More from Robert Peston on Twitter, essentially explaining why the remedy will be accepted. His earlier assertion of an outright sale was incorrect and it is the FT who have really broken this story.
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Demerging Sky News to existing BSkyB shareholders is clever fix, because it can be seen as no change in News Corp relationship with Sky News
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Which is why I expect Jeremy Hunt to give green light to News Corp bid for BSkyB tomorrow morning.
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But Mail, Telegraph et al will allege that News Corp's pledge to fund Sky News for years will give News Corp undue influence over Sky News
There was no way Sky News would ever be sold outright, after all who would buy it? If it's not making money now after all these years I don't see how anyone else could turn a profit, it would have to be bought by someone with very big pockets (perhaps a certain Emir!?) or a larger existing news organisation to use as a foothold in the UK (maybe CNN).
Spinning it off to existing shareholders is quite a nice idea in some ways but what's in it for them? Existing BSkyB shareholders will make a tidy profit out of the sale to News Corp but why would they then want to invest in a heavily subsidised news company?
I would expect that Sky would have a say in who buys the other shares, otherwise there'd be nothing to stop a rival gradually buying up the rest should they wish
The deal will be assembled so that the offer to the non NI shareholders of BSkyB for their holdings will consist of Cash PLUS Shares in 'SkyNews'. It will be entirely up to the exisiting shareholders as to whether they dispose to anyone other than NI. Sky News will have it's own Stock Market listing at the end ot the deal. NI will be prohibited from buying any additional shares in Sky News.
One critical element of the deal is that no employee of NI will be allowed to chair Sky News.
Apparently the name of the new company created to run Sky News will be Newco. BSkyB will licence out the Sky News brand name to the company.
News Corp has worked out a fairly clever way to continue to fund Sky News with the £30m or so it needs to keep running each year, it'll be through a 10-year carriage deal. So, ostensibly, BSkyB will be paying Newco tens of millions a year to carry Sky News on the Sky platform.
Interesting that though BSkyB and Sky News will have a deal for 10 years, the name "Sky News" will be licenced for just seven - which they say it to protect the channels future beyond the ten year period. So perhaps they think off loading it down the line might be the way to go - but although I'd love to see ITN have another stab at 24 hour news, I'd say there would be bigger questions over media plurality were ITN and Sky News to join forces than there is now over News Corp acquiring the majority of shares in Sky.
Personally as easy as it is to be anti-Murdoch and anti-Sky I've no big issue with this move. I think in the publics eye Murdoch and News Corp already own and run Sky any way, and whether that's with a 39% share, a 51% share or even a 100% share makes little difference. Personally I think there are bigger questions over Richard Desmond's acquisition of Five - and arguably he's used cross promotion between his products much more in just a few months than Murdoch has in the last few years.
Although there is a 10-year period prohibiting News Corp. from acquiring further stakes in Sky News, apparently there is another provision that this period of time can be set aside by the Culture Secretary in the future, so if it becomes apparent in, say five years time, that the ownership structure of Sky News is unsustainable, the Culture Secretary of the day could allow News Corp. to acquire 100% of Sky News and fold it back into BSkyB.
I did read an interesting comment somewhere on the internets (can't remember where) about the fear of Sky becoming Fox News being somewhat unfounded. It was based on the fact that British people would simply laugh someone like Glenn Beck off the TV
The only person who has ever really got a big "right wing" rant show is Littlejohn, who's show on LWT was more famous for the audience and Michael Winner turning on him for his mocking of lesbians and his show on Sky that didn't last very long either.
Interesting that though BSkyB and Sky News will have a deal for 10 years, the name "Sky News" will be licenced for just seven - which they say it to protect the channels future beyond the ten year period. So perhaps they think off loading it down the line might be the way to go - but although I'd love to see ITN have another stab at 24 hour news, I'd say there would be bigger questions over media plurality were ITN and Sky News to join forces than there is now over News Corp acquiring the majority of shares in Sky.
Apparently after the first 7 years Sky News would have the option to extend for another 7 years.
Robert Peston has more on the details, intriguingly he suggests that the new Sky News company may want to expand rapidly (he suggests it may in fact be Sky News that might want to buy ITN rather than the other way round).