The statement says: News Corporation welcomes the announcement by the Secretary of State for Culture, Olympics, Media and Sport that he is minded to accept, and will now open a public consultation on, the undertakings proposed by News Corporation in lieu of a reference of its proposed acquisition of BSkyB to the Competition Commission.
The undertakings provide for Sky News to be spun off as a UK publicly-traded company, with News Corporation retaining a 39-percent stake. This will preserve Sky News as a distinct media enterprise with a majority of independent directors.
While News Corporation continues to believe that the proposed acquisition of the shares in BSkyB that it does not already own will not result in insufficient plurality for any audience in the UK, it has submitted this comprehensive proposal in order to avoid a lengthy and costly review by the Competition Commission.
News Corporation notes Ofcom’s opinion to the Secretary of State that “we consider that the revised proposed undertakings would address the plurality concerns identified in our report of 31 December 2010”.
News Corporation would effect the structure below following the acquisition:
• Sky News will be spun off as an independent UK public limited company with its shares publicly traded.
• Shares in the new company will be distributed to shareholders of BSkyB in the same proportions as their shareholding in BSkyB. As a result, News Corporation would retain the same shareholding in Sky News as it currently holds in BSkyB – a 39-percent economic interest and 37-percent voting interest.
• BSkyB will provide a 10-year carriage agreement which will give the new company a substantial long-term revenue stream.
• BSkyB will license the Sky News brand to the new company and will also provide facilities and support services on arms-length terms.
The new company’s governance structure will include:
• A Board with a majority of independent non-executive directors.
• An independent non-executive Chairman.
• A commitment to the principle of editorial independence and integrity which will be enshrined in the articles of association.
• Approval by the Board of the hiring and firing of the Editor of Sky News.
• A Corporate Governance and Editorial Committee, including an independent Board member with senior editorial and/or journalistic experience, which will be responsible for overseeing compliance and advising the Board on provisions relating to editorial independence.
