Fox’s takeover of Sky is ‘unlikely to be derailed’
ED MILIBAND’S call for a review into whether James Murdoch is a ‘fit and proper’ person to lead a merged 21st Century Fox and Sky is unlikely to derail the £11.7billion takeover, say City analysts.
Murdoch is chief executive of 21st Century Fox and chairman of Sky, the firms controlled by his father Rupert. 21st Century Fox aims to acquire the 61 per cent of Sky it does not own.
Ex-Labour leader Miliband is one of a cross-party group of politicians, including former Business Secretary Vince Cable and Tory peer Lady Warsi, to have sent a letter to the head of regulator Ofcom, Sharon White, calling on her to investigate whether James Murdoch meets the test to hold a UK broadcasting licence.
But industry experts say Ofcom has an ongoing duty to assess whether a licence holder is ‘fit and proper’ and Murdoch has been investigated and cleared for Sky. Ofcom said it had received the letter and was mulling its response.
Following the phone hacking scandal that engulfed News International, an Ofcom investigation found that while James Murdoch ‘repeatedly fell short of the conduct expected of him as chief executive and chairman’ there was ‘insufficient evidence to conclude he deliberately engaged in wrongdoing’.
Alice Enders, at media research agency Enders Analysis, said of the letter: ‘I do not think this will derail the deal or the regulatory process.’
She suggested the move was linked to Lord Puttnam’s proposed amendments to the Digital Economy Bill, which would mean media acquirers facing a test looking at any previous criminal activities or corporate governance failures.
21st Century Fox said when it announced its planned takeover of Sky last year: ‘Sky is and will remain subject to UK regulation through the Communications Act 2003, the Broadcasting Act 1996 and the Ofcom Broadcasting Code.’
It also said that it would ‘continue to broadcast news under the Sky brand and maintain that excellent record of compliance’ after a merger.