21st Century Fox’s proposed takeover of European satcaster Sky faces a lengthy enquiry over its effect on media plurality in the UK after the US company reportedly ruled out making concessions.
UK culture secretary Karen Bradley, who referred the £11.7bn (US$15bn) deal to regulator Ofcom in March, said last month that she was “minded to” refer the takeover to the Competition and Markets Authority because of concerns it could affect media plurality.
She said Fox could propose concessions to avoid a full investigation, but according to reports, the Rupert Murdoch-owned company has declined and chosen to instead let the competition regulator undertake a full examination.
Fox had already proposed some undertakings to Ofcom prior to Bradley’s comments, including setting up a separate editorial board for Sky News and retaining the news division’s current funding levels for five years.
While Ofcom said the remedies would mitigate the plurality risk, Bradley said she was not inclined to accept the changes. She is expected to make a final decision on whether to refer the deal later today.
A competition investigation is expected to take around six months and will also allow critics of the takeover, who fear it would hand Murdoch too much power over the UK’s news agenda, more time to raise their objections.
The takeover would hand Murdoch full control of Sky, which is already the largest pay TV operation in Europe, to go with the UK newspapers in his company News Corp, including The Times, The Sunday Times and The Sun.
Fox’s previous attempt to buy Sky was aborted in 2011 by Murdoch following the phone-hacking scandal that hit his UK newspaper empire.
More recently, the company has been hit by reports of sexual harassment at its US cablenet Fox News. Those allegations saw Fox News veterans Roger Ailes, who died earlier this year, and host Bill O’Reilly leave the company.
Around US$13m was reportedly paid to five women to settle their complaints over O’Reilly’s alleged behaviour.
Fox previously said that if the competition enquiry were to go ahead, it would expect the deal to be closed by June 30 next year. That would prompt Fox to pay a special 10p dividend to shareholders, totalling around £172m. If the company walks away from the deal it has agreed to pay a £200m break fee.
The takeover plan had already received the green light from the European Commission’s competition authorities, which said its market investigation had found the proposed transaction “would raise no competition concerns,” and from media watchdogs in Ireland.
Sky agreed to sell the remaining 61% of its business not owned by Fox late last year.