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21.03.2017

UK: Is media dinosaur trying to swallow too much prey at once?

by Jonas Rusche

Ofcom, the United Kingdom’s media regulator, is set to investigate Rupert Murdoch’s bid to buy out Sky plc. It will assess whether this would endanger news plurality in the country.

Murdoch announces bid for Sky Rupert Murdochs attempt to buy the remaining shares of Sky plc is threatening news plurality. The case is now referred to Ofcom who assess whether a merge is in the public interest or not.

The prominent media mogul announced last December that he would bid for telecommunications giant Sky plc. The bid seeks to buy the remaining 61 percent of shares the even more gigantic conglomerate 21st Century Fox does not yet own. This would make the family media business perfect as James Murdoch, chief executive of Fox and already chairman of Sky would be heading the merged media giant alongside his father’s enterprise News Corp.

The European Commission (EC) was officially notified of these intentions on 3 March. The Guardian reported on 16 March that Karen Bradley, Secretary of State for Culture, Media and Sport, has meanwhile decided to have Ofcom conduct an investigation on public interest grounds.

Her decision was based on two principles: media plurality and commitment to broadcasting standards. Part of the considerations rest on whether the Murdoch family would be “fit and proper” owners, given prior scandals (i.e. phone hacking of sources) involving their news organisations.

Ofcom has until 16 May – 40 days from the start date – to finalise their report judging if the proposed merger would run counter to these two public interests. The public can submit comments until 30 March via instructions on Ofcom’s website.

Is news plurality alive in the UK?

One argument Murdoch and others have brought in favour of merging the two media companies, after a first failed attempt in 2010, is the tendency of consumers to multi-source their information in the digital age. A joint report by the Media Reform Coalition and Avaaz, entitled “Consolidating Control: The Fox/Sky merger and news plurality in the UK”, states that data proves this to be false.

In recent years, there has rather been a trend towards consuming news from fewer outlets than more. Whilst plurality in news overall in the UK is relatively stable, more and more readers consume their news through social media – which results into less exposure to different news outlets.

The report states that the incorporation of Sky Plc. “will result in the merged entity being the only news and media provider present on all four media platforms” and that “the merged entity will effectively become the largest newspaper provider, the third largest TV news provider, the second largest provider of radio news content and the fourth largest online news provider.”

This does not come as a surprise. Data in the report suggests that rather than decreasing in its reach, which is true for its print sales, News Corp made up for its slight losses by a substantial increase of its online format “The Sun”. At the same time, Sky is the single biggest contributor to the Yahoo online news page, “itself one of the leading online news websites.” If the merge between the two companies was stopped on the grounds of plurality in 2010, it would be ludicrous to allow it now.

In a functioning democracy, media are the fourth power, fact checking, monitoring and holding the people in power accountable. This essential function might be compromised if the possibly soon biggest news outlet in the UK has very close relations to the government it is supposed to report about. Media Reform Coalition and 38 Degrees investigated how often representatives from both sides met. They found that “between April 2015 and September 2016, senior News Corp executives met with government ministers or their special advisers on 22 separate occasions.” Rupert Murdoch, the chairman himself, met with high-level government officials at least eight times in person.

Reactions to the proposed merger

The media community is worried that the bid by Murdoch could have big adverse impacts on a Europe-wide scale. The ECPMF joins concerned voices, fearing that a single private company will have substantial control of all media sectors in the United Kingdom.

As media freedom is based on the basic principle of plurality, this deal, if authorized, poses an existential threat to one of the cornerstones of democracy.

The National Union of Journalists (NUJ) similarly commented on the planned merger to Bradley and the European Commission. The statement was made available to the ECPMF:

The central role of the media in a democracy and the potential consequences of concentration of ownership mean that business transactions involving media organisations must be treated differently to other sales.”

The NUJ argues that it is highly questionable whether Murdoch and his family are “fit and proper” owners.  It notes that the last attempt in 2010 by Murdoch to integrate Sky into his media network failed due to an “unfolding scandal of dubious workplace practices at Murdoch’s News of the World, along with the public campaign of opposition”. Had the deal gone through at the time, Murdoch would have had the possibility to control media reach to 52 percent of the UK adult population.






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