Super Moderator
Location: essex ma
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these from today's guardian:
Quote:
British media join forces against Murdoch takeover of BSkyB
Letter to Vince Cable signed by many of UK's leading news providers warns £8bn deal would damage democratic debate
Fleet Street's highly factionalised newspaper industry today set aside historic differences to join forces in an unprecedented assault against the power of Rupert Murdoch's media empire.
The companies behind the Daily Telegraph and the Daily Mail - both supporters of the Conservatives - united with the owners of the Guardian and the Labour-backing Daily Mirror to petition Vince Cable, the business secretary, to consider blocking News Corporation's proposed £8bn full takeover of the satellite broadcaster BSkyB, which trades under the name Sky.
Fearful of the combined might of an integrated News Corp-Sky operation, which would include the Sun, the News of the World, the Times and book publisher Harper Collins, the complainants said the "proposed takeover could have serious and far-reaching consequences for media plurality".
The letter, signed by Murdoch MacLennan, chief executive of Telegraph Media Group; Sly Bailey, chief executive of Trinity Mirror, owners of the Daily Mirror; and Andrew Miller, chief executive of Guardian Media Group, was sent to Cable today. The signatories argue against a combined Murdoch multimedia empire that would have a turnover of £7.5bn compared with the BBC's £4.8bn.
They are joined by Mark Thompson, director general of the BBC; Ian Livingston, chief executive of BT; and David Abraham, chief executive of Channel 4. Thompson was the first to publicly call for Cable to review the deal "given the scale of the potential ownership in UK media", in an interview last week with Charlie Rose on the PBS channel in the US.
The document is also backed by a memo prepared by the City law firm Slaughter & May, which sets out legal arguments for the minister to intervene.
It presents a political headache for David Cameron's coalition government. His Conservative party came to power with the help of an enthusiastic pre-election endorsement from the Sun - Britain's bestselling newspaper - and other Murdoch titles, but Cable's Liberal Democrats enjoyed no such support.
Cameron also employs the former News of the World editor Andy Coulson as his director of communications. Coulson, whose editorship of the Sunday tabloid remains mired in controversy about phone hacking, is close to key figures in News Corporation's newspapers, led by News International's chief executive and former Sun editor Rebekah Brooks.
The submission is made all the harder to dismiss by the fact that its organisers include Lord Black, the well-connected former director of communications of the Conservative party who now works at the company behind the Daily Telegraph; and Paul Dacre, veteran editor-in-chief of the Daily Mail, whose newspaper is regarded as the authentic voice of middle England.
Over the past week, both the Telegraph and the Mail have been critical of the government's plans to cut child benefit for higher rate taxpayers, in a sign that relations between the two right-of-centre newspapers and Cameron's government are already strained.
Although Murdoch is closely identified with Sky, which is chaired by his son James, he does not own all of the fast-growing satellite broadcaster. In June, News Corporation proposed an £8bn, 700p-a-share buyout out of the 61% of the company it does not own.
Before it can go ahead, the deal must be approved by regulators. News Corporation is expected to file for regulatory approval with the European commission on competition grounds, but Cable would then have 25 days to decide whether to order an inquiry into the transaction on public interest grounds, as defined by "media plurality" being compromised.
The business secretary is expected to make his ruling within 10 days of the European commission being notified, and his decision will have to be rubber-stamped by Cameron. The media plurality test - which would be carried out first by the communications regulator Ofcom and then by ministers - is a loosely-defined concept by which Cable would have to be convinced that rival newspapers and broadcasters were at risk of closure or cuts that would damage democratic debate.
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British media join forces against Murdoch takeover of BSkyB | Media | The Guardian
and this:
Quote:
Turning the heat on Rupert Murdoch
Media groups must raise the political temperature if they are to halt News Corp's bid to take full control of BSkyB
Dan Sabbagh
It is March 2015, a couple of months before the general election. One media company bestrides British politics – spanning television, newspapers and the internet. It is more than twice the size of the BBC, with a turnover of £9bn. Controlled by Rupert Murdoch, it is called News Corporation.
Bound by none of the BBC's tradition of impartiality, the Murdoch family is deciding whether to endorse David Cameron for a second term. They meet in the knowledge that behind them lies the support of a company whose Sun and Times titles account for two fifths of all newspapers sold in Britain and whose broadcasting operation is larger than the BBC, ITV and Channel 4 combined.
This vision of financial and political power has so terrified rivals that they are already ganging up in alarm. From the Daily Telegraph to the Daily Mirror, from the Guardian to the Daily Mail, a joint letter has been prepared for the business secretary, Vince Cable. Sent today, the purpose of the memo is simple – to persuade Cable to block News Corp's proposed £8bn bid to take full control of BSkyB.
Some have called it Britain's "Berlusconi moment". Yet even in Italy, it could be argued that Silvio Berlusconi's dominance of the media is less complete. The Italian prime minister controls three mainstream television channels through his company Mediaset, but he is not allowed to own any newspapers in the country (although one small title is controlled by his brother).
Berlusconi or not, what the protest does present is an unexpected headache for David Cameron and the coalition government. The prime minister's natural supporters in Fleet Street are split. Leading the rebels is Lord Black, the Conservatives' director of communications under Michael Howard, who is now an executive director at the company behind the Daily Telegraph – with close support from Paul Dacre, editor-in-chief at the Daily Mail.
And while Cameron's party owes much to pre-election support from the Sun and the Times, including an endorsement from Simon Cowell in the red-top paper, the Liberal Democrats have no such debt.
