U.K. Culture Secretary Karen Bradley will announce next week whether 21st Century Fox's proposed takeover of Sky "is likely to face further scrutiny from competition regulators," according to Sam Dean of the London TELEGRAPH. Bradley said that she received reports from U.K. communications watchdog Ofcom and the Competition & Markets Authority, which she asked to investigate the £11.7B ($14.8B) takeover. Those reports "were originally due last month, but the deadline was extended due to the general election." Bradley referred the attempted takeover for investigation on the grounds of "media plurality and commitment to broadcasting standards" earlier this year. She said, "My priority remains -- as it has throughout this proposed merger -- to make my decision independently, following a process that is scrupulously fair and impartial, and as quickly as possible" (TELEGRAPH, 6/20). In London, David Bond reported Ofcom was asked by Bradley to look at whether the £10.75 ($13.57)-a-share offer, made by Fox last December, "would hand too much power" over the U.K. media to Rupert Murdoch's media empire. It has "also been considering whether the deal would be against the public interest on the grounds of broadcasting standards" (FINANCIAL TIMES, 6/20). The BBC reported European Commission competition authorities "have approved the deal." Opponents of the $14.8B merger, which would give Fox access to Sky's 22 million customers in Europe, "have given evidence to Ofcom in recent weeks" and fear the deal would give Murdoch "too much control of media" in the U.K. Lawyers representing several women who have accused staff at Fox News -- which is part of 21st Century Fox -- of sexual harassment are "among those who have spoken to the regulator" (BBC, 6/20).
'FIT AND PROPER?' REUTERS' Kate Holton reported Ofcom "has also examined" whether execs at Fox are "fit and proper" to hold a broadcasting license. The reports "will be made public when the British government makes its statement." The government will now decide whether to approve the deal, whether to refer it to the CMA for a longer investigation or "whether to engage with both parties to find solutions to their concerns" (REUTERS, 6/20).
'HUGELY SIGNIFICANT': In London, Mark Sweney reported Labour Party Deputy Leader Tom Watson called on Bradley to "make public the findings of an investigation" into Murdoch's takeover of Sky and said that the £11.7B deal "should be referred to the competition authorities for further scrutiny." Watson said that Bradley should publish Ofcom's conclusions, which "will only be made public if the cabinet minister agrees." Watson: "The proposed takeover of Sky by Fox is a hugely significant deal with the potential to transform the U.K.'s media market. It is therefore vital that Ofcom's recommendations to the government are published in full at the earliest available opportunity" (GUARDIAN, 6/20).
'MIDDLE-CASE SCENARIO': In L.A., Georg Szalai reported analysts said that if Ofcom "had no regulatory concerns at all, which they called rare and unlikely," it would mean the British government could fully approve the Sky deal "fairly quickly." Analysts also said it was "unlikely that Ofcom had found the new owner" would not meet the "fit and proper" requirement or called for the deal "to be blocked for any other reason." Most predict that Ofcom "likely raised some concerns and possibly suggested conditions tied to an approval of the deal." Telsey Group analyst Thomas Eagan wrote in a report on Tuesday, "We expect a 'middle-case scenario,' which we believe could provide a positive catalyst for Fox. This 'middle-case' is likely to take the form of deal approval but with a concession: perhaps some kind of independent governance of Sky News. Importantly, we expect the concession will translate to Fox consolidating Sky News" (THE HOLLYWOOD REPORTER, 6/20).
