Less than two weeks ago the News Corp takeover of BSkyB was a done deal: now in the latest of a remarkable series of events, the UK government now appears to be wavering in its support of Rupert Murdoch's ambitions.
After resisting all pressure before the News of The World phone hacking scandal erupted, questioning the extent of the influence News Corp. chief Rupert Murdoch has on UK politicians, UK Secretary of State for Culture, Olympics, Media and Sport Jeremy Hunt has, unexpectedly given his previous cast-iron support for the deal, now written to the UK Office of Fair Trading (OFT) and UK broadcast regulator Ofcom for ‘more advice’ on the takeover.
Ofcom for instance could apply a fit and proper person’s test on the prospective buyer of BSkyB, something that in the light of the phone hacking scandal affecting the Murdoch-owner News Of The World, News Corp could likely fail.
The publication of Hunt’s letter has seen BSkyB shares tumble by 7% on early London trading. Investors also fear a further blow when on 13 July a UK House of Commons motion, which is likely to be passed, will call for the deal to be delayed.
Media analysts believe that Hunt is now effectively trying to distance the UK government from News Corp and bury the deal in a protracted referral process. On 30 June, Hunt all but rubberstamped Murdoch’s plans to buy the remaining shares in BSkyB that it doesn't own.
After publishing the results of a consultation launched on 3 March, Hunt said: “The regulators have confirmed that the proposed undertakings are still sufficient to ensure media plurality. I could have decided to accept the original undertakings but a number of suggestions were made in response to the consultation which could further strengthen the undertakings, particularly around editorial independence, business viability and the articles of association. I am therefore proposing some changes to the undertakings and I will now hold a further public consultation.”
Hunt did add that a new consultation period on the revised undertakings would run until midday Friday 8 July, right in the middle of the News of the World scandal.