Murdochs face new hurdle in pursuit of Sky

THE Murdoch family faces a new obstacle in its pursuit of full control of Sky, after the Government asked the media regulator to look again at 21st Century Fox’s record as a broadcaster.

Karen Bradley, the Culture Secretary, had been poised to refer the £11.7bn takeover to the Competition and Markets Authority (CMA) for a formal investigation of its impact on media plurality.

However, in a victory for Rupert Murdoch’s political opponents, she has written to Ofcom for more advice after receiving new evidence and comments on her plans.

A spokesman for the Department for Digital, Culture, Media and Sport (DCMS) said: “Any referral decision by the Secretary of State must be taken on the basis of a valid assessment of all the relevant evidence. For this reason the

‘Any referral decision must be taken on the basis of a valid assessment of all the relevant evidence’

DCMS has asked Ofcom to advise on a number of points arising from these representations.”

Ofcom said earlier this summer there were no grounds for a parallel formal investigation of Fox’s commitment to broadcasting standards.

Ms Bradley’s plan to trigger a CMA public interest investigation on only plurality grounds has since come under heavy attack, however.

A cross-party group of senior politicians, including Ed Miliband, Vince Cable and Ken Clarke is campaigning for the takeover to be blocked over allegations of sexual harassment and low journalistic standards at Fox’s US news channel.

The Government says it wants a reply from Ofcom by Aug 25, making it less likely that Ms Bradley will refer the deal to the CMA during Parliament’s summer break, which ends on Sept 5.

It is understood that the DCMS has asked Ofcom to look at new evidence on broadcasting standards. The move is the latest in a string of delays to threaten Fox’s ambitions. Once under

way, the CMA investigation could last more than six months, and could be followed by further months of negotiations between Fox and the Government over remedies such as a spin-off of Sky News.

The Murdoch family offered independence safeguards for the channel in an attempt to avoid a full CMA review but Ms Bradley rejected a controversial bargain.

Following the CMA’S investigation and any remedy discussions, Fox is due to apply for a court-backed scheme of arrangement to secure shareholder approval, which takes at least two months.

The schedule is becoming tight, with Fox due to pay a £200m break fee if it has not secured regulatory approval by Aug 15 next year.

The latest delay to the takeover rattled Sky shareholders. The shares fell on the DCMS announcement to 961.5p, pennies higher than their low point since Fox swooped in December.

Sky shares have traded significantly short of the £10.75 offer price on fears the Murdoch empire will fail to take control of it again.