Ed McRandal: Could ruling against Murdoch lead to less, not more, media plurality?

Ed McRandal is a former employee of a Conservative cabinet minister who now acts as a political adviser for a trade body.  He writes in a personal capacity.

Rumours are rife that in order to facilitate a bid to up his stake in BSkyB,  Rupert Murdoch will sell off Sky News.   Papers have reported that in order to comply with any unfavourable ruling, Newscorp will rearrange its assets, jettisoning Sky News and instead investing into the profit making element of BSkyB.

Thus far, the whole debate surrounding the Murdoch buy-out has largely focused on the impact on media plurality, with many (notably The Guardian) arguing that Murdoch acquiring more of BSkyB would allow him to dominate the news agenda.  However, if Murdoch does sell off Sky News, the ramifications to UK broadcast media could be far worse.  Why?  Because Sky News (and 24-hour news in general) constitutes a commercially toxic asset - with Sky News making an annual loss of circa £30 million.

The simple question is, if Murdoch does decide to sell, who will buy Sky News?  Who would have an incentive to absorb such losses?   Sky News benefits Murdoch because it raises the profile of BSkyB as a general media outlet, creating the impression that Sky as a broadcaster is essential to the fabric of UK television - providing all facets of your TV watching needs.    Now, unless the BBC bought Sky News (obviously not going to happen) I see no other provider who would gain the same advantage.

But, as is often pointed out, there are often a number of rich backers who are willing to pump money into the British media- Alexander Lebenev’s acquisition of the Evening Standard and Independent for instance.  But would Sky News provide the same benefits as snapping up print media?  I doubt it.  Whilst newspapers are free to say what they like, the broadcast media is not - having to comply with a strict set of guidelines which bind it to impartiality.  Consequently a Lebenev figure would not be able to use Sky News as a portal to further their political beliefs, or at least certainly not to the extent where such expenditure would be justified.

So, if we accept this danger as true - and the closure of the ITV News Channel suggests it is - what are the realistic future options for Sky News?  They are twofold; either the channel goes the same way as ITV’s 24-hour news channel and closes, or it cuts its budget and services - thus making it more profitable to any potential owner.  Either of these options would be a disaster for British broadcast media.  Sky News is essential to providing competition to the BBC and driving forward a news agenda to inform and hold politicians (and Peter Andre) accountable.  If Sky News was to close or roll back its coverage, the UK broadcast map would be severely depleted - decreasing, not increasing, media plurality.