With another Murdoch bid for Sky on the cards, we examine the implications for media plurality in the UK.
Media plurality is no longer the buzzword of political debate that it was in 2011. There are no more Parliamentary committee hearings and extraordinary sessions of the House of Commons, and the Leveson Inquiry is a thing of the past. The man who tried to build a reputation for brave leadership in his opposition to the Murdochs, Ed Miliband, led his party to a resounding defeat in May. The Labour Party had committed, in its manifesto, to a stricter media plurality regime, but its defeat at the General Election means that such reforms are off the table. While political debate has moved on, the media landscape in the UK and more widely may still change significantly. Media research house Enders Analysis has suggested in an extensive review that 21st Century Fox (21CF) is likely to bid again for BskyB, in which it still holds a 39% stake.
All three Sky pay-TV businesses in Europe, BskyB, Sky Deutschland, and Sky Italia, were combined into a single company last year, which announced its intention to change its name to Sky. 21CF has strong commercial reasons to take a controlling interest in the amalgamated business – a new bid would present an opportunity to squeeze out rivals Vodafone and Vivendi, who have shown interest in increasing their shares in the firm and to establish a greater global presence for 21CF. Moreover, it would allow 21CF to control the largest customer for US TV shows in Europe and provide a platform for the company to expand its US TV channels, particularly Fox, internationally.
21st Century Fox are not the only ones who may move in the UK media landscape. Last week, it was announced that the Pearson Group was selling the Financial Times Group to Nikkei, the largest media company in Japan, for £844 million. These developments indicate that even as political interest in media plurality have faded, the industry is changing, with particular implications for news.
Foreign ownership of news outlets in the UK will increase if both changes go through, and it is not clear if Ofcom, the regulator, or John Whittingdale, the new Secretary of State for Culture, Media, and Sport, will take a view on this. Nikkei perhaps sensed that it should head off unease in the area, given the earlier controversy over the BskyB bid in the wake of the phone-hacking scandal. Chief Executive Tsuneo Kita commented that ‘Our motto of providing high-quality reporting on economic and other news, while maintaining fairness and impartiality, is very close to that of the FT. We share the same journalistic values.’
The Japanese company’s declaration will remind observers of the anger felt at the Times’ (and in the US, the Wall Street Journal’s) transformation under Rupert Murdoch. Many people would have the same concerns over Fox control of Sky News, given its importance to UK broadcast news consumption and the American channel’s dubious reputation for reliable, factual, and unbiased reporting. This would be especially important given that the BBC has indicated that its new funding settlement may mean it moves BBC News online, leaving Sky as the only 24-hour offering in the country.
Enders Analysis has argued that the Secretary of State would issue a Public Interest Intervention Notice if 21CF bid to take over Sky in full. John Whittingdale could issue such a notice if he thought a Fox takeover would endanger ‘sufficient plurality’ in media ownership, not support ‘a wide range of broadcasting of high quality’ or if Fox did not display a ‘genuine commitment to broadcasting standards’.
Although grounds may exist for concern, the political landscape suggests that without a vigorous campaign against the bid, it would go through. The Conservatives, now in Government alone, have shown little interest in changing the regulations overseeing private sector media companies. Whittingdale did call on Rupert Murdoch to withdraw the BskyB bid in 2011, but only because he thought atmosphere had become so ‘poisoned’ over phone-hacking that it was ‘probably against the interests of the company to proceed’. The poisoned atmosphere has found an antidote in time, and the Murdochs again have the confidence and commercial interest to proceed.
The Government has shifted its attentions to the public-sector broadcaster, the BBC. The Chancellor George Osborne has questioned the impressive range of programme the BBC produced. He suggested it had become ‘imperial’ in its ambitions and would squeeze out other media outlets as print circulation declined and online offerings became more important.
Lord Patten, former Chair of the BBC Trust, has accused Whittingdale of being ideologically committed to a smaller BBC. This suggests that the Government is concerned about media plurality in one sense, but is unprepared to intervene in the private sector. Indeed, Whittingdale said when Sharon White was made the new head of Ofcom in December 2014 that ‘there are some huge questions ahead […] the issue of media plurality might come back and the BBC and charter renewal’.
Patten has claimed that Whittingdale ‘follows a sort of News International line’. How the Government reacts to international media ownership changes and presses reforms to the BBC will test that assertion. These developments will profoundly change the media landscape in the UK, and the shape of news coverage. The shifts currently underway suggests that there is a need for greater focus from regulators, politicians, and the public on an issue which slipped down the political agenda, but remains very much alive.