British media secretary Karen Bradley said she was persuaded that Twenty-First Century Fox’s bid could give the Murdoch family excessive influence over the media, after regulator Ofcom assessed the impact of the deal.
“The proposed entity would have the third largest total reach of any news provider, lower only than the BBC and ITN, and would, uniquely, span news coverage on television, radio, in newspapers and online,” said Bradley.
The media secretary said she would take a final decision on July 14, giving Fox two weeks to address her concerns. Shares in Sky rose on hopes a full investigation could still be averted by concessions over its 24-hour TV news channel.
Murdoch, and his family have long coveted full control of Sky, despite the damaging failure of a previous attempt in 2011 when their British newspaper business became embroiled in a phone-hacking scandal which forced them to abandon that bid.
A public inquiry into the affair revealed deep ties between Murdoch and the political establishment, making the renewed bid potentially toxic for prime minister Theresa May’s government which is fighting for survival after losing its majority.
Bradley had asked regulators to examine if Fox would have too much control of the media, and whether it would be committed to upholding broadcasting standards if allowed to buy the company which broadcasts in the UK and Ireland, as well as in Germany, Austria and Italy.
Fox said it was disappointed by the UK government’s rejection of its plans to maintain editorial independence of Sky News, and said a full investigation could push the deal’s completion date back to next June.
“We will continue to work constructively with the UK authorities,” it said. During the previous takeover attempt Murdoch proposed spinning off Sky News into a separate company. However, Ofcom said it was concerned separating Sky News could be counter-productive, given the potential difficulties in funding the service outside of the Sky structure.
The British government said Ofcom had no concerns about Fox’s genuine commitment to broadcasting standards but wanted to look further into the impact a deal would have on the range of media providers in the country. The UK’s political leaders have long sought the backing of Murdoch and his Times and Sun newspapers, sparking accusations that he uses his media empire to play puppet master in the corridors of power.
Tom Watson, deputy leader of the opposition Labour Party and a long-standing Murdoch critic, said the government was going through the motions and would ultimately approve the deal. “The parties will offer up something new, which they always had in their back pockets, the secretary of state will accept them, as she always planned, and this merger will go ahead,” he said.
History shows, he said, that any concession by the Murdochs would not be “worth the newsprint” it was published on.