In the age of Netflix, Rupert Murdoch deserves to own Sky

PUBLISHED: 16:54 12 January 2017 | UPDATED: 17:06 12 January 2017

Rupert Murdoch

Rupert Murdoch

2013 Bloomberg

Media mogul Rupert Murdoch should be able to control Sky now that digital players - Amazon Prime, Facebook, Netflix and Hulu - have changed the media landscape

“The thing about Rupert is that he polarises opinion, you either deify him or demonise him” - So advised a veteran boardroom confidant of Rupert Murdoch some years ago when I worked as a Murdoch executive.

True? “Only up to a point, Lord Copper.”

There are those of us who remain admirers, but not uncritical ones, and who wouldn’t rank themselves at either the deity or demon end of the Murdoch media spectrum.

Currently, of course, the demonic tendency who successfully - and justifiably - derailed the Murdoch bid to take complete ownership of Sky five years ago amid the phone hacking scandal fallout are out in force again as D-day looms for culture secretary Karen Bradley on whether to refer their revived bid to media regulator, Ofcom, and potentially, the Competition and Markets Authority.

While the heat is considerably less intense now compared to when the phone-hacking revelation surrounding murdered schoolgirl Millie Dowler surfaced, nevertheless more than 100,000 people have signed various petitions demanding the government order a referral.

Any day now Karen Bradley must announce her decision. And, although it’s strictly the preserve of the relatively greenhorn secretary of state acting in a quasi-judicial role, no one can seriously doubt that Prime Minister Theresa May will be involved in the process behind the scenes.

Naturally enough, a number of Labour and Liberal Democrat MPs, and a few Tories too, have pressed - so far without success - the PM to say whether she discussed the Sky bid when she briefly met Rupert Murdoch in New York shortly after taking office.

Before long, she may well be advised to break her silence.

While former Labour leader Ed Miliband, current deputy leader Tom Watson and Vince Cable, business secretary at the time of the Murdochs’ aborted 2010 deal, have shouldered arms again to condemn the new £18.5billion bid and paint it as a “genuine threat” to media plurality in the UK.

Cable said: “Nothing has materially changed and if this takeover is allowed to go ahead there would be similar concerns raised about media plurality in the UK. The way Theresa May’s government deals with this is a test of their independence from the influence of large proprietors.”

So, “nothing has materially changed’”, Vince? Either he is very naïve or “wilfully blind” (a phrase Rupert and James Murdoch know only too well).

Netflix, Amazon, BT, Liberty Global’s purchase of Virgin Media and more has changed everything. In football parlance, the goalposts have moved and the whole game has changed.

So this is where, as a lifelong (non-Corbynista) Labour supporter, I’m about to upset quite a few friends in politics and beyond by backing the Murdoch bid to acquire the 61% of Sky they don’t already own.

In short, Messrs Miliband, Cable, Watson and their petition-organising supporters at campaign groups Hacked Off, Avaaz and 38 Degrees are fighting yesterday’s battle in a revolutionised media landscape in which the Murdochs are relatively reduced figures.

While I defend their right to protest and petition, reality suggests that the vast majority of the public are no longer bothered by the new offer. That’s partly-explained by the simple passage of time since the Dowler scandal, but also, I’d contend, by the public’s inherent acceptance that digital age technology has revolutionised how they view and even think about television. It’s a reality that those campaigners historically hostile to Murdoch, no matter how sincere, tend to underplay.

In truth, the grounds for Karen Bradley to trigger an Ofcom investigation look somewhat shaky and far from strictly necessary. That said, the pressures of politics and petitions and partiality accusations will almost certainly result in her making the referral under the “public interest concerns” laid out in Section 58 of the Enterprise Act 2002.

The only “concern” to realistically apply now is the issue of media plurality, despite the efforts of the anti-Murdoch lobby to revisit the phone hacking scandal as evidence that Murdoch pere et fils are not “fit and proper” persons to hold a broadcast licence.

If, as she surely will, Bradley goes the Ofcom route, expect complaints, and a possible challenge, from the Murdoch camp arguing (correctly) that the media landscape in 2017 is a different, unrecognisable world to 2010, given the proliferation of entertainment players like Amazon and Netflix, BT’s ferocious challenge on the sports right front, the overwhelming growth of Facebook and other social media giants and Google as a news aggregator.

I suspect, however, that the likelihood of an Ofcom referral was always factored in to Rupert and James Murdoch’s tactical thinking when they relaunched their Sky bid, using its 21st Century Fox entertainment giant, untainted by the phone hacking scandal that engulfed its now separated newspaper publishing arm.

Similarly, I’m sure their high-powered legal advisers have expressed great confidence that there is little prospect of the regulators finding legitimate grounds to block the deal or even impose conditions such as ringfencing Sky News.

As a regular commentator for Sky and the BBC on media-related issues and a longstanding judge at the Royal Television Society awards, I’m an admirer of both as news providers and it’s worth mentioning that the vast majority of Labour and Liberal Democrat politicians I know share that admiration of Sky’s multi-award winning news channel.

And the UK’s strict Ofcom-enforced impartiality broadcasting rules must surely silence those siren voices struggling to suggest the Murdochs’ “ambition” is to turn Sky into a British version of Fox News. If in doubt, witnesst during the referendum campaign how Sky was regularly as tough, often tougher, questioning Nigel Farage as the BBC and its coverage of Donald Trump has been fittingly, forcefully forensic.

