News Corp. Lobbyist Used Threat on BSkyB Deal, Lawmaker Says

News Corp.’s top European lobbyist threatened a U.K. politician with negative newspaper coverage of his party if the company’s British Sky Broadcasting Group Plc takeover bid was blocked, the lawmaker told a media inquiry.

Fred Michel, who handled News Corp.’s policy and public affairs in Europe, implied the Sun tabloid would write negative stories about Liberal Democrats if Business Secretary Vince Cable, who belongs to the party, didn’t approve the 7.8 billion-pound ($12.2 billion) deal, Member of Parliament Norman Lamb said in a statement to the inquiry in London.

Michel “specifically mentioned the Sun and indicated that it had given the Liberal Democrats reasonable coverage since the general election” in May 2010, Lamb said. “He then implied that if the decision surrounding the bid did not fall in their favor, it would be a pity if things were to change and they were no longer able to report in such a positive way.”

News Corp., based in New York, said today it’s considering splitting into two publicly held companies to divide its publishing units from its entertainment holdings. The move comes nearly a year after the phone-hacking scandal at News Corp.’s News of the World tabloid scuttled the BSkyB bid and prompted Chairman Rupert Murdoch to shutter the 168-year-old title.

Lamb was an adviser at the time to Deputy Prime Minister Nick Clegg, a Liberal Democrat and the junior member of the coalition led by Prime Minister David Cameron, a Conservative. Cameron called for the inquiry in response to public anger over the hacking scandal.

No Threat

Michel denies “making any kind of threat” to Lamb in relation to the BSkyB bid, Rhodri Davies, a lawyer representing News Corp.’s U.K. unit, News International, told the inquiry today. Miranda Higham, a spokeswoman for News Corp. in London, declined to comment.

Before the takeover bid collapsed, Michel pushed for secret documents and meetings with U.K. government officials that were considered by the company’s critics to be a conflict of interest, he told the inquiry in testimony on May 24. He said he made or sent more than 1,000 phone calls, e-mails and text messages about the proposed takeover, and didn’t do anything inappropriate.

Before Cable could make a decision on the bid, Cameron stripped him of responsibility for reviewing it after undercover journalists recorded him saying he had “declared war” on Murdoch. Cable told the inquiry on May 30 that he felt “under siege” by News Corp. and that Michel had made “veiled threats” against other Liberal Democrats.

The decision was given to Culture Secretary Jeremy Hunt, a Conservative who later faced calls to step down after evidence at the inquiry revealed improper communications about BSkyB between his office and Michel. Hunt, whose top aide resigned over the scandal, told the inquiry June 1 he responded to text messages from Michel “out of politeness.”

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