sunday Mirror. They shared an exclusive of the Queen's Speech in May, as I mentioned. So it was no surprise to find Ed Miliband writing a second, not dissimilar article yesterday for the Labour-supporting Sunday Mirror in which he emphasised his support for those who "work hard and play by the rules".

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