A different angle on the proposed News Corp takeover of BSkyB

At a seminar on media plurality held in City University today, two knowledgeable commentators aired opinions on the vexed issue of News Corp’s bid to own 100% of BSkyB that were so different from the usual lines of argument that they deserve a wider hearing.

David Elstein, who has worked for most British broadcasting channels (including BSkyB), pointed out that the debate over the takeover was now entirely confined to Sky News, the least valuable part of the company and losing somewhere between £30m and £50m a year. The BSkyB board, he said, had already made clear that it was prepared to sacrifice – to sell or to close – the news division in order to get the rest of the deal through. In those circumstances, Elstein suggested, Rupert Murdoch could happily allow Ofcom, the regulator, to appoint the team of news executives at Sky News and make several other similar concessions to erect barriers against his interference in news. In that case, Murdoch would have no more or less influence on the editorial output than he does now, but would have secured the profit stream from the company at that relatively small price.

Elstein went one stage further and reminded his audience that news organisations are not the same as broadcasters: Independent Television News, for example, doesn’t broadcast but supplies other broadcasters. Sky News could find itself in the same position as a contract supplier of news, perhaps in Britain and certainly in continental Europe.

This got me thinking. People have talked about the possible closure of Sky News, particularly if a deal stops the cross-subsidy from BSkyB. But tens of millions of pounds have also been invested in the Sky News website. The site is one of the best of its kind in the world – often giving the larger BBC a run for its money – with a sizeable team of its own journalists, including video reporters. The chances of this being shut down, even if Sky News wasn’t broadcasting any more, are small. Almost certainly zero.

Sky is expanding all over the world: Sky Arabia is being built up from small beginning at a base in Abu Dhabi and will eventually employ 200 Arabic-speaking journalists. So if anything should stop Sky News appearing on a British channel, don’t imagine that the newsroom has folded up. It might even be an early example of a news operation that is a website first and a television news supplier second.

David Elstein’s point was underscored by Tim Suter, now a private consultant but previously head of broadcast policy at the Department of Culture, Media and Sport (DCMS). The debate is now so focussed on news, he said, that the commercial agreement is more or less done. It only remains to tie up the conditions in which Sky News continues to do what it does.

These were opinions so unexpected they seemed worth recording.


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