‘I don’t like Rupert Murdoch’ is not going to cut the mustard at the Commission

Raymond Snoddy says despite the poisoned chalice left to him by Vince Cable, Jeremy Hunt will be in the relatively comfortable position of being able to accept a Competition Commission go-ahead for Murdoch’s takeover of BSkyB before the year is out…

As the last Christmas decorations are being removed it’s time for a final seasonal tilt at divining the future. Before next Christmas Rupert Murdoch’s News Corporation will have been given the right to bid for the 61% of BSkyB that it does not already own.

Conditions will however be imposed to ensure that Murdoch will not be able to realise the worst fears of his rivals – sweetheart subscription deals for Sky and the News International newspaper of your choice.

Predicting the future has never been an exact science but there is a reasonable trail of logic, instinct and supposition that would take a reasonable person in the direction of such an outcome. Most of the steps in the chain of argument are so obvious as to amount to truisms.

First, culture secretary Jeremy Hunt has absolutely no option but to refer the issue for full investigation by the Competition Commission. If there ever was any doubt about the matter there can be none now because of pirated prejudices of business secretary Vince Cable.

Due process across a decent stretch of time is also the only way of putting matters right given the number of meetings Hunt has had with News Corp luminaries without civil service chaperones and the kind things he has said about the achievements of BSkyB.

In retrospect it was a trifle unfortunate that the culture secretary had said publicly he did not object to such a takeover.

This all happened before the unexploded hand grenade suddenly arrived in his in-tray and before circumstances forced him to become quasi-judicial.

Apart from political perceptions there are many strong reasons why there should be a full investigation. They include the sheer scale of the £8 billion to £9 billion deal and the fact that communications regulator Ofcom believes it should be so.

At the very least there is clearly an arguable case that such a deal should be looked at on grounds that plurality of the media could be threatened. We should all be grateful to Ofcom for bringing some methodology to examining the issue to help cut through the wails of vested interests on both sides.

Chris Goodall from Enders Analysis produced a report looking at the number of minutes a day people spent reading newspapers and listening to, or watching, broadcast news. The Daily Mail accounted for 10.5% of the total – less than half the 22% that would be controlled by a News Corp owned BSkyB.

But then on comes the real heavyweight – the BBC – which accounts for no less than 39% of all news consumed by Britons.

Such reasoning provides a useful baseline but is a crude counting measure. It mixes up the different media of newspapers, radio and television and does not deal with the subtleties of which news outlets respect basis rules of impartiality and which do not.

Unfortunately for Jeremy Hunt, sending the BSkyB takeover to the Competition Commission only buys him six months or so of time – unless he has been promoted to the business secretary’s job by then.

In most mergers and takeovers the Commission has the final say. But Cable has left Hunt a final poisoned chalice. Because the initial Ofcom investigation was launched as a public interest issue, it is Hunt who will have the final say on the Competition Commission’s verdict.

The Commission is unlikely to block the BSkyB takeover in its entirety. If it did that would cause Hunt a serious dilemma. Can you imagine the political row and cries of fix if the culture secretary overturned the express findings of an independent, specialist competition body taking its decisions in the national interest? Luckily he will probably be spared such a cruel choice.

The arguments for an additional threat to media plurality in the UK beyond that posed already by Rupert Murdoch are actually quite weak.

Murdoch already has effective control of a television service he built from scratch  – he has also invested hundreds of millions in the UK newspaper industry when not so many people were interested in doing so. Murdoch will also have to raise perhaps as much as £9 billion to complete his purchase.

As for Sky News and plurality of voice, the UK’s first 24-hour television news channel may be a bit flighty at times but has remained firmly in the UK television news tradition and has never been a mouthpiece for Murdoch interests.

‘Rupert Murdoch is too big’ and ‘I don’t like him’ are not arguments that will cut the mustard at the Commission.

Two factors will worry the Competition Commission as it wrestles with intangibles such as where the public interest lies and what constitutes plurality of voice. Would total Murdoch control of Sky News change its character – after all we only have two non-stop domestic television news channels in the UK?

And would total control of BSkyB lead to joint Sky-newspaper subscriptions? There is actually little to prevent that happening at the moment if it were a straight commercial deal.

The Competition Commission could limit the use of loss leaders in this way – something that would damage rival publishers – and have the matter monitored by either Ofcom or the Office of Fair Trading.

As for Sky News there is no point seeking voluntary undertakings. Murdoch has a history of overlooking such devices. The good news is if Murdoch were to turn Sky News into a British version of Fox, the audience would melt. It would be extremely bad for business.

All of which means that before this year is out Hunt will be in the relatively comfortable position of being able to accept a Competition Commission go-ahead for the takeover, complete with any conditions they will recommend.