Rupert Murdoch Miffed Over New British Rules
LONDON — RUPERT MURDOCH is vowing to do battle with government plans in Britain that will curb further expansion of his already huge media empire in that country.
The Australian-born tycoon who owns five British national newspapers, including the London Times and the mass-circulation Sun, and controls the Sky satellite television company, says a plan to overhaul media ownership rules in Britain will operate unfairly against him.
But Stephen Dorrell, the heritage secretary, who unveiled the new blueprint last week, says the government wants to prevent the concentration of media ownership in too few hands.
He claims the new rules are not aimed at Murdoch specifically, or News International, the company that publishes his British newspapers. Mr. Dorrell says he wants to diversify media ownership and at the same time set limits on the amount of cross-media ownership any company can enjoy.
Under Dorrell's plan, if a newspaper publisher has more than 20 percent of national circulation, it will not be allowed to buy TV stations. The rule means that Mr. Murdoch, who dominates 37 percent of the newspaper market, will not be able to acquire more TV interests in Britain. Dorrell also proposes to set long-term limits on ownership at 10 percent of the total media market and 20 percent in each media sector. A government-appointed media regulator will have extensive powers to decide whether newspaper and TV ownership levels are in the public interest.
Under current rules, it is difficult for newspaper publishers to expand their interests in TV stations, and vice versa. Murdoch has so far been able to elude the rules because the headquarters of Sky TV is in Luxembourg, and is therefore not subject to British regulations.
It has been common knowledge for years that Murdoch would like to invest in terrestrial (nonsatellite) British TV channels. Groups such as United Newspapers, publishers of the Daily Express, and Pearson, owners of the Financial Times, also want to extend their TV interests.
Dorrell's plan drew a bitter rebuke from News International. ''The government's message is stop investing in expansion,'' it said in a statement. The company said it hoped for ''a constructive dialogue'' with ''this supposedly free- enterprise, pro-competition government.''
It hinted that the new rules might persuade Murdoch to sell at least one of his newspapers in order to qualify for purchasing more TV interests under the new rules.
At the heart of the Dorrell plan is the government's belief that media ownership requires a special form of regulation and should not be subject to normal marketplace conditions.
Defending the new rules, Dorrell said: ''Television, radio and the press have a unique role in the free expression of ideas and opinion, and thus in the democratic process.''
Currently, British media ownership is highly concentrated. Four groups account for 88 percent of national newspaper circulation. Four terrestrial channels share 93 percent of Britain's TV audience.
The government's long-term aim is to redraw Britain's media ownership map. Murdoch, however, appears to believe that can happen only at his expense.
In deciding to confront Murdoch, the government is tangling with the world's most powerful media magnate.
Only one month ago, Murdoch formed a $2 billion alliance with MCI Communications in the United States, and then indicated that he was interested in bidding for the television interests of Fininvest, owned by former Italian Prime Minister Silvio Berlusconi. In an interview in the Italian daily La Stampa on Sunday, Murdoch said a deal would be settled in the next three months.
Among his other interests, Murdoch controls the American Fox network and is the front-runner in the development of satellite TV in Asia, with China's 1 billion-plus population clearly within his sights.
The British Broadcasting Corporation is still fuming about his decision to remove its news broadcasts from his transmissions in Asia lest they offended the authorities in Beijing.
Murdoch will have one ally in his determination to change the British government's position on the new media rules. The Mirror Group, publisher of the Daily Mirror and the Independent, accounts for 24 percent of Britain's national newspaper circulation and would be unable to acquire new TV interests under the new rules.
On the other hand, Express Newspapers with 14 percent of circulation and Associated Newspapers, publisher of the Daily Mail (12 percent), would be free to expand into television.
The tensions this will set up between Murdoch and his rivals led Brenda Maddox, a TV-industry analyst, to call Dorrell's blueprint ''a can of worms.''
''It leaves many questions unresolved,'' Ms. Maddox wrote in the Murdoch-owned Times.
The Times used its editorial columns to launch a broadside at Dorrell, saying his policy was ''made from fear, favour and false philosophy.''