BSkyB Holding in ITV Hurts Competition, Regulator Says

The U.K. Competition Commission said Tuesday it is consulting on "possible remedies," including a possible sale, after a provisional determination that British Sky Broadcasting PLC's 17.9% holding in ITV plc restricts competition and is against the public interest. According to the regulatory agency, the holding gives BSkyB, which is the country's biggest pay-television company, the opportunity to influence the strategy of ITV, the largest commercial broadcaster. "BSkyB would be able to influence ITV's key strategic decisions, particularly relating to investment, whether in content, capacity or new technology," said Competition Commission Chairman Peter Freeman. It also would have "the ability and incentive to take advantage of opportunities to weaken ITV or prevent it from taking actions that would threaten BSkyB's interests." The Commission intends to submit its final report in December. BSkyB said, in response, it will "continue to engage with the Commission during the remainder of this process." BSkyB bought the ITV stake for £940M last November to block its purchase by cable operator Richard Branson's NTL Inc., which is now known as Virgin Media. BSkyB is 39% owned by Rupert Murdoch's News Corp.

Sources: Bloomberg, MarketWatch, Wall Street Journal
Commentary: British Sky: Plenty of Opportunity Left Even Before Penetration Of PayTV • Virgin Media and Sky: Report From The Battlefield • The UK's PayTV Market Investigation
Stocks/ETFs to watch: BSY, ITVCompetitors: VMED

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