UK tentatively backs News Corp. buyout of Sky

[March 03, 2011]  LONDON (AP) -- The British government on Thursday accepted plans by Rupert Murdoch's News Corp. to buy full control of British Sky Broadcasting -- on condition that it spin off its Sky News channel as an independent company.

The takeover plan cleared by Culture Secretary Jeremy Hunt is still subject to consultation before gaining final approval. News Corp. would then be free to make an offer for the remaining BSkyB shares.

As part of the deal, News Corp. would still retain a 39.1 percent stake in the news channel, the same as its current stake in BSkyB.

Murdoch's News Corp. wants full ownership of BSkyB to get access to all of the pay-television company's profits, which amounted to 407 million pounds ($648 million) in the last half of 2010.

But some media critics and politicians have expressed concern about the deal. Murdoch already has considerable influence in the British media -- he owns the top-selling tabloid newspaper, The Sun, as well as The Times, The Sunday Times and the News of the World.

The BBC is among a coalition of British media players demanding an inquiry by Britain's Competition Commission, expressing concerns about its impact.

A coalition of media groups, which includes BT, Guardian Media Group, Associated Newspapers, Trinity Mirror, Northcliffe Media and Telegraph Media Group, signaled immediately that it would seek to block the proposal. The group said that the proposal did nothing to address concerns that News Corp. would restrict or distort competition.

Hunt said he was "very aware" of the controversy surrounding the deal and that he would consult on the plans until March 21 before making a final decision.

"Nothing is more precious to me than the free and independent press for which this country is famous the world over," he said.

[Associated Press]

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