FT calls on Cable to look at Sky buyout

The Financial Times has joined calls for business secretary Vince Cable to investigate News Corporation’s proposed takeover of BSkyB.

The FT’s leader column said there was a “clear public interest to do so” and argued that there is a “clear risk” that Rupert Murdoch’s empire could “dominate the media scene, lock out challengers and stifle the diversity of debate”.

It added that the phone-hacking scandal embroiling News Corp’s News of the World newspaper raises “broader questions about Murdoch’s powerful grip on the UK media industry”.

Murdoch currently owns nearly 40 per cent of BSkyB but has started negotiations about a complete buyout.

“A merger would give Mr Murdoch unfettered power to direct its management and cash flows,” the paper said. “He could bundle his newspaper websites with Sky subscriptions, potentially giving him a big advantage as news migrates to an online subscription model. [The deal] would give Mr Murdoch substantial firepower to cross-subsidise his loss-making UK newspapers, enabling them to compete with rivals on price. Were Mr Murdoch to embark on fresh price wars, more rival newspapers would be marginalised – or even forced from the news stands.”

News Corp’s newspapers currently account for 35 per cent of national newspaper circulation and Sky accounts for 35 per cent of UK TV revenues, said the FT. (Source: FT)

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