Communications regulator Ofcom has sent a report examining the possible effects of a proposed acquisition of BskyB by media mogul Rupert Murdoch’s News Corp. The proposed $12 billion (£7.7 billion) takeover may harm competition by creating a behemoth with too much leverage to influence public opinion.
Murdoch wishes to acquire 61 percent of BskyB – a company he had helped to build and grow; in an effort to consolidate his business in the UK. However, rivals fear that the acquisition will give too much leverage to mould public opinion.
Taking cognizance of rival’s apprehension, the government had referred the matter to Ofcom seeking their opinion if the deal needs to be referred to Britain’s Competition Commission.
A statement issued by Ofcom said: “Ofcom can confirm that it has submitted its report into the public interest considerations to the Secretary of State for Culture, Media and Sport”, without divulging any further detail.
Murdoch’s News Corp. said it “remains confident that its proposed investment in BSkyB will not adversely affect media plurality in the Britain and is committed to continuing to engage with the regulatory process”.
Lawyers and analysts expect Ofcom to refer the matter to Culture Secretary Jeremy Hunt who’ll eventually agree to the deal. A spokesman for Department of Culture, Media and Sport (DCMS) said Mr. Hunt is expected to give his opinion by the end of January and the DCMS will publicize the Ofcom report simultaneously.
The proposal has generated serious debate and other media groups like the BBC have already lodged their protests. News Corp. owns the newspaper ‘The Times’ and the bestselling tabloid ‘The Sun’; both of which had lent support to David Cameron during the parliamentary elections.
An inordinate delay may potentially push up the deal price.
Ofcom investigated the case on media plurality grounds. The European Union has already approved the deal after being satisfied that the merger will not affect competition.