Competition Watchdog's Nod to Murdoch's ITV Spoiler

21 November 2006

LONDON: Monday's indication by the UK Office of Fair Trading that it is unlikely to intervene in Clan Murdoch's weekend swoop on the nation's largest commercial broadcaster ITV, will raise few eyebrows around London's media and political parish pumps.

In governmental circles it is not thought prudent to defy the Murdoch family, whose 35%-plus command of UK newspaper readership and 8.25 million satellite TV viewers might prove an impediment to the administration's re-election in 2007.

Last Friday evening, NewsCorp-controlled satellite TV company BSkyB announced it had acquired a 17.9% stake in ITV [WARC News: 20-Nov-06], a move that effectively sinks NTL's chance of a negotiated takeover of ITV.

Comments the OFT: "[We do] not believe there is enough information to suggest that a merger situation has arisen at this stage." Thereby implying that there is no case to investigate at the present time.

Media regulator Ofcom is also astride the fence, saying it would check to see whether a "change of control" had taken place at ITV. An affirmative decision would trigger a broader inquiry, although few think that likely.

NTL ceo Stephen Burch, however, is decidedly not in neutral mode. He accuses BSkyB of "anti-competitive behaviour [and exerting] material influence on ITV and Freeview".

Sky "should not be permitted to do this," he said, adding that the satellite broadcaster wants "to have an unreasonable and unfair grip on media in this country".

A curious line of reasoning, believe some observers, given that a successful deal with ITV could be said to confer exactly the same advantage on US-owned NTL which recently absorbed its sole UK rival, Telewest.

As a bland BSkyB spokesman pointed out. "Sky's investment in ITV is a non-controlling stake. NTL wants to buy ITV outright, a deal that would in turn raise serious competition issues."

Good to know that Clan Murdoch remains the watchful guardian of fair competition in the global media business.

Data sourced from The Times Online (UK); additional content by WARC staff