Rupert Murdoch to sell Sky News in bid to win approval for BSkyB takeover

Published on Tuesday 1 March 2011 21:39

RUPERT Murdoch's News Corporation was last night close to agreeing the sale of Sky News to allay concerns about the media mogul's takeover bid for the remaining stake he does not own in BSkyB.

The move will reassure Culture Secretary Jeremy Hunt, who is now expected to approve News Corp's 7.5 billion bid for the 61 per cent of BSkyB, possibly today.

News Corp may keep a stake in Sky News similar to the current level of ownership it has in BSkyB, it was claimed.

The ministry responsible for vetting the deal said Hunt had not yet taken a decision. "The Secretary of State hasn't taken a decision. We will make an announcement in due course," a spokesman said.

On 25 January, the UK government gave News Corp a final chance to avoid a prolonged investigation into its buy-out of BSkyB.

Hunt said then that he would consider unspecified proposals put forward by News Corp to alleviate competition concerns before deciding whether or not to refer the proposed deal for a full, six-month competition inquiry.

Murdoch is seeking to consolidate a business that it helped to build, but has raised concerns he could gain too much control over the media and influence over public opinion.

The latest developments at BSkyB came as ITV chief executive Adam Crozier yesterday unveiled a near-trebling of annual profits - just ten months after he joined from the Royal Mail.

Shares in ITV jumped 9 per cent after Crozier and Archie Norman, the former Asda boss who replaced Michael Grade as chairman at the start of last year, promised to restore the dividend from July. The group benefited from a significant recovery in the television advertising market, which suffered its biggest downturn in history in 2009.

Results were also boosted by 40 million of cost savings.

The firm has identified a further 15m of cutbacks for the next 12 months.

Annual profits rose to 321m last year from 108m in 2009 as net advertising revenues for ITV's core broadcasting and online business recovered 16 per cent to 1.5bn.

The figures marked a dramatic turnaround for the company, which was forced to slash hundreds of jobs and wipe millions from its programme budgets after it slumped to a 2.7bn loss in 2008.

Crozier said a number of new dramas struck a chord with audiences last year, not least the period drama Downton Abbey.

Despite this, revenue at ITV Studios fell 13 per cent to 293m and the firm admitted it had plenty more to do to overhaul the division.

Crozier indicated that advertising income has continued to climb this year and he expects to end the first quarter up 12 per cent - slightly higher than the rest of the market, which is expected to rise by 11 per cent.

"The outlook into the rest of 2011 remains uncertain and we are cautious about the broader economic outlook and its impact on our market," Crozier cautioned.