Thursday, June 30, 2011

Empty promises? The Sky News requirements imposed on News Corp

The extra undertakings demanded by culture secretary Jeremy Hunt ? subject to a consultation exercise ending on 8 July

Requirement News Corporation has been told that in order to take full control of BSkyB, Sky News must be spun off into an independent, publicly listed company to allay plurality fears. News Corporation will hold a 39% stake in Sky News but is not allowed to control more than 50% of voting shares. Existing Sky shareholders will take stakes in the same proportions as their investment in the satellite broadcaster.

Verdict The deal is designed to ensure Sky News has "editorial, governance, commercial and financial" independence, but critics argue that with a 39% stake, News Corporation will still have effective control over the new entity as it currently does BSkyB.

Requirement The majority of directors of Sky News must be independent.

Verdict The addition of the requirement for a non-Murdoch chairman ? which News Corporation initially opposed ? and beefing up editorial expertise at board level is designed to block News Corporation's perceived ability to sidestep legal agreements to secure independence, as occurred following the acquisition of the Times and the Wall Street Journal. Should help safeguard Sky News's independence.

Requirement The Sky News brand will be licensed for 14 years, with an option for three further years, and the channel will be guaranteed a slot on the electronic programme guide "no worse" than its current position. In addition Hunt will sign off on a 10-year TV carriage agreement and a 15-year land-lease agreement on Sky News's current location. BSkyB will also use its TV ad sales muscle to sell advertising and sponsorship for Sky News for "up to" three years.

Verdict Attempt to ensure that Sky News continues to be supported by BSkyB and might be seen by potential investors as having an economically viable future. Unclear, though, if Sky News is an independently viable business.

Requirement A monitoring trustee will report every four weeks to ensure NewsCorp abides by the undertakings.

Verdict Modest concession, depends on character of trustee.


guardian.co.uk © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds


Source: http://www.guardian.co.uk/media/2011/jun/30/requirements-imposed-on-news-corp

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