Media groups challenge Sky plan

British media groups vehemently opposed to News Corp's proposed buyout of pay-TV firm BSkyB say it is "fanciful" that Rupert …

British media groups vehemently opposed to News Corp's proposed buyout of pay-TV firm BSkyB say it is "fanciful" that Rupert Murdoch will not interfere in the running of its influential news station.

The media groups, which include the owners of the Guardian and Telegraph, were responding to a decision by the government to allow the controversial deal to proceed as long as News Corp spins off the 24-hour Sky News channel.

"It is fanciful to expect that Sky News will enjoy any meaningful independence allowing it to offer a separate contribution to news plurality," the alliance of media groups opposed to the deal said in a legal submission.

"Instead, the editors and directors of Sky News will be acutely aware that the viability of the company (and therefore their own job security) depends entirely on maintaining the approval of News Corporation."

News Corp made its initial bid for the 61 per cent of the satellite broadcaster it did not already own last summer.

But concerns have risen ever since that the deal would give Murdoch too much control over the British media as he already owns around a third of the newspaper market.

However the media tycoon took a huge step towards securing the £8 billion buyout when Britain accepted his proposals to ease competition concerns.

In return for clearance, News Corp will spin off the loss-making Sky News channel and guarantee its future by giving it a 10-year carriage deal on the Sky TV platform and a seven-year branding arrangement to use the Sky name.

The media groups, which include BT, Guardian Media Group, Associated Newspapers, Trinity Mirror, Northcliffe Media and Telegraph Media Groups, said News Corp would still own almost 40 per cent of the new Sky News company under the proposed deal.

The new company would also be dependent upon a contract with News Corp for 85 per cent of its revenues and for the distribution of its TV news channel on the BSkyB network, they said.

"The concerned parties strongly urge the secretary of state to reconsider his provisional decision and instead ask the Competition Commission to provide the thorough review required properly to address the takeover's threat to news plurality," the groups said.

A government consultation on the plan to approve the deal ended yesterday. Analysts now expect a final decision, on whether to approve or refer the takeover for a longer inquiry to come within a couple of weeks.

Lawyers familiar with the case said they think the government's plan will be hard to challenge.

Reuters