Rupert Murdoch to dispose of Sky News for bid approval

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Media captionWatch: Peston on what the decision means for News Corp's bid for BSkyB

Rupert Murdoch's News Corporation has offered to dispose of most of the Sky News channel to allay concerns about the planned take-over of all of BSkyB.

News Corp would either sell outright, or else separate off, the news channel to allay concerns raised by regulator Ofcom about media plurality.

The BBC's Robert Peston understands it is likely to be enough for the BSkyB takeover to win government approval.

That could come later but ministers may still want a public consultation.


One possibility is that a demerger of Sky News to BSkyB's existing shareholders has been agreed.

That would mean News Corp retains its 39% minority stake in the channel, while taking over 100% of the rest of BSkyB.

"Some will see that as a U-turn," said Mr Peston - as Culture Secretary Jeremy Hunt had promised to heed the advice of regulator Ofcom, who wanted the deal referred to the Competition Commission.

"This deal can be seen as not changing News Corp's relationship with Sky News, because News Corp would continue to own 39% of Sky News, even if its holding in the rest of BSkyB goes up to 100%," he added.

"Or, if you are that way inclined, you could see it as News Corp selling a majority stake in Sky News."

The European Commission has already ruled there is no reason to oppose the takeover on competition grounds.

However, Ofcom had raised concerns about the impact on media plurality and choice of news if News Corp controlled Sky News in addition to the newspapers it currently owns - the Sun, the News of the World, the Times and the Sunday Times.

'Smoke and mirrors'

In order to make a sale of the news channel viable, the BBC understands that Mr Murdoch has also agreed to provide it with a long-term contract that will have the effect of subsidising it for many years.

"If the purported remedy leaves Sky News dependent on News Corporation for its money that will not be true independence," said a spokesman for an alliance of media groups opposed to the takeover.

"Smoke and mirrors will not deal with the plurality concerns expressed by so many," added the group, which includes the Guardian, Associated Newspapers, Trinity Mirror and the Telegraph.

"A lot hangs on the fine print of the offer from News Corporation. We will oppose any unsatisfactory arrangement and consider all legal avenues available to us."

Even if the deal gets the nod from Mr Hunt, News Corp has yet to gain approval from BSkyB's board.

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