What so frightens Britain's newspaper owners today is what would happen when the profits of Sky are aligned to the power of the Sun and the Times, creating a media company whose size and scale is unheard of in British history. Sky is already larger than the BBC today, with a turnover of £5.9bn, while News International turns over £1.7bn. The BBC, by contrast, has a turnover of £4.8bn – but its licence fee income is widely expected to be cut, amid what BBC insiders describe as "neo-con" political pressure from Murdoch's newspapers.
On its own, Sky has the ability to outbid rivals at will. When the broadcaster snatched the rights to the next two seasons of Mad Men earlier this month, it offered £225,000 an episode. The BBC had been paying just £65,000. It spends more than £1bn a year on sports, this season sweeping up the rights to every single Champions League game, except for a single match a week that Uefa reserved for ITV.
Yet today, Rupert Murdoch's News Corp only owns 39.1% of the business, meaning that the majority of profits leak to outside investors, British and American pension funds. Sky's cadre of independent directors, whose ranks included Tony Blair's publisher Dame Gail Rebuck, the former Royal Mail chairman Allan Leighton and Jacques Nasser, who was chief executive of Ford, help ensure Sky's cashflows are directed to all of its shareholders' benefit.
If News Corp were to wholly own the company, it would control a profit flow of £626m as measured at the last set of accounts, rising to £1.4bn by 2015. That's according to data prepared by the investment bank Nomura, which also predicts that Sky will have a turnover of £7.8bn on that date, nearly £2bn more than today, and a £1bn marketing budget, which could be used to help promote its newspapers as well as the broadcasters.
What the newspaper groups fear is that News Corp could use its extra wealth to cross-promote television and newspapers, a simple concept known in the media industry as "bundling". Lord Puttnam, the filmmaker who is now deputy chairman of Channel 4, says: "Not only could it be possible for Sky subscribers to be offered print copies of the Sun or the Times cheaply – but there is the scope for massive discounts on electronic services that you or I haven't even thought of."
Sky has taken advantage of bundling in the past to grow at the expense of competitors. The company has long been the leader in pay television – its market share is 80% – but four years ago the company decided to get into broadband. It did so by undercutting BT, offering a basic service for free to existing subscribers, at a time when regulations prevented BT selling at a loss.
Sky's broadband service quickly grew, with half the customers taking the free product – and while the free offers have largely stopped, the company now has 2.6 million customers. Yet, when BT tried to complain about Sky's predatory pricing, the communications regulator, Ofcom, didn't investigate.
Murdoch has long pursued a strategy of price cutting at the Times and the Sun, which this year has been sold as cheaply as 20p. Accounts filed at Companies House suggest that already some of his British newspapers are having to be supported by other parts of the company. The loss for the Times and Sunday Times was £87.7m in the year to 28 June 2009, a level described by the Times's editor, James Harding, as "unsustainable" – and was partly supported by a £40.3m profit at the Sun and the News of the World.
Competition lawyers say Sky exhibits what is known as "increasing dominance" – a virtuous circle in which its financial success allows it to spend more money to bring in more customers, and in turn generate more profit. Sky's financial strength allows it to outbid rivals for an ever-increasing range of sports rights, and now it is moving into buying up US programming. There is technological innovation: this month it became the first broadcaster to launch a 3D channel, with coverage of the Ryder Cup. With a better service it wins more customers – a momentum that is hard to stop.
Over the past two decades, the growth in Murdoch's economic power went unchecked. Labour politicians were reluctant to take on the media mogul, partly because of the fear of losing the support of his newspapers but also because, in the words of one former minister, "it wasn't preordained that Sky would succeed – so why should they be punished?"
The fact, though, of a specific transaction – the £8bn attempt to buy Sky outright – does give competition authorities and politicians an opportunity to intervene. However, the problem for the anti-Murdoch camp is that competition authorities see television and newspapers as two separate markets, even if they are related. Anti-Murdoch lawyers concede that it would be hard to block the deal on pure competition grounds because Sky is getting no bigger in television and News Corp no bigger in newspapers as a result.
Cross-media ownership has instead historically been a matter for primary legislation rather than competition law, but today's rules lag behind the economic reality. So the only clear-cut rule is that preventing News Corp or Sky owning more than 20% of ITV. But after a share raid back in 2006 designed to prevent ITV falling into the hands of Virgin Media, Sky owns 7.5% – taking advantage of a loophole that allows the Murdoch family to have a crucial say in ITV's future if a foreign media company tried to mount a bid.
That is why any appeal to Vince Cable has to be made on the woolly grounds of "media plurality". The argument is that News Corp and Sky together are so large relative to rivals that their combined financial muscle will lead, inevitably, to the gradual erosion of the positions of rival newspapers. "If they cut the price of the Times, I think it would be the Financial Times and the Daily Telegraph that would suffer first," said Puttnam.
Yet the plurality argument relies on an impossible-to-prove notion that other newspapers could be harmed or even collapse from some as yet unspecified cross-promotion or subsidy. It means that in reality, Fleet Street's most unlikely alliance has to raise the political temperature if it is to have a chance of succeeding. By coming together in this fashion, the Mirror, Mail, Guardian and Telegraph might just do that.
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Turning the heat on Rupert Murdoch | Media | The Guardian
nothing like this has yet happened in the united states.
perhaps we've already passed a "berlusconi moment"....
working...more on this later.
what do you think?
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