Murdoch: Fox has scale to compete

21st Century Fox’s executive chairman Lachlan Murdoch has insisted the company has “the required scale” to compete in the digital era, amid recent suggestions it was looking to sell off its assets to Disney.

Lachlan Murdoch

Murdoch told attendees of the annual meeting of the company’s stockholders that the firm also remained confident its proposed takeover of European satcaster Sky would go through by mid 2018.

“There’s a lot of talk about the growing importance of scale in the media industry. Sub-scale players are finding it difficult to leverage their position into new and emerging video platforms. Let me be very clear – we are not in that category,” Murdoch said in his presentation.

“We have the required scale to continue to both execute on our aggressive growth strategy and deliver significant increased returns to shareholders.”

His comments come after reports emerged last week that 21st Century Fox had held initial talks with Disney about the potential sale of its television and film production assets. Some in the industry believe the company does not have the clout to compete with the likes of Google, Apple, Facebook, Amazon and Netflix.

Murdoch appeared to scotch such suggestions, highlighting the company’s inclusion in new streaming packages at better financial terms than it achieved in traditional services.

On Fox’s intended US$15bn acquisition of Sky, which is currently being reviewed by UK regulator the Competition and Markets Authority (CMA), Murdoch remains confident.

The takeover hit another barrier recently after media regulator Ofcom ruled the company’s Fox News channel had breached broadcasting standards in relation to impartiality rules through its coverage of the Manchester terrorist attack in May.

As part of her deliberation in referring the company to the CMA, culture secretary Karen Bradley, also expressed concerns about the recent sexual harassment scandals at Fox News in the US.

Roxana Tynan, speaking on behalf of longstanding shareholder the Nathan Cummings Foundation, drew attention to this fact during the shareholder meeting, stating the scandals “have once again imperilled efforts” to gain control of Sky.

However, Murdoch reiterated the company’s belief that the takeover would “close by the middle of next year.”

“The European Commission has cleared the transaction following an anti-trust review and independent UK regulator Ofcom cleared it from a fit-and-proper perspective and found no issues in relation to broadcasting standards,” he said. “We’re confident the CMA will arrive at a similar conclusion.”