Fox to face wider probe over Sky takeover
Extra review adds more delay to Fox’s purchase of 61% of Sky it does not own
Rupert Murdoch faces months of fresh scrutiny over how he runs his media empire as UK authorities embark on a wider probe of 21st Century Fox Inc.’s £11.7 billion ($15.5 billion; Dh56.9 billion) pursuit of pay-TV company Sky Plc.
Culture secretary Karen Bradley yesterday said she has made a final decision to ask the nation’s competition regulator to investigate Fox’s commitment to broadcasting standards and whether its takeover of London-based Sky would give the Murdoch family too much sway in the country’s media.
The extra review adds more delay and costs to Fox’s purchase of the 61 per cent of Sky Controversial changes to Australia’s media laws passed the upper house yesterday, paving the way for a significant concentration of ownership, in a move welcomed by the industry.
Under legislation introduced in the 1980s to protect diversity, media companies are blocked from owning television, radio and newspaper assets in the same city, while metropolitan and regional broadcasters are barred from merging.
Major players in the market have long pressed for change, arguing the rules are outdated and do not account for digital media platforms and new publishers like Google and Facebook and video streaming giants such as Netflix. “These changes bring Australia’s outdated media laws into the 21st century,” Prime Minister Malcolm Turnbull said in a statement late yesterday after the upper house Senate passed the bill. it doesn’t already own, Murdoch’s second attempt at the broadcaster he founded after a phone-hacking scandal at his newspapers derailed a 2010 bid. While the investigation opens the deal to more uncertainty, analysts see it as a necessary step toward probable approval.
Bases covered
“It’s very much making sure every base is covered, but it’s unlikely to make a big difference” as the deal will probably be approved, said Ian Whittaker, an analyst at Liberum Capital Ltd. in London. Asking for a deeper probe of both broadcasting standards and media plurality helps Bradley diffuse any political tension and weaken potential legal appeals from opponents, he said.
Sky shares were little changed, trading at 933 pence as of 11:26am in London, a 13 per cent discount to the offer price.
In separate statements, Fox and Sky said they would engage constructively with the CMA.
The announcement came hours before Bradley was due to deliver a keynote address at a conference in Cambridge.