UK Media Plurality At Heart Of Ofcom £11.7bn Murdoch Bid Investigation

By Gabriel Princewill-

The investigation will ultimately assess whether  control of news output in the UK, and whether the Murdoch family are “fit and proper” owners following the phone-hacking scandal.

The culture secretary, Karen Bradley, has referred 21st Century Fox’s bid to buy the 61% of Sky it does not already own to Ofcom to investigate potential public interest issues on two grounds.

The investigation comes in the wake of over 700 representations about the deal from third parties, ”the vast majority of which supported intervention”, The culture secretary, Karen Bradley said. Bradley, who referred 21st century Fox’s bid to buy 61% of Sky it does not already own, confirmed the decision in a statement to MPs in the Commons on Thursday.

Ofcom has until the 16th of May to report back to Bradley on the public interest concerns, and will kick off its own concurrent review of whether Fox is “fit and proper” to take control of Sky’s broadcasting licence.

Bradley told MPs she had issued a European intervention notice on the grounds of “media plurality and commitment to broadcasting standards” linked to the bid from Murdoch’s company.

 Ofcom will look at whether Fox’s takeover will raise issues of UK media plurality and concentration in Murdoch’s control. The deal will give him full control of Sky News, as well as the Times, Sunday Times and Sun newspapers, and the radio group TalkSport, through a separate company News Corp.

The second issue is whether Fox is committed to the required editorial standards, such as accuracy and impartial news coverage.

In parliament, Tom Watson, shadow culture secretary, questioned whether Bradley’s referral on broadcasting standards grounds would give Ofcom the power to investigate issues including phone hacking and corporate governance failures

Shadow culture secretary, Tom Watson and fellow Labour MP Ed Milliband, have questioned whether Ofcom’s 40-day time limit is long enough to conduct a “fit and proper” review.

Miliband posited the view that Ofcom may need longer to conduct the stated fit and proper review by alluding to the longer duration of time the independent regulator needed to investigate Murdoch’s last aborted bid for full control of Sky in 2010. The former Labour leader pointed out that the last investigation took many months.

In parliament today, he asked “can Bradley assure us that if during this period Ofcom seek more time or powers she will grant that request?”

Watson stated: “A comprehensive ‘fit and proper’ test will take time, so that all of the Murdochs’ failures of corporate governance during the phone-hacking scandal and elsewhere can be properly investigated.”

The culture secretary said Ofcom have assured her they have the time and powers they need. She also rejected calls for the fit and proper test to be made a standard part of the public interest criteria in the Enterprise Act, and not sit with Ofcom.

“I did very carefully consider the representations made,” she said. “It is important an independent regulator looks at ‘fit and proper’ and the government has grounds to intervene under the Enterprise Act. Those two have to be kept separate and we should not see government stepping into where the regulator should quite rightly sit.”

 Murdoch’s detractors want the bid blocked and rival broadcasters are schedulled to lodge complaints and make representations in the UK and Europe. The European commission is also scrutinizing the deal , following concerns that a Fox/Sky combination will marginalise legitimate competitors.

Ofcom has in the past published a damning indictment of Rupert Murdoch’s son- James Murdoch – who was at the time the chief executive of his father’s UK newspaper group and chairman of Sky. The independent regulator found that James Murdoch’s conduct repeatedly fell short of the standards expected. James eventually stood down as chairman of Sky and quit the UK newspaper business to run Fox, the film and TV operation, from the US.

However, Ruert Murdoch regrouped his publishing and Newspaper assets into a separate company, News Corp, and film and TV into 21st Century Fox with independent boards.

James Murdoch was reappointed last year as chairman of Sky. In October, he had to rely on the support of Fox, Sky’s largest shareholder, to win approval for his return after more than 50% of independent shareholders voted against his reappointment. The Murdoch’s eventually agreed to a deal in order to address concerns about media plurality. Critics are cynical about their motives, and believe that the overall prominent ownership of newspaper and tv assets in the UK gives them too much control over UK news media.