Media: Ownership

Lord Gavron Excerpts

Thursday 4th November 2010 Lords Chamber

[Lord Gavron]

My Lords, I, too, congratulate my noble friend Lord Puttnam on initiating this debate at the most appropriate time. I must declare an interest as a former chairman of the Guardian Media Group which, as we have heard, is part of a consortium opposing the acquisition by News Corp Ltd of the shares it does not already own in Sky.

The media business is going through a period of rapid and unprecedented change. Newspaper circulations are dropping at an increasing speed. Profits are falling and many newspapers are making large and growing losses. It is unlikely that newspapers will exist in their present form in 10 or, at most, 15 years from now. We will be getting our news from our screens, which will be cheaper, lighter, thinner, more easily readable, and more user friendly than today. They will be in our pockets or handbags, probably unfolding to a larger format, and on our desks and walls. We will be charged for what we use, rather as we are charged for our credit cards; and I suspect we will pay overall roughly what we pay for our newspapers today. The editorial and news content will be much the same and of course there will be advertising.

Some of this, I confess, is prediction and, as Sam Goldwyn said, never make predictions, especially about the future. However, we have to deal with the situation as it exists and that is not a good situation. Rupert Murdoch was described the other day by the noble Lord, Lord Saatchi, as the most powerful man on the planet. I have known Rupert Murdoch for a great many years. I have found him to be straight, loyal and honourable. He is a man of his word. Although I have frequently, if not usually, disagreed with him, his record as a media proprietor in the UK will stand up comparatively well to analysis by future historians.

However, I am against his plan to acquire the rest of Sky. People have said, “He already controls Sky, so buying the rest will make no difference”. We can all talk about the difference, but Rupert Murdoch is not the sort of man who would spend £7.8 billion buying shares which make no difference. Sky, as the Economist of 16 October said, is Britain’s leading media company. It has almost 10 million subscribers and almost £6 billion of annual revenue—already almost double that of the BBC. Apparently, we spend more on Sky than we spend on bread. In addition to its 39 per cent of Sky, News Corporation’s four newspapers already have 37 per cent of our total national newspaper circulation—a share that is as much as the next two biggest newspaper groups combined.

Next March, Rupert Murdoch will be 80. He enters what I heard rather unattractively defined last week as “the drop zone”. He has said that when his health gives out he will get out of the way. He has made plans for succession. However, history tells us that when a great tycoon goes, his assets tend to change hands. Rupert Murdoch has not maximised his corporation’s profits. He is sentimental about newspapers. There are media experts who think that News Corporation, valued in the market at some $38 billion, is undervalued by almost 30 per cent. So it is an attractive takeover prospect in financial terms alone. In addition, the possibility of becoming the most powerful man on the planet is irresistibly beguiling to many rich men. Quite a few of them have access to, or can raise, the means to acquire the company. We could end up with a Russian oligarch, an Arab prince, or a hedge fund billionaire. Whoever it is might be honourable and principled—or they might not be.

We have the power to prevent a media baron from extending his empire. We have tended not to use that power. I hope that this time we will. Even if we do, my major concern remains. It is very difficult to stop someone who has the money from buying a public company. It is very difficult to say, “We let Rupert Murdoch have it, but we like you less, so we are going to stop you from buying it”. The potential influence of News Corporation in the United Kingdom is enormous. The damage that could be done if it fell into the wrong hands is incalculable. We should be extremely worried.