The bid by 21st Century Fox is against the public interest
Five years ago, after the phone-hacking revelations, the House of Commons unanimously rejected Rupert Murdochs bid for 100% of Sky. A year later, Sky was only passed by Ofcom as being fit and proper to hold a communications licence on the basis that there was not full Murdoch ownership and control. Today, the Murdochs want to turn the view of parliament and the regulator on its head. But whats really changed?
The bid by 21st Century Fox on behalf of the Murdochs to take over the 61% of Sky that they do not own may well satisfy the private interests of a majority of shareholders and the top managers of Sky (the chief executive could pocket more than 20m), but there is a wider public interest. This bid goes to the heart of who wields influence in our media and who is fit to do so. The public interest centres on plurality and fitness. These concerns are arguably stronger after what emerged from the Leveson inquiry and subsequent action in the courts. The Murdochs have the largest circulation share of any newspaper group (just under 30% weekday and over a third on Sunday); and with full control of Sky, just under 20% of the TV news market; and around 45% of radio audience through Skys supply of news content to commercial radio. And these figures may understate the Murdochs influence over news because of their sheer purchasing power for the best journalistic talent and the way the entire broadcast news agenda is influenced by their newspapers.
The other public interest concern has been that the excellence and independence of Skys news coverage could be compromised by an activist majority owner with a strong political agenda, via editorial appointments, if not day-to-day interference. The Murdochs may claim that editorial independence could be guaranteed by ringfencing Sky News, and impartiality protected by Ofcom, but the answer to this and the deeper questions at the heart of this bid depend on trust and the conduct of the Murdoch organisation and family does not inspire trust.
The Ofcom report in September 2012 was withering about James Murdoch. It said his behaviour was difficult to comprehend and ill-judged and that it repeatedly fell short of the exercise of his responsibility to be expected of him as CEO and chairman [of News International]. It goes on to say his behaviour raise questions regarding [his] competence in the handling of these matters and his attitude towards wrongdoing in the companies for which he was responsible.
The criticism fell just short of debarring Sky as unfit and improper. But the report made it clear that its assessment was based on the Murdochs being a minority shareholder, with a counterweight from other directors or shareholders and that James Murdoch was no longer chairman of Sky. The assessment was made pre-Leveson and made it clear that Ofcoms assessment would be influenced by further evidence.
Four years on, the facts are these:
A number of senior employees from News International have been convicted of phone hacking or perverting the course of justice. Police and other public officials have been convicted of taking payments from employees of News International. There are numerous civil claims pending, including fresh allegations against the Sun, in which the role of James Murdoch in the alleged deletion of incriminating emails has been raised in evidence.
Part 2 of Leveson, probing further the close relationships between media, politicians and police, and, specifically, the extent of corporate governance and management failures at News International in its terms of reference, has not yet commenced thanks to government foot-dragging. Is 100% ownership acceptable now when it was not four years ago? No. James Murdoch is back as chairman of Sky and is chief executive of 21st Century Fox. And there are crucial, and unanswered, issues around the culture and competence of what went on at Murdoch-owned newspapers which have not been satisfactorily resolved or answered. If it was inappropriate for the Murdochs to take 100% control of Sky before the multiple convictions of their former employees, it must be inappropriate now. Promises that might be made to the regulators that there will be a specified proportion of independent non-executive directors cannot overcome the reality of total ownership and control.
So what next? The obvious and proper step is for Ofcom to consider the plurality issues afresh and repeat an assessment of fitness. It is the responsibility of Karen Bradley, the culture secretary, to ensure that this happens. Even those who have an altogether more sanguine view of the Murdochs role in the media than we do will want to ensure that this government demonstrates its freedom from influence.
Concentrations of power and whether we stand up to them decide the kind of country we are. Thats what we said across political parties five years ago. Thats what Theresa May said on the steps of Downing Street when she became prime minister. Now it is for the government and the regulator to follow the logic, evidence and facts, irrespective of the power and desires of the Murdoch empire.
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