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Stephen Glover: Annual profits of £878m – and now they're all his

Friday 04 March 2011 01:00 GMT
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Where Rupert Murdoch is concerned, it is hard to have a rational debate. There are many in politics and the media who have made up their minds that he is a force for evil. They will quickly conclude that the deal on BSkyB unveiled yesterday will significantly increase his media power and the sway he has over British politics.

Already some are saying the agreement over Sky News, whereby Mr Murdoch will be unable to increase his stake of 39 per cent for at least 10 years, is not worth the paper it is written on. I disagree. Under the new arrangements the independence of the chairman and of a majority of non-executive directors will provide some counterbalance to Mr Murdoch. It is very difficult to see how he will be able to increase such little actual influence over Sky News as he already enjoys and he may well have even less.

Any thought that he might turn Sky News into a British version of the wildly right-wing Fox News in America is now out of the question. The neutrality of Sky will continue to be enforced by impartiality laws to which the Coalition is committed. Mr Murdoch will provide what Mr Hunt called a "substantial revenue stream" to keep the loss-making Sky News afloat, as he has been doing. In essence we will get more of the same, a generally excellent and non-partisan news channel.

Mr Hunt is to be congratulated for having preserved the independence of Sky News. However, there is no disguising that Mr Murdoch's commercial power will greatly increase if BSkyB's other shareholders agree terms, as they are surely very likely to do. He will then own all of a very profitable company. Its most recent annual profits were £878m.

News International is already the biggest newspaper group in Britain. Once it has absorbed BSkyB its profits will be many times greater than those of the next biggest newspaper group, Daily Mail and General Trust (DMGT), whose most recent yearly profits were £201m. Its revenues will also comfortably exceed those of the BBC.

That explains why a diverse collection of media groups including the BBC, DMGT, Telegraph Media Group and Guardian Media Group have so vociferously opposed Mr Murdoch's takeover of all of BSkyB.

However, greater commercial clout need not translate into greater political power or a less pluralistic media. News International's papers are all selling significantly fewer copies than they were five years ago.

My advice to querulous newspaper groups (who are intending to challenge the deal) is to have more confidence in the quality of their journalism and to be less intimidated by Mr Murdoch. News International's mishandling of the News of the World phone hacking allegations suggests weak management, as does its seeming failure to introduce profitable newspaper paywalls. Mr Murdoch, 80 in a few days' time, is by no means the creative or journalistic power he was.

The BBC has more to fear because the buoyant part of an enlarged News International will be BSkyB. The Corporation long ago ceded its pre-eminence in sports coverage to Sky Sports. But it still produces more and better drama, though increasing competition from BSkyB might serve to make it sharpen up its act.

There is no doubt, though, that David Cameron's pre-election courting of Rupert Murdoch and their enduring relationship will make many people more sceptical of the agreement than they would otherwise be. It was foolish in the extreme for the Prime Minister to have dinner with Rupert Murdoch's son James, chairman and chief executive of News Corp, and Rebekah Brooks, chief operating officer of News International, in Mrs Brooks' house over Christmas.

In other words, Mr Hunt's protestations that his script has not been written by his leader will be widely disbelieved, though he may well be telling the truth. Many people will not look at the detail of the deal but at the circumstances that surround it, and they will probably conclude that it is much more favourable to Rupert Murdoch than it is. Ageing and increasingly ineffectual though the media mogul may be, he continues to cast his spell over British politics.

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