FOR IMMEDIATE RELEASE
Thursday, June 30, 2011
Jess Levin (202) 772-8162
Washington, DC -- After more than a year of delays and tense negotiations, Jeremy Hunt, minister for the Department of Culture, Media and Sports in the UK, announced today approval for News Corp.'s proposed acquisition of BSkyB. The deal was initially proposed by News Corp. in early June of 2010. The deal comes in the wake of extensive protest about the threat to media plurality in the UK and after News Corp. agreed to spin off Sky News into a separate entity with a separate governance structure for at least ten years.
This latest announcement calls for further restrictions of News Corp.'s relationship with Sky News, due to regulators' concerns that Murdoch "has been successfully able to work around previous legal agreements he has signed designed to secure the editor's independence at the point when the Times was acquired in 1981 and when the Wall Street Journal was bought in 2007" (The Guardian,6/22/11).
News Corp. has a history of promising editorial independence and then quickly wresting control post-merger. In 1981, Murdoch purchased The Times with the promise of editorial independence. From the perspective of reporters and editors who left in the wake of the takeover, this promise was not kept. A quarter of a century later, when discussions between Murdoch and the Dow Jones Company became public, opponents of the deal referenced Murdoch's previous capture of editorial control with The Times. Still, the deal went through, and Murdoch seized control of The Wall Street Journal as well. To believe that Sky News will retain real independence under News Corp.'s proposal is a simple infraction of the maxim that those who forget history are doomed to repeat it.
Over the past year, while the deal has been under consideration:
"While the deal strives to assure independence for Sky News, history shows a pattern of quick transition to biased content in Murdoch-owned media," said Ilyse Hogue, Senior Advisor of Media Matters for America. "We will watch Sky in hopes that it can hold the line, but we won't be surprised if it joins the journalistic casualties of The Times and The Wall Street Journal. We also have to wonder if News Corp. shareholders will want to continue to pay the price for global distrust of Murdoch. In this case, the yearlong delay required to work out this deal cost is likely to cost the company more than $2 billion more than their initial offer price."
"[Murdoch's] approach is to be a very involved owner, even if it's not in the case of The Times of London and the [Wall Street] Journal to be as involved," said Sarah Ellison, who was a reporter at The Wall Street Journal from 1999 to 2008. "He's still on the phone every day with those editors. That is clearly involvement."
The announcement marked the beginning of a second consultation period, this time one week long, in which the public may comment on the deal.
See below for a timeline on BSkyB and News Corp. happenings this year.
BSkyB Price Soars between Initial News Corp. Bid and June 2011
As the final deal nears, one of BSkyB's biggest investors is publicly calling for a higher bid from News Corp. than the original 700-pence-per-share offer.
News Corp.'s Proposed Acquisition of BSkyB: Timeline
June 15, 2010: News Corp. issues bid to acquire BSkyB. On June 15, 2010, News Corp. bid $12 billion (700 pence per share) to acquire the 61 percent of the U.K. satellite company BSkyB that it does not already own. BSkyB rejected the bid, but announced they'd be "prepared to support an offer" with a higher price. [Reuters, 6/15/10]
June 16, 2010: BSkyB share price soars following News Corp. bid. BSkyB's stock increased by 19 percent following News Corp.'s takeover bid. [The Herald Scotland, 6/16/10]
October, 14, 2010: Coalition of British media figures urge U.K. Business Secretary to stop News Corp. takeover. A group of British media figures, including the heads of the Daily Telegraph, Daily Mail, Guardian, and Daily Mirror, sent British Business Secretary Vince Cable a letter urging him to intervene in News Corp.'s proposed takeover of BSkyB on the grounds that the "proposed takeover could have serious and far-reaching consequences for media plurality." [Hollywood Reporter, 10/14/10]
November 3, 2010: News Corp. informs European Commission of proposal to buy BSkyB. In November, 2010, News Corp. officially informed the European Commission of its intention to purchase the remaining portion of BSkyB it does not already own. This notification began the formal approval process. [Hollywood Reporter, 11/3/10]