For those lobbying against the Murdochs’ current bid, there are other factors that don’t play into their argument. Among them the not inconsequential absence of any Ofcom fit and proper intervention when James Murdoch was reinstated as Sky’s chairman in January 2016. If not then, why now? Similarly when NewsCorp (the newspaper publishing arm chaired by Rupert himself) recently bought the TalkSport/TalkRadio operation, there was no political outcry, Ofcom reaction or petitions.

And when Ofcom investigated back in 2012, let’s not forget they concluded Sky remained a “fit and proper owner of a broadcast licence” even as they were highly-critical of James Murdoch’s handling of the phone-hacking scandal. No one can seriously doubt that the Murdochs mishandled the phone-hacking scandal and its fallout for far too long and warranted the roasting they received from parliament, Ofcom and assorted judges.

But that was then and now is now and I, for one, can’t buy into the argument that it provides a realistic case in 2017 to block the 21st Century/Fox deal against the backdrop of today’s digitally transformed media universe.

That transformation is underscored by the fact that while Sky spends a massive £5billion a year on content (including its Premier League coverage), it now faces a Netflix budget TEN times that and Amazon, with even deeper pockets, set to roll out its Prime video service (new home to Jeremy Clarkson and co’s Grand Tour) across 200 countries and dwarf the spending power of its rivals. Apple has ambitious expansion plans too.

With newspaper circulations sliding inexorably, and Sky under unprecedented pressure from those burgeoning Amazon, Netflix challenges, the media plurality threat debate looks decidedly weaker than when Ofcom looked at the combination of the Murdochs’ newspaper and broadcasting interests back in 2010.

But, as David Elstein, the former Channel 5 CEO, forensically flagged up last month in an article on the Open Democracy UK website, Ofcom’s data-gathering methodology at the time now looks seriously flawed and exaggerated the Murdoch market share by some distance anyway.

Essentially, however, the core issue at the heart of the 21st Century bid for Sky has little to do with news. It’s about the understandable business logic of the Murdochs wanting to fully own a pioneering broadcast company they created and which the public at large have long assumed they owned anyway and which, to all intents and purposes, they largely controlled.

Conservative estimates suggest the Murdochs have lost at least £500m on Sky News over the years which, if nothing else, says something about Rupert’s passion for news on-air and in-print, irrespective of whether you share his political views. Who else, I suggest, would have kept The Times going, and invested heavily in it, when many NewsCorp boardroom figures in New York have long urged “getting out of the dead tree business” altogether?

Indeed, there are some who’d even now rather see the company pull out of Sky and concentrate investment in the US and Asia rather than the UK and Europe.

Let’s not forget either – I certainly doubt Theresa May has as she braces herself a tricky tightrope walk over Brexit – that the Murdoch’s Sky investment in the UK and Europe has made the UK the hub of the European satellite TV industry, creating more than 100,000 jobs. With James Murdoch contending that many thousands more jobs will be created and billions more invested in the UK if this deal gets the green light.

Technically, a 21st Century Fox takeover of Sky would have to be submitted to EU competition authorities, but — given that they comfortably cleared Sky consolidating its UK, German and Italian satellite operations — it’s hard to imagine they’d reverse their opinion now.

With the dangers of Brexit sending out a clear signal over the confidence-boosting importance of major corporate investment in the UK, the voices raised against it are overplaying the demon Murdoch card. And you don’t have to subscribe to the deity alternative to see that the upside of clearing 21st Century’s bid for Sky far outweighs the down.

Everything else is a storm in a satellite dish.

MURDOCH’S MEDIA: TAKING ON PUTIN, TRUMP AND BREXIT

“The regime of Vladimir Putin has long made known its character through its actions. It has assassinated political opponents, murdered journalists, jailed dissidents, repressed homosexuals, shot down a civilian airliner, altered the boundaries of Europe through force, and enabled Bashar al-Assad to prevail in a pitiless assault on Syria’s people” ... so began the New Year’s Eve leading article in Rupert Murdoch’s Times.

It was the third excoriating Times’ leader in a few days attacking Putin, supporting President Obama’s stand on cyber-hacking and condemning president-elect Trump’s “insouciant” approach. Insouciance that seemingly runs to favouring Vladimir Putin’s cyber-hacking denials over the assertions of America’s security services charged with keeping the country safe.

The Times’ leaders on Putin and Trump merit noting in the context of the current controversy surrounding the Murdoch bid for Sky. While The Donald’s festive season texting tsunami included praise for Fox News as he attacked CNN and NBC, his petulant potshots at his media enemies could easily have included The Times.

It’s also significant that Murdoch’s Wall Street Journal, along with the New York Times and New York magazine, has been at the forefront of those mainstream print titles probing the president-elect’s conflict of interest business issues, some of his more dubious administration appointment plans and higher-risk policy ideas.

For those on both sides of the Atlantic who have been inclined to see The Donald and The Rupert as ideological twins, it’s a healthy reminder that all is not as it sometimes seems. While, in the context of plurality of opinion within the Murdoch empire, it’s worth noting too that, unlike its stablemate The Sun, the Times not only came out in favour of Remain but regularly continues to focus on the dangers associated with Brexit.

I’d even hazard a bet that President Trump will find Fox News a significantly less obliging platform in 2017 than Candidate Trump did in 2016.

Paul Connew is a media commentator, broadcaster and one of the authors of ‘Last Words? How Can Journalism Survive the Decline of Print?’ being published this month by Abramis. He has also worked as an executive for and against the Murdoch empire on both sides of the Atlantic

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