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EDITIONS
Tuesday, 12 November, 2002, 10:16 GMT
Murdoch's Sky brightens
Rupert Murdoch
Murdoch calmed rumours of a bid for Five
Nick Higham

Rupert Murdoch was in town last week, for BSkyB's annual meeting. His occasional public appearances on this side of the water are always news, and this one duly made headlines.

Most surprising: Murdoch's declaration that he isn't interested in buying Channel 5.

The Communications Bill to be announced in the Queen's Speech will allow major newspaper companies like Murdoch's News International to control a terrestrial TV channel.

Everyone leapt rapidly to the conclusion that a Murdoch bid for Channel 5 would inevitably follow.

So did the MPs and peers on Lord Puttnam's parliamentary committee scrutinising the draft bill.

Now it seems they were wrong - though Murdoch didn't spell out why he wasn't interested, or what might make him change his mind.

Sumner Redstone
Sumner Redstone had no smiles for the BBC
Less surprising was his swipe at the BBC, which he thinks is "untouchable" and should be more tightly regulated.

"The BBC gets anything it wants... and then it turns around when it sees we've been successful and puts on copycat channels, for which they charge nothing," he said.

"That's known anywhere else in the world as predatory pricing. But no rules apply to the BBC."

His complaint echoed that of the veteran Sumner Redstone, chairman of Viacom which owns CBS, MTV and Nickelodeon, who was also in London last week.

"Right now the BBC can target MTV and Nickelodeon and I don't see why it should be able to use public funds to compete with commercial brands," Redstone complained.

'Opportunity'

Viacom, in Murdoch's view, is the only US media company capable of buying ITV - which may also be up for sale once the Communications Bill lifts the ban on US ownership.

Redstone teased his British hosts by refusing to rule out a bid for the network, which he described as a "great opportunity".

Sky Digital football
Sky's football coverage is less popular on cable
"We are interested in expanding our international businesses and the UK is one of the most attractive markets, given the strength of our existing operations here," he said.

Meanwhile Murdoch had good news to announce at BSkyB. While his US TV stations and British newspapers reported a surge in advertising revenue, Sky goes from strength to strength.

After four years of losses, thanks to massive investments in digital television, the company is back in profit: 43 million in the three months to 30 September.

The number of people subscribing direct rose by 217,000, to 6.32 million.

Many seem to have switched from ITV Digital - and the increase made up for a fall in the number of cable subscribers taking Sky's sports and film channels.

Sky used to be a phenomenal profit-making machine. It looks as if it's about to become one again.

The BBC's Nick Higham writes on broadcasting

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