I’m back from Glastonbury. Actually I was back a while ago and apart from sulking around the internet I haven’t felt moved to do much but blog. Sorry all. But the recent furore over the ownership of BSkyB has dragged me out of my stupor.
Yesterday Rupert Murdoch called off his attempt to take full ownership of BSkyB, in the wake of the News of the World hacking scandal. Robert Peston argues that this might be his biggest setback in over half a decade. That is hyperbole, Murdoch’s lost $1 billion on MySpace and has faced numerous lawsuits, but this is certainly one of his most high profile retreats.
High profile, but I’d argue not particularly important. If you care about media plurality or in mitigating Murdoch’s influence then this news is worse than irrelevant. Ownership of a laptop gives you control over it, ownership of a company does not.
Ownership does not imply control, only varying degree of influence. Even with only a 39% stake in BSkyB Sky News still employ people like Kay Burley and Adam Boulton. Even with only three (now two) newspapers, politicians still kowtow to Murdoch (secret meetings and all).
Murdoch will be annoyed about losing the opportunity to take full ownership of BSkyB not because he will lose influence, but because he will lose money. BSkyB is profitable, and Murdoch needs those profits to expand in Asia where demand for print and electronic media is expanding rapidly. Murdoch has influence without owning the whole of the company.
Let me offer an example. In BSkyB’s Annual General Meeting last year James Murdoch, Rupert’s son and protégé, was re-elected as Director with 98% of votes cast. Now admittedly, shareholder revolts are rare especially when nominating directors, but this illustrates that Murdoch can exercise an arms length influence even without full ownership.
In fact, Murdoch owns around a third of shares in, and works as chief executive of, News Corporation, which itself owns a 39% stake of BSkyB. Owning all of BSkyB is not necessary to be influential when you run a multi-billion dollar media empire.
So the influence of Murdoch is ephemeral even as some claim it is pervasive. If it worries you then the collapse of his BSkyB bid should be of little importance to you. The collapse of his bid is at best the start of any process to diminish his influence.