Is media ownership transparent?
In law YES FOR BROADCAST MEDIA ONLY
In practice NO

IN LAW

Under the Broadcasting Act 1990 and Communications Act 2003 it is possible to find out who owns the broadcast media through information reported to media authority, the Office for Communications (Ofcom). The law does not state what information should be disclosed but leaves it to the discretion of Ofcom to request all the information it deems necessary. In practice this may include information on the size of shareholdings, beneficial owners and those with indirect interests and control if Ofcom requests such information.

These requirements do not apply to newspaper publishers unless the owners also hold a regional TV broadcasting licence in which case rules limiting cross-media ownership may apply. Online broadcasters are not typically regulated by Ofcom. Limited ownership information for print and online media can be obtained from the companies register (Companies House), under company law.

UK laws covering disclosure of ownership by the media have largely been motivated by concerns about maintaining competition in the marketplace by preventing media concentrations and ensuring new entrants are not excluded from the market. Behind the competition rules lies the principle that true plurality requires choice and the ability for consumers to make informed decisions. The Broadcasting Act of 1990 was seen as a “Thatcherite” law which heralded “a massive expansion in choice”. Hence the UK’s media authority, Ofcom, checks ownership information submitted to it for the purposes of assessing whether a media outlet is violating laws limiting media concentrations in order to maintain that choice.

 

IN PRACTICE

Although media may report all the information needed to identify the real owners, obtaining that information for the general public is not easy. The law does not require Ofcom to make the information it receives public and only some ownership information is available on its website. Only licence applications for competitive licence awards, such as for local TV services (L-DTPS) or commercial radio services are published on the website. They contain ownership information including sizes of shareholdings and names and contact details of shareholders in some cases.

In other instances Ofcom takes the view that they publicise the list of licensees and ownership information for those licensees can be found on the website of the companies register, Companies House, as a matter of public record. This does not however allow ownership to be fully established by the public since only public limited companies have to disclose detailed ownership information to Companies and, in any case, there is charge of £1-£2 for each record accessed which quickly becomes prohibitive if any volume of information is required.

It may be possible to obtain some ownership information under the Freedom of Information Act as Ofcom is a public body subject to such requests. In December 2014 Ofcom confirmed that it has received no such requests and that, in any case, ownership information is already in the public domain, in its view.

Greater ownership reporting requirements place further demands on both the media and the media authority. In order to find out how the requirement to report works in practice, interviews were carried out with three local broadcasters and the TV and Licensing Department of Ofcom to find out how they manage ownership information in practice.

Media ownership information is reported by media to Ofcom whose remit includes broadcasting, amongst other things. The collection, storage and dissemination of information is managed within the TV and Radio Licensing department and just one of a number of tasks within the department. The department has a team of nine staff, each of whom has responsibility for some tasks related to ownership information ranging from checking information, ensuring that owners are not disqualified from holding a licence, assessing transfer information or investigating issues where the holder of a licence may in reality be a different entity to the provider of the service. They also check ownership information against that reported by the media outlet in the Companies Register. Information must be supplied to Ofcom in hard copy and is stored in hard copy. The element of the staff time that encompasses dealing solely with ownership information is hard to disaggregate from other tasks but is likely to be significantly less than half-time for each of the nine posts – so perhaps 4-5 full time positions. This is out of a total Ofcom staff of 820.

The main challenge faced by Ofcom in dealing with media ownership information is that of volume; with more than 2000 TV and radio licences to manage, changes to shareholdings or directors happen frequently.

Ofcom has never had to sanction a media outlet for non-compliance with the ownership reporting requirements.

The broadcast media that were interviewed were all local TV stations which started broadcasting in 2014, as part of a new local TV sector in the UK. As small outlets, ownership information is reported by the most senior person, sometimes with support from the relevant person within a parent company. Their experience of reporting ownership information to Ofcom thus far has not been overly onerous since they mostly have very few shareholders and changes in shareholdings have yet to take place. The annual returns are estimated to take no more than 1 day in total. Reporting changes in directorships as they happen is more burdensome as this happens more regularly and requires detailed personal information. The level of financial reporting required to assess their progress against their business plans, as new businesses, is also time consuming.

Concern was expressed at the level of detail required by Ofcom and questions raised about why the information couldn’t be obtained from Companies House. There was also uncertainty about whether the information is verified by Ofcom and therefore whether there was any value in reporting it.

Ofcom sends out hard copy forms to the media which they find unwieldy. They would prefer to make an electronic submission which can be done if requested but is not the default method used by Ofcom.

Whilst two of the broadcasters supported the public’s right to know who owns the media, one suggested that the public should not have access to ownership information about local TV since they will assume there is some political motivation whereas, in fact, most owners are simply investors. This is in contrast to the newspaper sector which is highly politicised in its ownership.

 

RELEVANT LEGISLATION

Law Media covered by law
Broadcasting Act 1996 Broadcast media
Communications Act 2003 Broadcast media
Communications Act 2003 Print, broadcast and online media

 

INFORMATION SOURCES

Access Info full country research on transparency of media ownership: www.access-info.org/wp-content/uploads/tmo_uk_17july2013.doc

Ofcom Licensing – http://licensing.ofcom.org.uk/

Companies House (companies register): https://www.gov.uk/government/organisations/companies-house