Murdoch at crossroads as he plots next move in Sky takeover

Rupert Murdoch faces a tough choice over the next two weeks: Offering more concessions that will make his $15.2-billion bid for UK pay-TV broadcaster Sky Plc slightly less attractive, or gambling that he can get it through a perilous six-month regulatory review.

Both options have drawbacks. Culture Secretary Karen Bradley has already rejected proposals from Murdoch’s 21st Century Fox Inc intended to safeguard editorial independence at Sky News once the US company takes full ownership and increase its financial commitment to the operation.

Strengthening those measures would cost Murdoch money and post-deal influence.

The alternative is sending it back for a full review by the Competition and Markets Authority of the deal’s impact on media concentration and the Murdochs’ political clout — a process that would give their many opponents more time to look for material that could damage the its chances.

That road is less predictable, strewn with legal pitfalls from cases working their way through US and UK courts, and political risk that Bradley’s Conservative Party gets replaced by an administration that’s less sympathetic.

“You don’t want to go to CMA phase 2 unless strictly necessary,” said Sarah Simon, an analyst at Berenberg in London. “The longer the thing is open, it creates the risk that some evidence could emerge.”

Bradley has until July 14 to decide whether to clear the £11.7billion transaction or ask the CMA to conduct a deeper review. She has given Murdoch an opportunity to strengthen his proposals by better insulating Sky News’s editorial board from Fox’s influence or lengthening Fox’s offer to continue investing in the news operation beyond five years.

Yet Bradley said she’s mindful that behavioral remedies can be difficult to monitor and enforce.

Any undertakings from Fox would ideally go beyond mitigating public-interest concerns around media concentration and “fully remedy” them.