City and media analysts agree that it’s almost certain News Corp will now get approval to buy the 61% of BSkyB it doesn’t own. The deal would cement Rupert Murdoch’s position as the most powerful media magnate in the world. Investec Securities, the investment bank, says it’s now 90% certain the deal will go ahead. Credit Suisse puts the likelihood even higher at 95%. BSkyB’s share price rose by 2% today in the wake of UK business secretary Vince Cable, the man who was supposed to have final veto over the deal, being stripped of his media powers. Brit TV and radio news bulletins have been about little else. Investment bank Nomura says Cable’s removal represents a “big step forward” for News Corp. Cable told 2 undercover reporters from the Daily Telegraph newspaper that he had “declared war” on Murdoch. Cable was supposed to be impartial when weighing evidence from media regulator Ofcom as to whether to refer the deal. News Corp’s bid will now be vetted by culture secretary Jeremy Hunt, a man known to be sympathetic to BSkyB. “It does seem to me that News Corp do control Sky already, so it isn’t clear to me that in terms of media plurality there is a substantive change,” Hunt said in June. Now that he’s got the quasi-judicial role, Hunt will want to be seen as impartial, media analyst Claire Enders tells me. “Jeremy will be at pains to avoid any bias. Ministers are supposed to put aside personal opinions,” she says. Enders, who set the hounds running when she first wrote to Cable detailing how Murdoch getting approval would harm media diversity, says she too is certain the deal will go ahead. Paul Gooden, media analyst at RBS, thinks that media regulator Ofcom will still refer the deal on to the Competition Commission, “but ultimately the deal is very likely,” he tells me.
The Telegraph Media Group has scored a spectacular own goal in secretly tape-recording Cable’s admission. It was the ringleader in getting rival media organizations including the BBC and Channel 4 to write to Cable in the first place, asking him to intervene. Rivals are afraid that Murdoch will use BSkyB’s £5.4 billion annual revenue to prop up other parts of his media empire that aren’t doing so well, such as newspapers. Now the Telegraph has made the bid going ahead much more likely.
Ironically, it’s 30 years ago next month that Rupert Murdoch announced he wanted to buy the Times of London and the Sunday Times. Then, as now, there was political pressure to refer the deal to the regulator. But Murdoch won out and went on to smash the print unions, changing the newspaper business forever.
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