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U.K. Culture Secretary Refers Fox Takeover Of Sky To Competition Watchdog

The Murdoch family’s proposed £11.7B ($15.7B) takeover of Sky has been referred to the Competition & Markets Authority "for further investigation," according to Rob Davies of the London GUARDIAN. U.K. Culture Secretary Karen Bradley told the House of Commons of the decision two days after "signalling her intention to pass the deal to the competition watchdog for six months of in-depth scrutiny." The CMA will consider "not just the proposed deal’s effect on media plurality, but also the Murdochs’ commitment to broadcasting standards." Bradley said, "I can confirm my final decision is to refer the merger to the CMA for a phase 2 investigation on media plurality and genuine commitment to broadcasting standards grounds" (GUARDIAN, 9/15). The BBC reported the expanded agenda for the CMA referral raised the prospect that the deal -- the Murdochs' second attempt to acquire the rest of Sky -- "could fail." An initial bid in '10 was "abandoned in the wake of the phone hacking scandal." New governance systems were then introduced at Murdoch-owned media companies, and the broadcasting and film businesses "were separated" from Murdoch's newspaper interests, which include the Sun, the London Times and the Sunday Times (BBC, 9/14).

'HUGE OPPORTUNITY': In London, Christopher Williams reported 21st Century Fox CEO James Murdoch warned the U.K. government that 21st Century Fox’s takeover of Sky "is a test of Britain's claims that it will remain open for business after Brexit." In the wake of Bradley's decision to trigger an investigation, Murdoch said that Sky and the country "could lose clout in the shifting global media landscape if the deal fails." He said that ministers "would not take a meeting with him" but added, "There is this huge opportunity for companies and countries willing to act decisively and capitalize on the economic and social benefits that this industry can create." Speaking at the Royal Television Society Convention in Cambridge, the 44-year-old "defended the compliance record of Fox News and his handling of sexual harassment allegations at the bombastic U.S. news channel" (TELEGRAPH, 9/14). BROADBAND TV NEWS' Julian Clover reported Murdoch said that a combination of 21st Century Fox and Sky is "needed to compete with the growing strength of Netflix, Amazon and Apple." He said, "We’re eager to provide Sky with access to the resources, reach, and creative sparks needed to keep pace against a new breed of competitors that now include some of the largest companies in the world, but none of whom have the local depth of investment and commitment to the U.K. and to Europe." Much of the criticism of the prospects of Sky under Fox has centered around "issues at Fox News including a highly publicised sexual harassment case." Murdoch: "In a large organization there's always things that are going to go wrong and the question is how are you going to respond to them" (BROADBAND TV NEWS, 9/14).

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