Fox-Sky deal thrown into doubt by UK regulator
LONDON: Britain’s competition regulator provisionally ruled yesterday that a planned takeover of pan-European satellite TV giant Sky by Rupert Murdoch’s 21st Century Fox entertainment group was “not in the public interest”.
The government had referred the matter to the Competition and Markets Authority (CMA) for an in-depth probe last September owing to concerns about media plurality and broadcasting standards.
“The CMA has provisionally found that Fox taking full control of Sky is not in the public interest due to media plurality concerns, but not because of a lack of a genuine commitment to meeting broadcasting standards in the UK,” the regulator said in a statement and also outlined possible remedies.
“The media plurality concerns identified mean that, overall, the CMA provisionally concludes that the proposed transaction is not in the public interest.”
Back in 2016, 21st Century Fox bid £11.4 billion ($15.1 billion) for the 61% of Sky it does not already own.
The takeover has already been approved by regulators in Austria, Germany, Ireland and Italy as well as the European Union.
However it had not yet been given the nod in Britain, where concerns linger over the strengthening influence of Australianborn US tycoon Murdoch.
The CMA watchdog said yesterday that the deal would hand Murdoch “too much control” over UK news — and therefore too much power in swaying public opinion.
“The CMA has provisionally found that if the deal went ahead, as currently proposed, it is likely to operate against the public interest,” it added. “It would lead to the Murdoch Family Trust (MFT), which controls Fox and News Corp, increasing its control over Sky, so that it would have too much control over news providers in the UK across all media platforms (television, radio, online and newspapers), and therefore too much influence over public opinion and the political agenda.”
The watchdog is now inviting responses from interested parties, including 21st Century Fox, before issuing its final report on May 1.
The CMA added yesterday that Murdoch news outlets were watched, read or heard by almost a third of Britain’s total population — with a combined share of public news consumption that is “significantly greater” than all other news providers except the BBC and ITN.
“Due to its control of News Corp, the Murdoch family already has significant influence over public opinion and full ownership of Sky by Fox would strengthen this even further.
“While there are a range of other news outlets serving UK audiences, the CMA has provisionally found that they would not be sufficient to moderate or mitigate the increased influence of the MFT if the deal went ahead.”
The CMA meanwhile outlined three possible “remedies” to address its concerns.
Those remedies included blocking the deal, spinning off or selling Sky News, or seeking to “insulate” Sky News from the influence of the Murdoch Family Trust.
In response, Sky noted the findings in a brief statement and said it would seek submissions on possible remedies for the regulator’s concerns.
21st Century Fox meanwhile welcomed the report but added that it was “disappointed” by the ruling.
“Regarding plurality, we are disappointed by the CMA’s provisional findings,” it said. “We will continue to engage with the CMA ahead of the publication of the final report in May.”