UK probes Rupert Murdoch’s huge media influence

BY A CORRESPONDENT

29 May, 2007:

The government of the United Kingdom has begun an investigation into media tycoon Rupert Murdoch’s influence over British media.

The inquiry is mainly aimed at the news operation and how Rupert Murdoch’s Sky Network will work with the new satellite delivery system ITV, 18% of which Sky’s chairman Murdoch now owns.

The Competition Commission will report its findings to Alistair Darling, Trade Secretary, in November 2007, The Independent newspaper has reported.

Some officials see Sky’s purchase of an ITV stake big enough to qualify as a merger, threatening the independence of the satellite service.

News International, Murdoch’s newspaper arm, controls 36% of United Kingdom’s newspaper market, while a combined Sky-ITV controls 30% of the national television news market, according to figures available with the British government. News International also owns The Times, The Sunday Times, The Sun and the News of the World.

The last time that septuagenarian Rupert Murdoch’s extensive media interests faced such intensive scrutiny was during the passage of the Communications Act five years ago when Lord Puttnam forced the government to insert a clause specifically designed to restrict his influence. Sky complied with that provision when it bought less than 20% of ITV late in 2006.

But, in April 2007, the Office of Fair Trading and Ofcom, the communications watchdog, said the 17.9% of ITV that Sky bought raised concerns about competition.

The satellite broadcaster, run by Rupert Murdoch’s son James, had spent nearly £1 billion to buy the ITV shares. This had smashed Sir Richard Branson’s ambition to merge his Virgin Media with ITV.

Ofcom has warned that a connection between ITV, which has a 40% shareholding in ITN, and Sky, with its Sky News brand, could harm consumer choice television news.

Ofcom also said the connection of News International’s newspaper business, BskyB – in which News Corp has a 39% stake – and ITV raised wider concerns about the “plurality” of news provision in the United Kingdom.

The audience for television news, Ofcom said, might be negatively affected, in terms of sufficient media plurality, if those who control newspapers acquire influence or control over television channels.

In the United States, Rupert Murdoch’s News Corp owns the social networking website MySpace, the New York Post and the Fox entertainment network, which includes Fox News, 20th Century Fox and Fox Searchlight Pictures. News Corp also owns the publishing house HarperCollins, and newspapers in Australia, including the Australian.