Rupert Murdoch’s Sky bid is ‘serious threat to our democracy’, British campaigners say

PUBLISHED : Thursday, 09 March, 2017, 3:20pm
UPDATED : Thursday, 09 March, 2017, 3:20pm

Opponents of Rupert Murdoch’s bid to take full control of Sky have called for it to be blocked because the mogul’s family are not “fit and proper” owners following the phone-hacking scandal.

Giving even more control over our media to one man is a serious threat to our democracy
Maggie Chao, campaigner

The same critics have also raised fears that Sky News could become more “Foxified”, a reference to the right-wing US broadcaster Fox News, which would come under the same roof as the UK channel if the merger went ahead.

On Wednesday, campaigning group 38 Degrees delivered a 300,000-strong petition to Karen Bradley, the culture secretary, demanding the proposed £11.7 billion takeover be referred to Ofcom for further investigation.

“Giving even more control over our media to one man is a serious threat to our democracy,” said Maggie Chao, campaigner at 38 Degrees. “Rupert Murdoch is not fit and proper to take even more control over the news we read and watch.”

Bradley, who has set a deadline of Wednesday for submissions from 21st Century Fox and opponents of the deal to make their case, has said she is “minded” to call on Ofcom to assess potential media plurality issues and concerns about whether Fox is committed to the required editorial standards, such as accuracy and impartial news coverage.

38 Degrees has been joined by online activist group Avaaz and watchdog Media Matters in ramping up pressure on Bradley.

Avaaz, in conjunction with the Media Reform Coalition, has already made a submission arguing that the bid should be rejected on media concentration grounds because the overall market shares of both Murdoch-owned newspapers the Sun and the Times as well as Sky remain “materially unchanged” since the last bid in 2011.

Avaaz has now also submitted a lengthy document, in conjunction with Media Matters, cataloguing a wide range of examples of Murdoch exerting influence over the output of media that he own in the US and the UK.

In September, Media Matters called for an investigation into rightwing news network Fox News after allegations that the cable channel hired a private investigator to obtain the phone records of its reporter, Joe Strupp.

Rival broadcasters are also expected to lodge complaints in the UK and Europe – the European commission is also examining the deal – after expressing concerns that a Fox/Sky combination will dominate bidding for top-flight sport, television shows and films.

Fox’s submission argues that six years after the aborted 2011 bid, which Murdoch abandoned due to the phone-hacking scandal at his UK newspapers, the media landscape has changed beyond recognition with the rise of digital rivals such as Google and Facebook and news distributors and new outlets such as Vice, Buzzfeed and Huffington Post while traditional newspaper sales decline.

“We are confident that the transaction is in the public interest and will stand all tests,” said Fox, in a letter from Jeffrey Palker, the company’s deputy general counsel, submitted to the DCMS on Wednesday.

In a carefully timed charm offensive at a conference last week which included Sharon White, the chief executive of Ofcom, James Murdoch argued that “we are in an era of ultimate plurality, where choices, sources, and access are multiplied, even from where we were only five years ago”.

Murdoch, who has insisted that he will not have to offer to spin-off Sky News as he offered in 2010 to quell plurality concerns, has pledged to keep Fox News at arm’s length and “continue to broadcast news under the Sky brand maintaining its excellent record of compliance with the Ofcom broadcasting code”.

Ofcom has the right at any time to order a “fit and proper” investigation into Murdoch, earlier this week shadow culture secretary Tom Watson urged the regulator to conduct the test in a debate in the House of Commons.

An Ofcom investigation found in 2012 that Sky remained a “fit and proper” owner of a broadcast licence, but published a scathing assessment of James Murdoch – then chairman of Sky and head of the UK newspaper business – finding that his conduct repeatedly fell short of the standards expected.

“[Fox] takes compliance matters extremely seriously and is proud of the transformation of its corporate governance and of the arrangements it has put in place since [the phone hacking scandal],” said Palker. “In fact, the level of scrutiny and controls we have imposed around the world were informed by the lessons learned in 2011. [Fox] is confident any analysis Ofcom may be requested to undertake will confirm this.”

Ofcom has had a chance to air any concerns about Murdoch and investigate his role when news broke last January that he would be returning as Sky chairman and, significantly, after the highly publicised revolt at the Sky’s annual meeting when more than 50 per cent of independent shareholders voted against his re-appointment.

Murdoch’s Twenty First Century Fox bids US$14 bln for UK’s Sky

Fox supporters argue that given Ofcom has previously considered Fox’s 39 per cent stake in Sky to be the same as “controlling” the pay-TV company – such as when it told Sky to sell down its stake in ITV in 2010 – it is hard to justify the move to 100 per cent control now as triggering a fit and proper test of Murdoch if his return as chairman was unchallenged.

Fox also argues that since the aborted bid News Corp has split into two different companies comprised of its newspaper assets in one, and its TV and film assets in the other, with independent boards.

“The separation of [Fox] from News Corporation is a significant consideration and a material change from analysis carried out by Ofcom when News Corporation sought to acquire the remaining shares in [Sky] in 2010,” said Palker.

However, opponents argue that the Murdoch family will still be the ultimate owner of both newspaper and TV assets in the UK and that will give them to much control over UK news media.

Prosecutors end Murdoch’s News Corp phone hacking probe

Conspicuous by their absence are submissions from the unlikely alliance of media companies that banded together during the last bid to oppose Murdoch, which included the BBC, BT, Channel 4 and the publishers of the Guardian, Telegraph and Mirror. At this stage none are thought to have made a submission to the DCMS, although this could change assuming the deal is referred to Ofcom.

Part of Avaaz’s submission includes a legal view from George Peretz, who has recently represented campaigners mounting a legal challenge to Brexit, arguing that Bradley should add the “fit and proper” test to the Enterprise Act 2002 alongside the existing public interest criteria.

Separately, David Puttnam has introduced an amendment to the digital economy bill, which would subject all media takeovers to the fit-and-proper test and which is expected to be debated in the House of Lords. This comes after a group of cross-party politicians including Ed Miliband demanded that the regulator launched an immediate review of whether James Murdoch met such a test to hold a UK broadcasting licence.

Rupert Murdoch takes over at Fox News as CEO Roger Ailes resigns after sexual harassment claims

Bradley, who has said she has not yet committed to issuing a public intervention notice to refer the deal to Ofcom, will make her final decision next week.

“Murdoch’s attempt to grow his media empire in Britain is against the public interest,” said Alex Wilks, campaign director at Avaaz. “Karen Bradley needs to ensure they are subject to maximum scrutiny as she decides whether to hand them more control.”

Murdoch’s companies say US has dropped investigation into phone-hacking

Former culture secretary John Whittingdale advised his successor to refer the Sky takeover bid to media regulator Ofcom. Asked why, at a media industry conference in Oxford, he said “because there would be a huge political row if I didn’t”.

Whittingdale, who has made no secret of his support for Murdoch’s ownership of the media company, indicated he did not believe the bid by Fox should be blocked. If anything, he said, the media industry had become more competitive with the prominence of social media groups such as Facebook or Google, which lessened the dominance of the Murdoch-owned media.