Watchdog to probe BSkyB stake?
Updated on 27 April 2007
The Office of Fair Trading and Ofcom have both raised concerns over BSkyB's 17.9 per cent stake in commercial broadcaster ITV.
Meanwhile, media regulator Ofcom warned that the shareholding also raised public interest issues over the provision of news on TV and other media in Britain. Now the Trade and Industry Secretary Alistair Darling has a month to decide whether to take it further.
Sir Richard Branson had planned to merge ITV into his Virgin Media broadband-to-mobiles empire, but Murdoch effectively blocked that happening when BSkyB snapped up the stake.
ITV was meant to be the missing part of the jigsaw that makes up Virgin Media. Branson was apparently furious when Sky bought that blocking stake, saying Mr Murdoch was a "threat to democracy".
It's exactly where New Labour didn't want to be, caught between Sir Richard Branson and Rupert Murdoch - billionaires vying to control Britain's media landscape.
The question now is whether Sir Richard is ahead again after two regulators ruled against Sky's move.
Background to the deal
- BSkyB buys 17.9 per cent stake in ITV for £940m on 17 November 2006. The maximum it is allowed to own is 20 per cent.
- At the same time, NTL - whose largest shareholder is Sir Richard Branson - is planning a merger with ITV, which rejects the deal. Virgin Mobile operations have since merged with NTL to create Virgin Media.
- Separately, ITV lures Michael Grade from the BBC to take up the post of Chief Executive, tasked with turning around the ailing broadcaster's fortunes.
- The Office of Fair Trading is called on to investigate BSkyB's stake, and whether it has resulted "in a substantial lessening of competition" within the TV sector.
- The Department of Trade and Industry asks media regulators Ofcom to assess whether the case raises public interest concerns. BSkyB is 39 per cent owned by Rupert Murdoch's News Corp., which also owns the Sun and Times newspapers.
- Ofcom and the OFT have now sent their views to Trade and Industry Minister Alistair Darling, who will announce by 26 May whether he wants the issue referred to the Competition Commission.
