SKY OWNERSHIP UPDATE

STEVE HEWLETT 1958-2017
February 26, 2017
The BBC ANNUAL REPORT Pay, Gender, Pension Deficit
March 28, 2017

SKY OWNERSHIP UPDATE

UPDATE 17th July 2017

Photo BBC:  Rupert Murdoch when famously summoned to by the Sergeant-at-Arms to appear in front of John Whittingdale’s parliamentary Select Committee, Murdoch is known to have attended partly because he did not want to jeopardise his “fit and proper person” status.

SKY ISSUES STILL CLOUDED

Comment by Hugh Sheppard.

Those who follow the debate on whether Sky plc, including Sky News, is to be merged with US media conglomerate 21st Century Fox, will spare a thought for the Rt. Hon. Karen Bradley MP, Secretary of State of the Department for Digital, Culture, Media and Sport (DCMS).

At the end of June, she told Parliament that its broadcasting authority, Ofcom, had reported to DCMS that although ‘behaviours alleged at Fox News in the US amount to significant corporate failures … these did not, in its view, demonstrate that the merged company would lack a genuine commitment to broadcasting standards’.  She was therefore minded, she said, not to refer the bid to the Communications and Markets Authority (CMA). This meant, in effect, not revisiting the suitability of the members of the Murdoch Family Trust as full owners of Sky plc, where they currently own just 39% of the company.

Her second point was about media plurality; as to whether an American company that already controls a large proportion of newspapers and their distribution in the UK should own 100% of Sky News too. Ofcom’s report said that the deal raised significant plurality concerns, meaning that the merged company would have too many media eggs in one basket. Karen Bradley therefore told Parliament she intended to refer this to the CMA for an in-depth investigation.

However, as Secretary of State she did a bit more; a significant bit more. On media plurality, she invited 21st Century Fox to improve its guarantees for independent editorial control of Sky News and, to ensure she would be right to uphold Ofcom’s view of the commitment to British broadcasting standards, she set up a 2-week consultation period on any new evidence as to corporate suitability.

Informed commentary* suggests that while questioning Ofcom’s report, the Murdoch camp is said to be unlikely to offer any additional editorial guarantees and, with the period of consultation now closed, there can be little doubt that opponents of the merger will have wasted any time in adding to the allegations of unsuitable behaviour already tabled in Ofcom’s report.

Undoubtedly, this will delay matters, but it shows an independence of spirit that many have welcomed. Because this is a quasi-judicial matter, opinions expressed on behalf of BBCPA and by individual members, together with comments in the media, may not have the legal weight that 21st Century Fox believes will carry the day. But the eventual outcome of this tussle could be very, very important for the BBC and the future of British Broadcasting. Through their work at the BBC, the members of the Association have contributed over the years to our national broadcasting standards, widely recognised as a benchmark across the world.

Already assailed by social media, these established standards could be further undercut through a successful assault by the corporate culture of the Murdoch Family Trust if this merger goes through.

* “Murdoch shies from fast-tracking Sky bid” by Mark Sweny (the Guardian 14 July) https://www.theguardian.com/media/2017/jul/13/rupert-murdoch-will-not-offer-new-sky-deal-to-culture-secretary

17th July 2017

Addendum: more clouds on the horizon.

According to press reports, further concerns over the bid for Sky have been raised by high profile politicians.

Representing a cross-party consensus, Ed Milliband, Kenneth Clarke, Sir Vince Cable and Lord Falconer have accused Ofcom of a “serious legal error” over the bid which, they insist, must be referred to the Communications and Markets Authority (CMA).

In a letter to the Observer of Sunday 16 June Lord Puttnam and five other Members of the House of Lords express concern were ‘the UK’s largest and most sophisticated privately held domestic consumption database‘, held by Sky, to pass into foreign control. (See: http://www.davidputtnam.com/viewNews/id/524/)

For further information, also see the Guardian/Observer website:  https://www.theguardian.com/uk/media

Amor Rajan BBC Media editor writes (9 May 2017); As Ofcom explores whether Rupert Murdoch’s 21st Century Fox should be allowed to press on with its planned takeover of Sky, we thought the company might agree to an interview with the BBC. But they said no.

http://www.bbc.co.uk/news/entertainment-arts-39852404

Earlier Posting on Sky Ownership:

SKY OWNERSHIP: IS THE GOVERNMENT PUTTING OFF THE EVIL DAY?

Thanks to the election being called on 8th June, those who stay loyal to the impartial standards of BBC News have a little more breathing space before Ofcom decides if 21st Century Fox can buy the 61% of Sky plc it doesn’t already own.

This U.S. multi-media conglomerate is 39% owned by the Murdoch Family Trust; its chairman, surprise, surprise, is Rupert Murdoch, whose son, James, is the CEO as well as the chairman of Sky.  FOX News (CEO Rupert Murdoch) belongs to 21st C Fox and is the leading cable news broadcaster in America, where its motto ‘fair and balanced’ is in conflict with a reputation that is deep-rooted in populism and sexism. Such standards are thought to raise questions about the proposed Sky deal.

