U.K.'s CMA Warns Fox's Takeover Of Sky Is 'Not In The Public Interest'
The U.K.'s Competition & Markets Authority could block 21st Century Fox's proposed takeover of Sky after warning it is "not in the public interest" because it would give Rupert Murdoch and his family "too much control over Britain's news media," according to Jack Torrance of the London TELEGRAPH. Murdoch's company, which is set to be acquired by Disney, already owns 39% of Sky but tabled an £11.7B ($16.4B) bid to take full control in '16. Anne Lambert, who led the CMA's investigation, said that if the proposed takeover went ahead, "it would result in the Murdoch family having too much control over news providers in the UK, and too much influence over public opinion and the political agenda." However, the CMA found no issue with Fox's commitment to broadcasting standards, saying that "overall, Fox has a genuine commitment to broadcasting standards in the UK," having held licenses in the country for more than 20 years (TELEGRAPH, 1/23).
THREE OPTIONS: In London, Mark Sweney reported the CMA set out three options for the deal that should be considered in a new consultation: "that it is blocked, that Sky News is spun off or sold or that Sky News is insulated from the influence of the Murdoch family trust." Former Labour leader Ed Miliband, a "vitriolic Murdoch critic," said that any options other than blocking the deal give the Murdochs a "back door" to get the deal they want. Sky previously said that it will review the future of Sky News, which employs about 500 staff, if the deal is blocked because "closing it down would immediately eliminate media plurality issues blocking the deal" (GUARDIAN, 1/23). REUTERS' Sandle & Holton reported the British government, which will take the final decision on the deal, asked the CMA to judge "if Murdoch had too much influence in Britain and would uphold broadcasting standards." An objection on broadcasting standards would have "likely sounded the death knell for the deal." A hedge fund manager with a stake in Sky said, "Broadcasting standards is not an issue anymore. That's a pretty big positive." The manager cautioned, however, that it was "unclear how motivated the Murdochs were to secure the deal, seeing as they have already agreed to offload it to Disney" (REUTERS, 1/23).
FINAL SAY: In London, Spillett & Hawken reported the final decision over "whether to sink the deal" will be made by the end of May, when the regulator will send its report to new Secretary of State for Culture, Media & Sport Matt Hancock, who will make the final call. Hancock was a culture minister from July '16 before he was appointed to his current role, so he "has kept his counsel on the Sky issue" (DAILY MAIL, 1/23).