Murdoch's Massive Ambition Is Bad News; Some of the Biggest Names in the Newspaper and Broadcasting World Have Joined Forces to Fight a Bid by Rupert Murdoch's News Corporation to Take Complete Control of the BSkyB Satellite TV Empire. Here, Justin Lewis, Head of Cardiff Business School, Argues That the Murdoch Plan Would Be Bad News for Britain
NEWS Corporation's bid for complete control of BSkyB sent shudders across the UK media industry. Despite fears the Coalition government was in cahoots with Rupert Murdoch, Business Secretary Vince Cable decided to refer the matter to the media regulator Ofcom. With the BBC's future settled for the medium term, it is now the turn of Murdoch's media empire to face the glare of public scrutiny.
For many, there is more at stake here than the future of BSkyB. How much more of the UK media will fall under Murdoch's control before we draw a line in the sand? Murdoch's newspapers already have 37% of the UK's newspaper market. Sky is now a news provider for most British commercial radio stations. BSkyB is the main supplier of UK television services and by far our biggest broadcaster, with a revenue of pounds 5.9bn in the last financial year (considerably more than the BBC, and three times larger than ITV). It also owns Harper Collins, one of our biggest publishers.
News Corporation already owns a larger share of British media than would be permitted in the US and Australia, despite the relaxation of ownership regulations in those countries. Even some who applaud Murdoch's business acumen worry that this is a "Berlusconi moment", a time to defend the plurality and diversity of British media before it withers away. Trinity Mirror, the owners of this newspaper, are among the companies that called for the deal to be blocked.
Murdoch's defenders argue that News Corporation already owns the biggest share of BskyB. Owning it outright, they suggest, would make little difference. If the growth of Murdoch's UK holdings was acceptable before, why not now? There is some truth to this - many feel that our attitude to media ownership is already too relaxed. But it is also true that Murdoch's bid enhances his competitive position. The change may not be immediately dramatic, but it unquestionably alters the delicate ecology of the British media landscape.
Full ownership of BSkyB enables News Corporation to leverage its assets far more ruthlessly. It can use its position to aggressively cross-subsidise and cross-promote its titles across broadcast and print platforms - in a way that none of its rivals can match. It can bundle its newspapers in with its TV subscriptions - a strategy which might prove the last straw for some newspapers, already struggling with the loss of ad revenue to the internet.
In short, the buyout gives News Corporation - with its dominant position in both print and broadcasting - the ability to exercise an unprecedented degree of market power. …