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An independent director will have to sit in on Sky News board meetings when editorial decisions are being made if News Corporation's bid to takeover BSkyB is successful and the news provider is spun off into a separate company, the Government said today.

The independent director has to have senior editorial or journalistic experience, the Government said. The UK Culture Secretary Jeremy Hunt announced proposals that detailed the requirement as one of four conditions that News Corporation has committed to in order for its takeover bid to be completed.

A previous undertaking was that Sky News be separated from BSkyB. The new undertakings create more conditions related to the news provider.

The proposed undertakings (15-page / 117KB PDF), which have been revised following a Government consultation on the issue of the takeover in March, also include a requirement for Sky to continue to cross-promote Sky News on its other channels.

Jeremy Hunt will have to approve Sky News' Articles of Association before the takeover can proceed, the revised proposals said. The Articles of Association (54-page / 460KB PDF) refer to various procedural rules including a commitment to be editorially independent.

A monitoring trustee must also be appointed to ensure that all the undertakings are complied with during the takeover process, the revised proposals said.

Industry and the public have until 8th July to respond to the proposed undertakings.

The revised undertakings were published to address concerns the Government received in response to a public consultation it held about the takeover in March, Jeremy Hunt said in a statement from the Department for Culture, Media and Sport (DCMS).

The consultation was held to consider previously proposed undertakings Hunt had agreed with News Corporation. More than 40,000 respondents commented on the proposals, the Government said.

The previously drafted undertakings came in for criticism from some media organisations. They claimed that there were insufficient measures in place to ensure that Sky would have independent editorial control over news content during an interim period within the change of ownership process and once News Corporation took over, according to a DCMS summary (25-page /438KB PDF) of the responses it received.

“I am aware of the huge interest in the proposed merger and am grateful to those who responded to the [March] consultation," Jeremy Hunt said in a statement by the Department for Culture, Media and Sport (DCMS).

"I could have decided to accept the original undertakings but a number of suggestions were made in response to the consultation which could further strengthen the undertakings, particularly around editorial independence, business viability and the articles of association. I am therefore proposing some changes to the undertakings and I will now hold a further public consultation,” Hunt said.

Media regulator Ofcom said in December that the proposed takeover could impact on media plurality. It had also advised Jeremy Hunt to refer the matter to the Competition Commission. The Commission could consider whether a prospective takeover would leave competition in the UK media market in a healthy state and whether it would benefit the organisations, customers and the economy.

Ofcom said it backed the changes made to News Corporation's undertakings.

"We consider that the revised proposed undertakings offered by News Corporation would address the plurality concerns identified in our [December]," Ofcom said in a letter (8-page / 211KB PDF) to Jeremy Hunt.

Copyright © 2011, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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