Thursday sees the announcement of half-year results from BSkyB. There may be a slight dent in its relentless profitability following recent competition from BT for Premier League rights, but there’s unlikely to be a major deviation from the last full-year results: annual revenues of £7.2billion with an annual operating profit of £1.3billion. One and a third billion is an awful lot of spare cash to be generating each year.
That was precisely why Rupert Murdoch, who still owns just 39% of BSkyB, was desperate for his 2010 News Corp bid for the whole company to succeed, until it was finally derailed in July 2011 by the Milly Dowler phone hacking revelations and subsequent Leveson Inquiry. While in previous years his UK newspapers were the company cash cow, they have been increasingly overshadowed by the sports-driven pay TV business of Sky. Unfortunately for Murdoch, only 39% of that £1.3billion belongs to him.
According to the Daily Telegraph, he may be lining up a new bid and “the move makes more strategic sense now than it did in 2010”. Any bid would now come from his new 21st Century Fox business, created when he split the film and TV business from his publishing interests (still called News Corp) in the wake of the phone-hacking scandal. But in media ownership terms, Murdoch chairs both companies and the end result would be no different from the highly profitable and enormously powerful conglomerate which was eventually sidelined in 2011.
There is in some circles an increasingly relaxed view of a new Murdoch bid: a sense that, with the emergence of global social media and online giants like Google, Facebook and Amazon, anxiety over an expanded Murdoch empire would be yesterday’s problem. This is misguided. A wholly Murdoch-owned BSkyB would still mean that a single media enterprise – and ultimately one individual – controlled over a third of national newspaper circulation (and their associated websites) in the UK and the only commercial 24 hour UK news channel – which in turn supplies the news for Channel Five and almost every commercial radio station in Britain.
Apart from the news plurality issue, a new takeover bid would raise other issues. A unified corporate culture can determine editorial direction across a range of media outputs beyond news, including drama and comedy. Moreover News Corp, like all media conglomerates, are adept at exploiting their media outlets to promote their own products and ignore or disparage those of their rivals. A wholly owned Sky will give Murdoch more leverage for cross-promotion across his empire, thereby entrenching his competitive advantage and further reducing the number of alternative voices.
And apart from influence over editorial content, there’s the scope for consolidating power by putting undue pressure on regulators. Sky has already shown a healthy appetite for expensive litigation, draining the resources of regulators and competitors. Allied with strident editorial assaults on Ofcom in News Corp newspapers, this can create formidable barriers to public interest interventions which reinforces an unfair competitive advantage in the battle for rights and talent.
All of these fears about the potential consequences for unhealthy dominance of the newly merged conglomerate were rehearsed in the months before the News Corp bid fell victim to the phone-hacking scandal. It was, however, on the verge of going through and the lengthy process exposed serious flaws in the UK’s regulatory regime around media plurality. As ministers and prime-ministers past and present explained during the Leveson hearings, politicians became too enmeshed in the Murdoch empire and were given too much discretion in determining the outcome of such bids. If a second bid is also to be thwarted – which the public interest surely demands – that plurality regime must be overhauled.
Next Tuesday sees publication of the long-awaited report by the influential House of Lords Communications committee on media plurality. It will, I hope, propose a number of recommendations for reforming the media plurality public interest test, which was a last minute addition to the 2003 Communications Act (courtesy of some nimble political footwork from David Puttnam in the House of Lords). Without it, the Murdoch takeover would have been waved through.
But now the plurality regime urgently needs updating to embrace a broader view of plurality and media power than just news. Moreover, a new framework needs to re-engineer the complicated sequence of interventions which currently can only start and end with the Secretary of State. If we have learnt anything from the phone-hacking scandal and the relationship between politicians and the press, it is that powerful press barons still command a deeply unhealthy genuflection from politicians in a desperate search of a positive headline. It is the independent and competent regulator, Ofcom, which should be tasked with ensuring that the public interest is not sacrificed to political expedience.
Governments are not bound to accept the recommendations of select committees, and there is no guarantee that the Lords committee will propose sweeping changes. But without them it is quite likely not only that Murdoch will launch another bid for the Sky cash cow, but that this time he will succeed. The consequences for democracy of such undiluted media power being concentrated in the hands of a single individual are just as dire as they would have been three years ago.
Steven Barnett is Professor of Communications at the University of Westminster. He is currently running an AHRC funded project on Media Power and Plurality and is on Twitter at @stevenjbarnett.
Reposted with permission and thanks from Huffington Post UK.