We are following the BSkyB and ITV story with ongoing interest. Rupert Murdoch's expansion into free to air commercial television through a legitimate backdoor, or so he thought.
To recap, BSkyB spent £940million buying ITV shares at 135p a share in November 2006.
The Competition Commission has found that the 17.9% holding owned by BSkyB was "against the public interest", as it gave Sky "a material influence over ITV", namely the ability to block shareholder resolutions requiring 75% approval, in effect, putting a potential handbrake on Michael Grade's freedom to move ITV forward in any direction he required.
Interestingly, the decision wasn't made on the grounds that the situation was anti-competitive in terms of TV advertising markets, sports rights bidding or plurality in television news - in effect then finding against Sky on the grounds of what it could potentially do, rather than what it actually has done.
Guilty until proven innocent? Is this fair?
Looks like Sky will be forced to reduce its position to around the 10% to 15% mark - which at todays share price of around 105p a share, will crystallise a £100m+ loss.
So, in effect, being "indirectly fined" for buying a position in a competitive business with only mere potential for causing trouble at some point.
Fair or not? Any views?
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