News Corp‘s bid to acquire BSkyB could be delayed by up to two weeks due to complications in spinning off Sky News into a separate company, the FT reports.
To allay concerns that the bid would hand Rupert Murdoch too much control of the UK news market, it was proposed that Sky News be spun off into a separate company called Newco.
According to a report in today’s Financial Times, merger clearance is being delayed because Ofcom and the Department for Culture, Media and Sport is requiring ‘detailed assurances on the financial and editorial independence of Newco and lawyers for the two sides are ‘ironing out the creases’.
Documents relating to the spin off reportedly run to ‘hundreds of pages”.
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The FT also reports that the process is further complicated by the fact that Sky News, which is expected to receive 75 per cent of its revenues from a 10-year contract with BSkyB, also has deals to provide news to Channel 5.
This deal runs out next year but negotiations are ongoing – with rivals ITN and Mentorn submitting rival bids.
Sources told the FT that this ‘uncertainty over Newco’s financial future if it did not have a renewed contract with Channel 5 have also played into the delay”.
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