Were there once two Monopolies and Mergers Commissions? One for Rupert Murdoch and one for everyone else?
Jim Chisholm, an advisor to some of the world's leading news media companies, looks at what James Murdoch's resignation as BSkyB chairman may mean for the Murdoch empire.
James Murdoch has stepped down from BSkyB
In the good old days there was a joke about “Why is there only one Monopolies Commission”. To which the response I recall was: “There’s not. There’s one for normal people, and one for Rupert Murdoch.”
I’ve never met Mr Murdoch, and News is the only major publisher in the UK, who I have not advised at some time, but up until the hacking debacle, I’ve always had a great admiration for him and his company. In the wider industry Rupert Murdoch enjoyed a reputation of being a decent if opportunist operator. As his interests have expanded he has attracted opprobrium for only doing what any ambitious media mogul would have done if they had had his ability. Sadly hacking has darkened what has otherwise been the most astonishing performance of any media player in the world.
Now James Murdoch has bowed to the inevitable by stepping down as chair of BSkyB and he was right to distance his timing from his departure from News International.
But behind this are some more interesting questions.
Firstly to examine the recent development: James remains on the board of BSkyB, and James Mockridge who succeeded him as Chairman of News International moves up to Deputy Chairman at BSkyB. This is not a climb-down
so much as a rearrangement of the chairs.
And there is the historical political perspective. The recent sad events aside, the Murdochs' power may have reflected their ability and agility, but it has also reflected successive governments’ acquiescence in News’ influence in the UK, from their acceptance of the acquisition of Times newspapers in 1981. At that time News’ share of UK daily newspaper sales increased from 27% to 30%, at a time when a monopolistic position was considered to be over 25%. Today the share is 36% (For the record total market circulation has fallen 22%, while News’ circulation has fallen by 8%). Along the way they acquired then closed Today, in a failed attempt to enter the mid market.
Now News also owns 39% of BSkyB, which carries 11% of UK TV advertising (to me a surprisingly low figure.) and around 7% to 8% of the total viewing audience of which news is far less than 1%. BSkyB’s news coverage is well
presented but rather thin and repetitive.
But BSkyB holds a massive share of the pay TV market, which is where the growth in broadcast media lies, and monopolises paid access sport, depriving many people from watching iconic sporting events.
Everyone is now focussing on, to quote OfCom, whether News Corp are “fit and proper” owners of what is largely, a subscription based, sports and entertainment service. They could easily jettison their news service, as has
been suggested, but it would only be financially viable if it was supported by another media organisation, which of course the other monopolies commission wouldn't allow!
To me a larger question is how government more effectively regulates media ownership, and particularly cross-media regulation, and specifically in the farce that restricts the UK's regional press. Simply going from Murdoch
worship to burning them at the stake answers the problems raised by hacking, but does not address the bigger picture.