Ofcom Report with Government – News Corp-BSkyB Deal at Stake

Added by Gary Dunn on January 24, 2010

Subsequent to complaints by newspapers and competitor media organizations, the British government had requested Ofcom, its communications regulator, to determine whether the proposed purchase of BSkyB by Rupert Murdoch’s Newscorp would place too much media power in the hands of a single individual.

For Newscorp, its decision to buy the remaining 61 per cent of the British broadcaster was a consolidation deal as it had helped the broadcaster build its business.

The deal has secured approval from the European Commission and the communications regulators are expected to report in favor of the deal or seek further time for investigation.

The company was confident that media plurality would not be adversely affected and that it would secure the necessary permission for its deal. Analysts believe that the deal will be finalized but the delay may cause the ultimate price to rise.

The investigation was surrounded by controversy after Business Secretary Vince Cable was taped to have said that he was declaring war on Rupert Murdoch.  Subsequent to the statement, the investigation powers were transferred to Hunt.

Hunt has submitted the report and it remains to be seen whether the organization’s has secured the necessary approvals for the deal or whether its quest to consolidate its business will take more time.