Rupert Murdoch has pulled News Corporation’s bid to buy the 61 per cent of BSkyB it doesn’t own saying the ‘current climate’ makes it impossible.
This happened shortly before the House of Commons was due to debate a motion opposing the bid, in reality an excuse for various MPs to line up and monster the Murdochs and their henchfolk at News International. Presumably this will still go ahead.
It’s unlike Rupert Murdoch to back down in the face of even the might (if such it be) of the British political classes. There’ll be a cold calculation here which is that UK media regulator Ofcom is champing at the bit to rule on whether or not News Corp would have been a fit and proper owner of all of BSkyB. At the moment, in the wake of the phone hacking and paying police interwoven scandals the likeliest answer would be that it isn’t.
But if News Corp isn’t the fit and proper owner of all of it, it surely isn’t the fit and proper owner of 39 per cent of it.
The Competition Commission, in which the BSkyB bid may still sit, ordered BSkyB to reduce the 17.9 per cent stake it bought in ITV in 2006 (a move designed to thwart pay-TV rival Virgin Media’s desire to merge with ITV) to 7.5 per cent, at a cost of several hundred million pounds to the company then run by James Murdoch.
A recommendation from, presumably, Ofcom and the Competition Commission that News Corp should sell its 39 per cent of BSkyB (on fit and proper grounds) would be a mega disaster for the Murdochs, far worse than anything that’s happened so far.
So Rupert Murdoch, like a general who’s invaded another country and finds he’s exhausted his supply lines (we won’t compare him to Hitler invading Russia, that would be too cruel) seems intent on doing the prudent thing and withdrawing to try to hang on to what he can.
To do so he might need to sell his remaining UK newspapers, the Sun, The Times and the Sunday Times.
The BBC’s Robert Peston in the above link says he won’t be prepared to do that at a loss.
Don’t bank on it; combined they make a loss, 39 per cent of BSkyB is far more valuable.