November 4, 2010: U.K. Business Secretary Vince Cable intervenes in deal. Vince Cable announced on November 4, 2010, that he was intervening in the News Corp. BSkyB deal, referring the deal to Ofcom, the U.K. independent regulator and competition authority, to review the media plurality issues. Cable stated he would determine whether or not to refer the matter to the Competition Commission only after reviewing the Ofcom report. [News Distribution Service, 11/4/10]
November 4, 2010: M.P. holds debate on media plurality in Parliament. Lord Puttnam led a debate on media plurality in light of the News Corp. proposal in the House of Lords. [The Telegraph, 11/4/10]
December 21, 2010: European Commission approved proposed deal. On December 21, the European Commission approved the proposed News Corp. deal. [The Guardian, 12/21/10]
December 21, 2010: U.K. Business Secretary lost jurisdiction over deal for "declar[ing] war" on Murdoch; investigation transferred to the Culture Secretary. After it was revealed that U.K. Business Secretary Vince Cable had been secretly recorded telling undercover reporters from The Telegraph that he had "declared war" on Rupert Murdoch, Prime Minister David Cameron stripped Cable of his responsibility over media policy. The investigation into the News Corp. takeover of BSkyB was then transferred to Culture Secretary Jeremy Hunt. [The Guardian, 12/21/10]
December 31, 2010: Culture Secretary Jeremy Hunt receives Ofcom report. Jeremy Hunt received the Ofcom report, which was not to be made public until the final decision, and announced he would announce his decision to approve, turn down, or refer the deal to the Competition Commission by the end of January. [Daily Mail, 1/1/11]
January 13: BBC reports Ofcom report recommended Hunt refer the deal to the Competition Commission. Citing anonymous sources, the BBC reported that the private Ofcom report delivered to Hunt at the first of the year recommended Hunt refer the deal to the Competition Commission. [BBC, 1/13/11]
January 25: Hunt announces News Corp. must spin off Sky News to avoid having deal referred to Competition Commission. Jeremy Hunt announced that he would give News Corp. the chance to avoid a full review by the Competition Commission by agreeing to sell off or give up editorial control of Sky News. Hunt delayed his referral to give News Corp. time to address his proposal. [Bloomberg, 1/26/11]
January 28: BSkyB sees a 26 percent rise in stock price from June to December 2010. BSkyB saw a 26 percent rise in their stock price in the six months after News Corp. first announced it had submitted a bid to take over the company. Analysts predicted this would increase pressure on News Corp. to increase the asking price. [The Telegraph, 1/28/11]
February 19: Independent BSkyB investors join together to negotiate better deal from News Corp. Following the 26 percent increase in stock price, the independent shareholders of BSkyB decided that they would organize to negotiate a better deal. [Daily Mail, 2/19/11]
February 21: News Corp. buys Elisabeth Murdoch's company; Elisabeth will sit on the board. Rupert Murdoch's News Corp. bought his daughter Elisabeth's production company, Shine, both increasing his influence over media in the U.K. and fueling speculation over who will succeed him. [Bloomberg, 2/21/11]
March 3: Jeremy Hunt approves BSkyB deal, opens consultation period. Jeremy Hunt announced that he would approve the BSkyB deal without sending it to the Competition Commission, but would first open a consultation period. Under the deal struck between News Corp. and Hunt's office, Sky News would be spun off and its shares would be distributed among the existing shareholders of BSkyB, allowing News Corp. to retain a 39 percent stake in the news network. [Marketwatch, 3/3/11]
March 18: Rupert Murdoch sued for nepotism over purchase of daughter's firm. News Corp. Shareholders filed a suit against CEORupert Murdoch alleging "nepotism" was involved in the purchase of his daughter Elisabeth's company Shine. The suit complained Murdoch treated the business "like a wholly-owned family candy store." [The Independent, 3/18/11]
March 19: Almost 60 percent of Britons believe Rupert Murdoch has too much influence on politics. A YouGov poll commissioned by the civic organization Avaaz found that almost 60 percent of British citizens think that Rupert Murdoch currently has too much influence over British politics, and that 64 percent thought that allowing News Corp. to take over BSkyB will give Murdoch too much power over the media. [The Guardian, 3/19/11]
