European regulators asked television companies whether News Corp.’s (NWSA) proposed 7.8 billion-pound ($12.6 billion) acquisition of British Sky Broadcasting Group Plc (BSY) would limit their access to viewers and raise advertising prices.
Companies that produce television channels were asked in a questionnaire from European Union antitrust regulators obtained by Bloomberg News “to what extent does your company depend on BSkyB in the U.K. and Ireland to gain access to viewers.”
Business Secretary Vince Cable is separately reviewing whether the takeover of Britain’s largest pay-TV operator by the owner of four of the biggest-selling U.K. newspapers would give too much media control to Rupert Murdoch, News Corp.’s chairman and chief executive officer.
The EU document didn’t include questions about the impact of the merger on the news media. U.K. newspapers, the British Broadcasting Corp. and phone company BT Group Plc signed a joint letter to Cable calling for the bid to be challenged by the U.K. government.
“The question of the news media is the real concern” as New York based-News Corp. could use cash “from BSkyB to feed their newspapers like the Times,” said Alexander Wisch, an analyst at Standard & Poor’s Equity Research in London.
The objection by some of BSkyB’s rivals may put the coalition government of Prime Minister David Cameron in a quandary. News Corp. owns Britain’s biggest tabloid, the Sun, which backed the Conservative party of Prime Minister David Cameron in Britain’s general election. It also owns the Times and Sunday Times newspapers.
Amelia Torres, a spokeswoman for the European Commission, declined to comment on the questionnaire. Alice Macandrew, a spokeswoman for News Corp. declined to comment. Robert Fraser, a spokesman for Isleworth, England-based BSkyB also declined to comment.
BSkyB shares were unchanged at 727 pence as of 9:46 a.m. in London trading.
The European Commission has set a deadline of Dec. 8 to review News Corp.’s bid for the 61 percent of BSkyB it doesn’t already own.
The European Commission asked whether BSkyB or News Corp., which also owns The Wall Street Journal and the Twentieth Century Fox film studio, might divert advertising spending away from rivals to the merged company. It asked whether the deal “will have any significant effect on the merged entity’s advertising on those platforms” and whether it would affect prices.
Television companies were also asked if they thought the conditions for broadcasting their channels on BSkyB was “likely to change post-merger.”
The regulators are examining whether News Corp would have incentives to block channels from BSkyB after a merger, said Simon Holmes, a competition lawyer at SJ Berwin LLP in London.
The U.K.’s antitrust regulator, the Office of Fair Trading, may try to wrest control of the case from Brussels by citing national competition concerns that outweigh those of Europe. The watchdog has until Nov. 26 to seek referral of the case back to Britain.
BSkyB said Nov. 8 that it signed up 10 million pay-TV customers. It offers more than 240 channels as part of a basic television package, according to the company’s website.
BSkyB was formed in 1990 with the merger of Murdoch’s Sky Television and British Satellite Broadcasting. Buying exclusive live broadcasting rights in 1992 to popular events such as the Premier League, England’s top soccer league, helped it win clients. It added offerings such as the History Channel and Disney Channel in 1995.
The EU didn’t specifically ask about sports rights in the questionnaire.
In June, News Corp. and BSkyB failed to agree on a price for the deal and said they would focus on gaining regulatory approval first.
To contact the reporter on this story: Aoife White in Brussels at firstname.lastname@example.org.
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