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BBC chief calls for scrutiny of BSkyB deal

By Ben Fenton
Published: October 7 2010 23:29 | Last updated: October 7 2010 23:39

Mark Thompson, the director-general of the BBC, has called on the government to intervene in News Corp’s
attempt to take full control of British Sky Broadcasting.

Mr Thompson, in an interview on US public service television, agreed there was potential for an abuse of power by
Rupert Murdoch’s UK companies if BSkyB, the UK’s biggest broadcaster by revenue, came under the same
ownership as News International, the country’s largest newspaper group.

The director-general has also agreed to join publishers of at least nine national newspapers in sending a letter to
Vince Cable, the business secretary, urging him to begin an investigation into the proposed bid, according to a
person close to the BBC executive board.

Mr Thompson told the Charlie Rose programme on PBS that the combination of BSkyB and News International,
parent of The Sun, The Times and other national newspapers, raised issues of “how you ensure plurality in the
system” and said those issues “should be looked at” by the government.

“If the two were combined, there might be a significant loss of plurality in our media market,” he added.

“We’re not saying there’s been a crime committed here. What we’re saying is – given the scale of the potential
ownership in the UK media – there’s a strong case for looking at it systemically and deciding whether or not
anything needs to be done to address the issue.”

Asked by Charlie Rose, his interviewer, if he were saying not that News Corp had done anything wrong but that
there was a “potential of an abuse of power”, Mr Thompson said: “I think that’s a good way of putting it.”

News Corp indicated in July it could pay 700p a share for the 60.9 per cent of BSkyB it did not already own,
valuing the satellite broadcaster at £12.3bn.

Independent BSkyB directors rejected the proposal but agreed to co-operate with their suitor to overcome potential
regulatory hurdles before trying to reach agreement on price.

A person familiar with News Corp strategy said: “It remains to be seen whether Mr Cable will make his decision
based on recent precedent and legal merits or be swayed by appeals from commercial rivals.”

As no formal bid has yet been submitted to European authorities, Mr Cable has had no legal basis to intervene.

However, an adviser to the coalition government said: “There is a realisation that if this is waved through, it will
give the impression of doing favours to Rupert Murdoch and the coalition wants to be, and to be seen to be,
scrupulously fair.”

Mr Thompson has agreed, on behalf of the BBC executive board, to sign a letter alongside senior executives of
Associated Newspapers, owners of the Daily Mail; the Telegraph Media Group; the Guardian Media Group; and
Trinity Mirror, owners of the Daily Mirror; among others.

According to three people with knowledge of its contents, the draft letter urges Mr Cable to step in because if Mr
Murdoch’s group had full control of the £5.9bn revenues and £949m cashflows of BSkyB it could threaten the
future of other press and television groups, which would reduce the diversity of news and comment in the UK
media.

The Financial Times exhorted Mr Cable to intervene in the News Corp move on BSkyB in an editorial comment
on September 19.

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