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Fox facing Sky News bill

21st Century Fox will have to ensure the annual budget for UK network Sky News remains over £100m (US$130m) to allow it to proceed with its attempt to take full control of parent company Sky.

Matthew Hancock

Earlier this month, UK culture minister Matt Hancock said Fox would have to sell off the news operation to get his greenlight on its proposed £11.7bn deal to buy the 61% of Sky it doesn’t already own. Comcast’s rival £22.1bn bid for Sky has already been given the all-clear.

Now Hancock has stipulated that, in order to move forward with its takeover, Fox must agree to underwrite Sky News for 15 years, ensuring its budget does not fall below £100m each year, up from its current estimated annual budget of around £90m.

Disney has already confirmed it will buy Sky News from Fox, with the Mouse House in the midst of a US$52.4bn deal to take over a slew of the Rupert Murdoch-backed company’s assets.

Disney will have to commit to operate Sky News for at least 15 years and will not be allowed to sell the division unless the UK government gives the OK.

Sky News, which employs around 500 people, is thought to make annual losses of around £20m per year.

Hancock said the proposals would ensure Sky News is “able to operate as a major UK-based news provider and is able to take its editorial decisions independently, free from any potential outside influence.”

Fox’s attempt to buy Sky, resurrecting an earlier bid from 2011, has become mired in regulatory issues after UK regulator the Competition and Markets Authority found concerns over media plurality.

The deals have also been complicated by Disney’s potential acquisition of Fox assets, which Comcast is now also looking to buy.

Disney agreed a US$52.4bn stock deal for Fox assets, including its film and TV studios, US cable networks and international channels, in one of the biggest media stories of 2017.

However, it then emerged Comcast was preparing a bid in the region of US$60bn. Concerns over US regulatory obstacles have lessened since AT&T’s deal for Time Warner made it through the US legal system.

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