U.K. Culture Secretary Karen Bradley referred 21st Century Fox's £11.7B ($14.5B) bid for full control of Sky to communications regulator Ofcom, "triggering a process that will bring fresh scrutiny to Rupert Murdoch's global media empire," according to David Bond of the FINANCIAL TIMES. In a statement to parliament on Thursday, Bradley said that the regulator "would consider whether a Fox takeover of the European broadcaster would damage media plurality in Britain by handing too much political influence" to Murdoch's newspapers and TV channels. But while she said Ofcom would also be asked to assess the deal on the grounds of the U.S. group's commitment to U.K. "broadcasting standards," she rejected calls to include a "fit and proper person" assessment as part of the public interest inquiry. Instead, Ofcom will carry out its own "fit and proper" review of Sky and its chair, James Murdoch, "which will be conducted at the same time as the public interest inquiries on plurality and standards" (FT, 3/16). BLOOMBERG's Joe Mayes reported the regulatory process is the "most important hurdle" for Murdoch's entertainment company to clear as it "seeks to build a trans-Atlantic media and entertainment giant." Investors had been "expecting the referral as Bradley had already hinted at intervening," and a past attempt by Murdoch to acquire Sky was sent to watchdogs in '10. Investment group Shore Capital analyst Roddy Davidson said, "We think the deal is likely to proceed. We do not believe that it is significantly contentious on concentration of ownership grounds to block and that there is now sufficient separation of Murdoch's media assets" (BLOOMBERG, 3/16).
SHORT WINDOW: In London, Mark Sweney reported in parliament, Shadow Culture Secretary Tom Watson questioned "whether Bradley's referral on broadcasting standards grounds would give Ofcom the power to investigate issues including phone hacking and corporate governance failures." Both Watson and fellow Labour MP Ed Miliband "raised concerns" that Ofcom's 40-day time limit is "not long enough" to conduct a "fit and proper" review. Miliband said that Ofcom's "fit and proper" review conducted during Murdoch's last aborted bid for full control of Sky in '10 took "many months." Opponents of the bid have "raised concerns that Murdoch, who also owns the rightwing Fox News, will use his influence to drive the news agenda," thereby risking the "Foxification" of Sky News (GUARDIAN, 3/16). Also in London, Julia Bradshaw reported Bradley said that she had "received more than 700 letters from third parties over the merger, the vast majority of which called for the Government to intervene." Bradley told MPs, "While representation from Fox highlighted areas where it contested the position, none of the representations have led me to dismiss the concerns I have" (TELEGRAPH, 3/16).
SHARES UNAFFECTED: The BBC reported Labour MP David Winnick was "among those to object to the deal." He said that there was no "vendetta" against Murdoch but that "it would be simply unacceptable that the amount of media ownership he already controls should be increased." Most "analysts believe the deal will go through -- and the lack of movement in the share price suggests that investors agree." One analyst said that the "go-ahead" would probably depend on how much "noise" there was surrounding the "fit and proper" test, adding that "the left-wing press could well play a part in scuppering the deal" (BBC, 3/16). REUTERS' Kate Holton reported James Murdoch "sought industry backing for the deal by recently praising the quality and creativity" of British TV and the "positive contribution made by Sky." He said that a Fox-owned Sky would spend at least £700M ($865.8M) a year on original British production. Shares in Sky were "largely unaffected by the decision, which had been widely expected after Bradley said earlier this month she was minded to intervene" (REUTERS, 3/16).
