A new twist in the ongoing tussle for ownership of Sky has seen shares of the company soar as media titan Comcast placed a £22 billion bid for the company. Last week’s surprise news triggered a takeover battle with Murdoch owned 21st Century Fox that looks likely to rival only Nedal vs Federer in length, complexity and sheer resilience. Yet with gold and silver medals at the Jewish Olympics, does the CEO of Comcast Brian Roberts hold the advantage point across the pond?
Comcast's offer has firmly placed a cat amongst the proverbial pigeons, coming after 2 years of merger talks between Fox and Sky that have been plagued by the red tape of political consent. Only last month, the Competition and Markets Authority (CMA) found the Murdoch bid “incompatible with public interest due to a lack of media plurality,” following intervention from (then) Culture Secretary, Karen Bradley.
What calls for such intervention?
The Murdoch empire already owns a third of British media under News Corp and 39% of Sky. Regulatory forces are set against further expansion; suggesting a full take-over of Sky could threaten the diversity of media opinion and leave an ever-increasing portion of the British media subject to the Murdoch agenda.
Anne Lambert, chair of the CMA highlighted that "media plurality goes to the heart of our democratic process. It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda." Dare we mention Brexit, Trump or #fakenews? What appears in the headlines of our leading media outlets has always had the power to sway hearts and minds, of both voters and those who they elect to represent them. Potential for increased corporate involvement behind the scenes should inspire no truly democratic society.
Enter Comcast, the NBC and Dreamworks owner, which is hoping to “use Sky as a platform for growth.” Shrek and Kung Fu Panda are planning their takeover of Europe, and this fairy-tale idea is being well received. On Tuesday 27th February Sky’s share price rose from £2.10 to £13.10, overtaking the Comcast bid of £12.50. The exact share prices matter less than what this reaction indicates, a clear excitement in the market over the deal. Heavy investment in NBC also signals support for its potential to retain and invest in Sky - Comcast is scoring points over Murdoch.
Fox’s 39% ownership of Sky adds complexity to this ongoing saga. Excluding Fox shareholders, the threshold is set at 81% for Comcast to gain the controlling interest in the firm. With Murdoch’s bid raising political risks and threats to media plurality it could well be game, set and match to Comcast.
But why does media plurality matter?
Media plurality hardly sets pulses racing down the pub, so why should PRs or politicians care? Ownership itself shouldn’t cause concern, provided editorial integrity and diversity of voices in our media sources is kept intact… so what else could be going on?
Last Thursday, under a blanket of snow, Matt Hancock, Secretary of State for Digital, Culture, Media and Sport confirmed that the Leveson inquiry would go no further. The second stage of the process was set to consider the extent of unlawful or improper conduct within News International and other media outlets, and assess police conduct in investigations.
Labour’s shadow culture secretary Tom Watson called the move “a disappointment, a breach of trust and a bitter blow to the victims of press intrusion.” Matt Hancock stressed that enough had been done, referring to the establishment of the Independent Press Standards Organisation (IPSO) and reform to policing practices.
Cynics might argue that the current focus on media plurality serves as a convenient distraction from failing to go further on Leveson. What is clear though, is that this new episode in the series confirms the status of the British media as a world leading asset, though Murdoch's expansion hopes may remain simply pie in the sky.