MARTIN WOLF : WHY NEWS CORP SHOULD BE BLOCKED FROM TAKING OVER BSkyB / THE FINANCIAL TIMES EXCLUSIVE COMMENT ( A MUST READ )

Why News Corp should be blocked from taking over BSkyB

ft.com/wolfexchange

October 19, 2010 11:01am

Should we view the media market as similar to the market for baked beans? Or should we view it, instead, as being unique? If we accept the latter perspective, what implications might this have for ownership of media outlets? These are hugely important questions for the future of democratic societies.


What has made them of immediate relevance to the UK is the bid by Rupert Murdoch’s News Corp for the remaining 60.9 per cent of BSkyB. This would give the company control over the country’s biggest commercial broadcaster, with 35 per cent of television revenue (including the BBC), along with the 37 per cent of national newspaper circulation it already controls. This situation raises profound questions. It would raise those questions, in any case. But the fact that Mr Murdoch is the actor makes them more pressing.


In making that judgement, I am influenced by having spent five months in the US over the last two years and watching the impact of Fox on public debate in that country. Fox demonstrates the business genius of Mr Murdoch: the mixture of popular entertainment with right-wing populism has proved extraordinarily successful. But it has also helped destroy the middle-ground in American politics and made coherent discussion of policy alternatives nigh on impossible.


Now turn to the case of the UK. Walter Bagehot, the great 19th century British journalist, distinguished between what he called the “dignified” parts of the constitution (by which he meant those that had symbolic importance, such as the monarchy) and the “efficient” parts of the constitution (by which he meant those that ensured things were done, such as the government and the House of Commons). It would be an exaggeration to state that Mr Murdoch is the efficient part of the British constitution and the government the dignified part. But it would not be quite as big an exaggeration as I would like.


This is why the market for media and baked beans markets have such a different significance: the media do not just provide information; they mould opinion and so shape the public debate. They are the engine of democracy. The ownership of media is a source of power, as Silvio Berlusconi has demonstrated conclusively. Just as Mr Berlusconi is the most powerful private citizen in Italy, so Mr Murdoch is the most powerful private individual in the UK and, in my view, in the US, as well. The Republican revival we see today in the US owes much to the influence of Mr Murdoch’s media.


Anybody who cares about the future of democracy should want a diverse media, by which I mean not many titles, but a media that no one individual or company can dominate. Yet that is precisely what the UK now risks with the planned takeover of BSkyB by News Corp. As the FT argued in an editorial on the subject, Mr Murdoch “could bundle his newspaper websites with Sky subscriptions, potentially giving him a big advantage as news migrates to an online subscription model.” Already far and away the most powerful force in UK media, Mr Murdoch could become still more potent, as competitors collapse.


I will, accordingly, judge Vincent Cable, the UK’s Liberal Democrat secretary of state for business, by whether he is prepared to take on this takeover. The law allows him “to ensure the existence of a range of media voices”. He should do so. But, in my judgement, preventing the takeover of BSkyB by News Corp does not go far enough to redress the imbalances that now exist in British media.


I would argue that there is a strong case for much tougher control over media ownership. No private individual should be so powerful that politicians tremble before him. That is not democracy. I would argue, therefore, that no individual or company should own both national newspapers and national TV stations. I would also suggest that no individual should own more than, say, two national newspaper titles or more than 10 per cent of national readership (whichever gives the higher share of the market). I cannot see why laws to this effect should not be passed: they would be simple and clear. They would make obvious the aim, which is to avoid putting too much political power in the hands of any one private organisation or individual.


Furthermore, having spent substantial time recently in the US, I have a much better appreciation than before of the case for having a strong public-service broadcaster. The BBC forces UK politicians to engage in a national conversation. It would be impossible, for example, for Conservatives to argue for lower taxes, offer no credible plans for reduced spending and yet insist that they care about the size of the fiscal deficit. But that is what the Republicans are now doing. Such economic illiteracy is more difficult if politicians are regularly forced to make their case before impartial TV journalists. I shudder to think what British public life would become without the BBC.


I recognise that these approaches are irrelevant to the US: there are few national newspapers; and there will never be a BBC. I understand, too, that no British government is willing to take the issue of concentration of media ownership on. But I have no doubt of one point: the media do not merely reflect the society they serve; they shape it. Those who believe in democracy should not allow any one individual or organisation a dominant voice in shaping the future of their country.