Rupert Murdoch’s News Corporation has been given the green light to buy out BSkyB’s other shareholders after agreeing to spin-off Sky news into an independent public limited company.
News Corp’s plans to buy the 61% of BSkyB shares it did not already own prompted complaints from rival news organisations about plurality in the sector. EU regulators had already cleared the merger on competition grounds.
In a statement issued today, Culture Secretary Jeremy Hunt confirmed he was allowing the merger on condition that Sky News be converted into a separate company which mimics the current shareholdings of BSkyB.
This means BSkyB shareholders would retain shares in the new company even after any sale of the main company to News Corp.
Sky news will have a ten year carriage agreement and be granted a seven year renewable license to use the brand “to ensure its financial viability”.
Hunt’s statement said these measures were “considered by the regulators to be long term in the rapidly-changing media sector.”
In addition the new Sky News holding company is required to “have a board made up of a majority of independent directors, including an independent chair, and a corporate governance and editorial committee made up of independent directors.”
Hunt is also blocking News Corporation from increasing its shareholding in the new company without permission from the Secretary of State for 10 years.
Mr Hunt said 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.”
He added: “Throughout this process I have been very aware of the potential controversy surrounding this merger. Nothing is more precious to me than the free and independent press for which this country is famous the world over.
“In order to reassure the public about the way this decision has been taken I have sought and published independent advice at every step of the way, even when not required to do so by law. And I have followed that independent advice.”
The arrangements will now be subject to consultation.