Ofcom has the unenviable job of deciding whether the role of Murdoch family members’ renders 21st C Fox ‘unsuitable’ as the 100% owner of SKY plc. It had said ‘No’ once before, after the phone-hacking scandal, but the Murdochs are a tad persistent. Because the decision is deemed political, Ofcom’s deadline is now 20th June.

Meanwhile, Ofcom continues to take evidence, such as that from Lisa Bloom, a lawyer who speaks for three women alleging sexual harassment at Fox News. She came here to address Ofcom, with the claim that “19th Century Fox” is not a ‘fit and proper’ company to take over all of Sky. These allegations involved the founder of Fox News, Roger Ailes, recently deposed alongside anchorman Bill O’Reilly. As Ailes has just died that may be one less case for Ofcom to take into account. This could sound cynical, but really isn’t when ‘fit and proper’ criteria are ultimately legal issues.

Others have commented similarly on the timing of the Sun losing its former editor, Kelvin MacKenzie, from the News UK stable (Murdoch-owned; CEO: Rebekah Brooks) just when ‘fit and proper’ is driving Ofcom’s considerations over Sky. Still more may believe that all was already lost last September when, on her first flying visit to New York as Prime Minister, Theresa May squeezed in a meeting with Br’er Fox in person. Now, in a ‘Warning to British broadcasters’, Andrew Neill has said ‘Even Sky’, which he described as a “brilliantly run company”, ‘looks like it is about to be acquired by Fox’.

Is this one more nail in the coffin of impartiality?  At least we’ll soon be told.

The full Andrew Neill address to the Digital TV Group Summit on 14th May is at: http://informitv.com/2017/05/14/warning-for-british-broadcasters/

Hugh Sheppard (BBCPA Committee member)

 

 

Hugh Sheppard, a former Chairman of our Association has also written to Karen Bradley, Secretary of State, DCMS, about the proposed acquisition of Sky PLC by 21st Century Fox outlining his considerable concerns and urging her to refer it to OFCOM. Although this is Hugh’s personal view it might be useful for members to read what he considers are the issues behind the headlines. The content of the letter is reproduced below:-

Dear Secretary of State,
This is a personal open letter, also to be placed on the website of the independent BBC Pensioners’ Association, of which I am a committee member and former chairman.

I was heartened to learn of your being minded to refer the proposed bid for Sky plc by 21st Century Fox to Ofcom. I was further encouraged on hearing you speak to the House of Commons on Monday, when you raised a number of important issues.

If Sky, already with an income from the UK and Ireland of more than twice the BBC’s £3.7bn p.a. from licence fees, is to become wholly under the aegis of an American multimedia company, it would show that the Government no longer regards the BBC as the ‘Voice of the Nation’. For that company to be 21st Century Fox, run on the ethics of a dynastic family, would confirm that the Government believes that commercial criteria, no matter how compromised, count for more than any principles of public service.

This should not be taken as a plea for the BBC not to face competition. Broadcasting is already losing ground to the challenge of social media at every turn. If Sky’s acquisition by 21st Century Fox were to raise the overall level of public interest in broadcasting in general, and broadcast news in particular, the BBC should readily accommodate a fellow traveller bound by the same standards of impartiality as itself. But that situation already pertains, such that a change of Sky ownership would, on the face of it, imply the same Government and Ofcom policies about news content.

What those policies won’t do is answer concerns about plurality across media platforms that UK and European legislation seeks to address. It would mean a concentration of Sky’s international, national and regional broadcasting interests being held in common ownership by Murdoch family members alongside their UK newspaper interests in the Times, the Sun and regional distribution.

Surely, the essential analysis is not so much about which entity owns what, but about who directly controls cross-media ownership, promotion and advertising.

Whether it is News UK and Sky in Britain, News Corp and Foxtel in Australia or News Corp and Fox News in America, this international behemoth cannot pretend to have any other motive at its heart than corporate self-interest.

Outstanding questions over the ‘fit and proper person’ test are legion, with phone-hacking at the forefront of UK concerns, Rebekah Brooks back again as the CEO of News UK, Leveson 2 apparently stillborn, and James Murdoch, already chairman of Sky and CEO of 21st Century Fox, backing Team Sky with its reputation so recently laid bare by the DCMS Select Committee.

This at a time when, between yourself at DCMS, Sharon White at Ofcom and Damian Collins MP at the Select Committee, the relationships of culture, media and sport seems, at last, to be properly motivated in the national interest. Now it is up to the three of you not to let the machinations of Messrs. Murdoch scupper broadcasting as we know it.

For 21st Century Fox to acquire Sky could mean the end of the very special identity British broadcasting has brought to radio, television and film-making. In any event, this would very likely bring about the end of the distinctive identity of the BBC. That this still stands high could not be better expressed than by Sharon White in closing her speech to the Oxford Media Convention earlier this week:
“The BBC is for everyone; it lies at the centre of our collective, cultural identity.”
If this can survive the present hiatus, I feel sure that a vote of confidence from members of this association will be overwhelmingly endorsed by society at large.

X