UK Government Orders Murdoch to Sell ITV Stake

29 January 2008

LONDON: The political equivalent of Krakatoa is expected to erupt over the UK government today (Tuesday), engulfing it in the lava of Murdochian wrath as business and enterprise secretary John Hutton formally orders NewsCorp's local satellite monopoly BSkyB to reduce its 17.9% stake in ITV to less than 7.5%.

The order to sell, recommended by the Competition Commission in December has, until today, been gathering dust in Hutton's in-tray as the unfortunate politico dithered between the devil of the anti-Murdoch faction and the deep blue sea of the media mogul's enmity.

The requirement to slash the stake – acquired for £940 million ($1.87bn; €1.26bn) in November 2006 as a wrecking tactic to scuttle the mooted merger between ITV and Virgin Media – will cost BSkyB dear, given that ITV's stock value has plunged 47% since the acquisition.

ITV "warmly welcomed" Hutton's decision: "We believe this decision is in the best interests of the overwhelming majority of our shareholders," the company said in a statement.

Whereas the temperature of BSkyB's response hovered around freezing point: "The company will give careful consideration to the announcement and confirm any further steps in due course," it said.

However, the government is expected to sugar the pill by extending the period in which Sky's holding must be reduced, from the recommended three months to nine.

Given Clan Murdoch's 35%-plus dominance of UK newspaper readership, many observers think it unlikely the Brown administration would have been willing to risk offending the mogul had there been the prospect of a general election before 2011.

Data sourced from; additional content by WARC staff