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News Corp. To Spin Off Sky News For BSkyB Takeover

03/ 2/11 04:31 PM ET   AP

Murdoch

LONDON — British broadcaster BSkyB plans to sell its Sky News division to clear the path for a full takeover by Rupert Murdoch's News Corp., the BBC reported Wednesday.

The BBC's Business Editor Robert Peston, who did not cite a source, said the move would likely enable Murdoch to win regulatory approval for a buyout which has rattled Britain's political establishment.

British Sky Broadcasting Group PLC and Britain's culture ministry, which has the power to refer Murdoch's bid to anti-monopoly regulators, both declined to comment on the report.

Murdoch's News Corp. already owns just under 40 percent of BSkyB's shares but wants full ownership to in a bid to get access to the entirity of the pay-television company's profits, which came to 407 million pounds ($648 million) in the last half of 2010.

Murdoch has considerable influence over the U.K. media market through his ownership of top-selling tabloid newspaper, The Sun, as well as The Times, The Sunday Times and the News of the World. The prospect of the right-wing media tycoon gaining 100 percent of BSkyB has rival outlets, many left-leaning politicians and media watchers worried.

Some argue that full ownership would allow the right-wing media tycoon to influence the editorial content of Sky News, one of the country's two main 24-hour news channels. Although not watched by as many Britons as the BBC, Sky News carries considerable influence and was instrumental in pressuring party leaders to participate in Britain's first-ever televised debates last year.

The BBC is among a coalition of British media players demanding an inquiry by Britain's Competition Commission, expressing concerns about its impact.

The sale of Sky News, particularly if its near-term financial future were guaranteed, would work to assuage at least some of those concerns – although worries about cross-promotion and the Murdoch empire's massive budget remain.

That decision remains down to Jeremy Hunt, the country's culture secretary. His office has declined comment.

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Filed by Jack Mirkinson  |