Three-D Issue 29: MRC and Avaaz keeps challenging Murdochs over Fox/Sky merger

Rupert Murdoch’s bid to take control of Sky News has hit several hurdles in the past few months. In September, the culture secretary Karen Bradley referred the 21st Century Fox’s £11.7bn bid to the Competitions and Mergers Authority (CMA) on grounds of both plurality and broadcasting standards – appearing to overrule Ofcom’s three month investigation which had come to the conclusion that it was possible to refer to the CMA on grounds of plurality only.

Part of the evidence that they are considering are the submissions by the Media Reform Coalition and Avaaz which prove an interesting object lesson in how academic research can have a potential impact on important decisions about media plurality.

The original MRC/Avaaz submission to the CMA, which included analysis of online and radio sources suggested that the reach and impact of News UK and Sky had been underestimated by Ofcom. This provoked a 93-page response from lawyers for Fox including two lengthy reports critiquing MRC/Avaaz’s research. The MRC/Avaaz researchers, led by Dr Justin Schlosberg of Birkbeck have since replied to this challenging their findings and highlighting key points for the Phase 2 inquiry.

Much of the debate has been around the definition of plurality and control. MRC replied that contrary to what was implied by Fox, the presumption of control principle in the context of this merger is based on evidence of control that is exercised and exercisable by the Murdoch Family Trust (MFT) in both Fox and News Corp. MRC believes that there would be a material increase in MFT’s control of Sky as a result of this merger.

The researchers said that must also be taken into account of not only Sky but the rapid growth of The Sun online and Storyful (the social media news wire service now owned by News Corp), as well as the amount of content generated by Sky that Global and Bauer radios use.

The CMA was originally due to publish interim findings in December with a full report to Bradley in February but this has now been pushed back to January and March respectively. The reason given for this is the fact there has been 12,000 submissions to the authority as well as face to face hearings.

But the detailed response by Fox to the MRC/Avaaz submission suggests that they were rattled by the evidence presented, including the submission of two reports (presented as independent although based on what appears to be identical secondary analysis of Ofcom’s respondent level data on multi-sourcing). As such, it presents a compelling argument for academics to engage in such pressing debates and understand that their work can have a significant impact.

At the time of going to press, Disney had just announced an agreement to buy the bulk of the 21st Century Fox business empire for a deal reportedly worth between $53-66bn. Remaining assets – including Fox News and the Fox TV business – will be spun off into a separate business New Fox, and Rupert Murdoch indicated he might seek to merge New Fox with News Corp in 2-3 years.

Posted by Einar Thorsen