Culture secretary Jeremy Hunt has opened the way for News Corporation to buy the 61 per cent of BSkyB it does not already own, by approving plans to ‘spin off’ Sky News.
The compromise, designed to allay concerns that Murdoch would have too much editorial influence within the British media landscape, will make Sky News a new publicly listed company called Newco that will be independently funded for 10 years.
News Corp will back the venture with a 39.1 per stake in to ensure its survival, as Sky News is currently a loss making entity. But Sky News will get an independent board and chairman to theoretically ensure editorial freedom. The other shareholders will be made up of existing investors in BSkyB.
“Informed by advice from the regulators, I believe that these will address concerns about media plurality,” said Hunt. “The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corporation than it currently has.”
BSkyB is Britain’s most profitable broadcaster, and Murdoch now has a clear path to add it to his stable of British media outlets which already includes the Sun, News of the World, the Times and Sunday Times.
His first offer was rejected by BSkyB shareholders, so agreeing a price is the only obstacle left to overcome.