BSkyB (NYSE: BSY) is trying to justify its possible takeover by Rupert Murdoch’s News Corp (NSDQ: NWS). with an intriguing defence – that the abundance of the online age mitigates any dominance the combined group might have had…
In a dogmatic 13-page letter submitted to regulator Ofcom, the UK satcaster, channel operator and ISP says…
“Sky News’ share of national television news viewing remains small at around 7% … and alternative sources of news, in particular via the internet, have risen considerably in prominence…
“… A consideration of future developments is relevant to considering the potential impact of the Transaction on existing levels of plurality, not least given the growing prominence of news provision via the internet.”
News Corp is bidding to buy the 61 percent of the 10 million-customer pay-TV firm it does not already own. It has notified the European Commission, which will examine possible competition effects; Ofcom will also consider a takeover’s effects on media plurality…
News Corp’s UK newspaper rivals oppose the proposal, fearing cross-platform bundling leverage. But Screen Digest analysts say the impact will be minimal and News Corp’s only stated intention has been to buy outright a successful overseas business operating in its favoured furrow of subscription income.
In its submission to Ofcom, Sky is effectively trying to limbo under a threshold for plurality, which takeover opponents would be reduced, by framing the bid in the wider context of the last decade’s ongoing internet content explosion.
In doing so, it is also trying to get the regulator to focus on just one of the content areas in which it operates, saying: “The appropriate focus of Ofcom’s investigation is on national news, rather than the broader content genres (such as entertainment, fiction or drama) referred to in Ofcom’s Invitation to Comment.”
In other words, News Corp. should be allowed to buy the rest of Sky because, when you account for the internet, Sky News is but a tiny part of the entire news ecosystem.
Sky is also referring Ofcom to an earlier, Competition Commission investigation which ruled that BSkyB’s ownership of a 17.9 percent ITV (LSE: ITV) stake would not adversely affect media plurality.
But Ofcom won’t necessarily agree with Sky that its jurisdiction applies only to news content.