March 22: Consultation period yields 38,000 responses. Dealbook reported that the consultation period yielded 38,000 responses, but noted that many were "formulaic messages registration opposition to the deal." [Dealbook, 3/22/11]
March 22: Media group opposes BSkyB takeover. A group of British media accompanies, including the BT, the Guardian Media Group, and the Telegraph Media Group filed a legal complaint to News Corp.'s plan to take over BSkyB. [Dealbook, 3/22/11]
April 8: News Corp.'s News of the World apologizes for phone hacking. News Corp.'s British paper News of the World apologized to the victims of the phone-hacking scandal, in which celebrities and politicians had their voicemails hacked to obtain information for the tabloid's story, and promised to set up a compensation fund for certain victims. Earlier that month, the tabloid's former news editor and top news correspondent were arrested in relation to the hacking scandal. [NPR, 4/11/11]
April 11: British Government says News Corp. phone hacking scandal will not affect BSkyB deal. A spokesman for the U.K. Department of Media announced that News Corp.'s admission that its News of the World paper had illegally hacked into the voicemails of celebrities and politicians would not affect the company's bid to takeover BSkyB. The spokesman stated that "the two issues aren't connected," and that "the issue with BskyB is simply about media plurality." [The Telegraph, 4/8/11]
April 15: Scotland Yard reports there are likely "substantially" more than 91 News Corp. phone hacking victims. On April 15, shortly after News Corp. offered actress Sienna Miller the maximum amount she requested to settle her phone hacking lawsuit, the Guardian reported that Scotland Yard has now acknowledged that News of the World phone-hacking scandal potentially affects "substantially" more than the 91 victims previously thought. [Guardian, 4/15/11]
April 28: BSkyB revenues continue to rise, increasing likelihood News Corp. will increase their bid for takeover. The London Evening Standard reported on April 28 that BSkyB's revenues rose 14 percent for the nine months from July until March, adding to the mounting pressure on Rupert Murdoch to increase his bid for the 61 percent of the company that he does not already own. [London Evening Standard, 4/28/11]
May 5: News Corp. states it will walk away from BSkyB bid if price continues to rise. The Guardian reported on May 5 that News Corp. COO Chase Carey announced that the company is prepared to walk away from its proposed deal to buy the remaining part of BSkyB it does not already own if the price continues to rise. [Guardian, 5/5/11]
May 19: Al Gore says News Corp. pushed his network off-air in Italy for hiring Olbermann. Al Gore blasted News Corp. for forcing his television network off the air in Italy. According to Gore, Current TV was told it would be dropped from News Corp.'s Sky Italia because of the network's decision to hire Keith Olbermann. Gore noted that News Corp.'s actions should give pause to U.K. decision makers in the BSkyB deal. [NewsCorpWatch.org, 5/19/11]
May 20: Jeremy Hunt admits BSkyB ruling is taking "longer than expected," may require second consultation period. Hunt stated in May that the process to review the News Corp. bid to takeover BSkyB would "take as long as it takes," and he suggested there may be a "further consultation period" if the details of the spinoff of Sky News needed to be changed. [FT, 5/20/11]
June 22: Jeremy Hunt expected to give final approval in days; second consultation period expected. The Guardian reported on June 22 that Jeremy Hunt was expected to give the final approval for News Corp. to take over BSkyB in the next week, but would likely call for another seven-day consultation period. Ofcom has already delivered another report to Hunt on the deal. The Guardian also reported that the delay in final approval is likely to intensify negotiations around the legal agreement will be drafted that will require News Corp. to spin-off Sky News, noting that in previous cases Murdoch has been "successfully able to work around previous legal agreements he has signed designed to secure the editor's independence." [The Guardian, 6/22/11]
June 26: Major BSkyB investor urges News Corp. increase bid by £4 billion. Crispin Odey, a major investor in BSkyB, urged News Corp. to increase its bid for the remaining shares of News Corp. it does not already own by £4 billion. That sum would increase News Corp.'s bid from the £7.8 billion offer it made a year ago to £11.6 billion. [The Guardian, 6/26/11]