Claire Enders, founder of Enders Analysis wrote to business secretary Vince Cable arguing that News Corp's proposed purchase of the 60.9 per cent of BSkyB it does not own would risk "a reduction in media plurality to an unacceptably low level".
In the 20-page document, published in full by BeehiveCity, Enders raises her concerns under Department of Trade and Industry guidelines which state "media public interest considerations" can be applied to mergers involving newspapers or broadcast media enterprises, or to cross‐media mergers of newspaper and broadcast media enterprises.
The submission includes a summary of the television and newspaper market up to 2009 and Enders' projections for the markets in 2014, when, she forecasts, News Corporation will continue to be a strong player.
The report, which was sent by Enders in July, calls on Cable to issue an intervention notice, arguing that the loss of independent BSkyB shareholders will give News Corp greater opportunity to influence the editorial coverage of Sky News and other channels, "tacitly or otherwise":
"Why does News Corp's purchase of the remaining 60.9 per cent of BSkyB make the situation arguably 'worse' than it already is today? News Corp already owns more media in the UK than it is permitted to own in the US and Australia, the other two main markets for News Corp products, and the UK media market is often characterised as highly concentrated as a result.
"By moving from a minority shareholder interest to full ownership, News Corp will gain important financial advantages – the pooling of financial resources and tax obligations across the new entity – which will improve its ability to compete, notably in the newspaper market where we have noted the weak position of most newspaper publishing groups. In addition, the group will acquire several important new strategic opportunities.
"The 2006 investigation by the regulators of the BSkyB purchase of ITV shares found no evidence of proprietor intervention in Sky News under its current shareholding structure, but this could change under full ownership. Today, the presence of strong independent directors of the company, many of whom have substantial external reputations, helps protect the independence and diversity of what appears on screen, particularly on news programmes."
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