News Corp. May Sell Sky News to Seal BSkyB Deal

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U.K. regulators have expressed concern about news diversity if the entertainment giant buys full control of the U.K. satellite TV operator.

NEW YORK – Rupert Murdoch’s News Corp. has told the U.K. government that it may be willing to make a concession, such as selling BSkyB's Sky News, to seal a deal to take full control of U.K. pay TV operator BSkyB, the Financial Times reported Thursday.

U.K. broadcast regulator Ofcom has recommended that the government refer the takeover bid to the Competition Commission, arguing that it could reduce the diversity of news provision, which could cause a lengthy regulatory review, according to the paper.

Britain’s business secretary Vince Cable recently told undercover reporters that he has “declared war” on Murdoch and that he expects to block News Corp.’s bid to take over the company, in which it already owns a 39 percent stake.

Culture secretary Jeremy Hunt told members of parliament on Thursday that the BSkyB decision could have real repercussions.
“This is not a decision about Rupert Murdoch or his business,” Hunt said, according to the FT. “It’s a decision about whether a specific transaction is going to affect plurality.”

A News Corp. spokeswoman in New York declined comment.

Sky News is losing 30 million-40 million pounds a year, according to the FT. In 2006, News Corp. considered a merger of Sky News with ITN, the news provider for Channel 4 and ITV, but discussions didn't lead to a deal, it said.

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