UK (sort of) backs News Corp’s buyout of BSkyB

3 Mar 2011

The British government accepted today News Corp’s plans to buy full control of British Sky Broadcasting, on one condition: that it spin off its Sky News channel as an independent company.

Culture Secretary Jeremy Hunt cleared the plan for the takeover, which is still subject to consultation before receiving final approval. News Corp would then be free to make an offer for remaining BSkyB shares.

News Corp would still retain a 39.1pc stake in the news channel as part of the deal, the same as its current stake in BSkyB.

BSkyB’s profits amounted to stg£407m in the last half of 2010.

The deal, however, concerns some politicians and media critics, as News Corp CEO Rupert Murdoch already owns The Sun, The Times, The Sunday Times and The News of the World newspapers.

A coalition of British media players – the BBC among them – is demanding an inquiry by Britain’s Competition Commission, expressing concerns about its impact, as well as indicating it would seek to block the proposal. The group said the proposal did nothing to address concerns that News Corp would restrict or distort competition.

Hunt said he he would consult on the plans until 21 March before making a final decision.