'Independent' trust for Sky News under Murdoch plan
Rupert Murdoch is considering setting up an independent trust to manage Sky News to get his takeover of BSkyB past the regulators.
The move is an attempt to persuade ministers that the media mogul would not interfere with Sky News' editorial integrity if his News Corporation empire took full ownership of BSkyB.
Critics of his planned merger have voiced concerns that Sky News could end up being turned into a British version of his controversial Fox News channel in the US.
Under the plans, he could set up a board of trustees to safeguard Sky News's editorial independence.
However, whether such a move would be enough to pacify opponents is the subject of urgent behind-the-scenes discussions. Similar boards were installed at the Wall Street Journal and The Times newspapers when they were purchased by Murdoch.
City analysts today dismissed the idea of a sale of the loss-making news channel because of a lack of buyers.
His News Corp is privately exploring "a range of options and remedies" with Culture Secretary Jeremy Hunt in a bid to get swift clearance for its controversial £8 billion purchase of Sky. These could include a sale of the Times and Sunday Times newspapers. Sources close to News Corp have played down the suggestion.
Opponents of the deal were quick to say an independent trust for Sky News would not go far enough. A spokesman for the alliance of media groups campaigning against the deal said such a divestment of Sky News would not be an effective remedy.
Regulator Ofcom and many rival media groups have urged Hunt to launch a full Competition Commission inquiry into Murdoch's bid to buy the 61% of BSkyB he does not own.
Opponents such as the Daily Mirror, Daily Mail, Daily Telegraph, The Guardian, BT and Channel 4 argue the deal would mean News Corp would be too dominant in the UK.
News Corp also owns The Sun, publisher HarperCollins, movie studio 20th Century Fox and social website MySpace. But Hunt could waive any probe and give News Corp the green light so long as he is satisfied that the takeover will not reduce the plurality of news providers in the UK.
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Numis Securities analyst Paul Richards said he did not think the takeover raised plurality issues but added: "If News Corp decided to get a deal done more quickly, it is possible that they might agree to a divestment of Sky News. The difficulty is Sky News is heavily loss-making. Sky News is certainly a sustainable business within BSkyB. It is difficult to see who else could afford to run it. ITV closed down its news channel."
Sky News reportedly loses £30 million-£40 million a year.
David Babbs, executive director of free speech pressure group 38 Degrees, criticised the apparently secret negotiations between News Corp and Hunt: "It's a really questionable and anti-democratic way of conducting this process when Ofcom have suggested a Competition Commission investigation."
