Sky bid faces wider UK probe

The UK plans to expand its probe into 21st Century Fox’s bid for broadcaster Sky, exposing Rupert Murdoch and his family to further scrutiny over governance at their media empire and adding to the uncertainty about the £11.7bn (€12.8bn) deal.

UK Culture Secretary Karen Bradley is inclined to ask the Competition and Markets Authority to conduct a months-long investigation into Fox’s commitment to broadcasting standards, in addition to the widely expected review over whether the deal would give the Murdochs too much influence over UK media, she said. The scope of the planned CMA referral surprised investors, given Ms Bradley had initially said she was inclined to confine the review to questions of media-influence.

Shares of Sky, which is 39% owned by Fox, fell as much as 5.1% at one stage but later pared most of the losses.

Fox chief executive James Murdoch and fellow managers now face the prospect of months of interrogation over recent events at scandal-hit Fox News and past corporate governance failings in the Murdoch media empire.

Wrongdoing at News Corp’s newspapers scuppered a 2010 attempt to buy the rest of Sky, while this time, sexual — and racial — harassment allegations at Fox News have given opponents ammunition to slow a deal that initially appeared on track to sail through.

Ms Bradley said she received 43,000 comments on the deal, most of them part of activist campaigns against the merger going ahead.

Around 30 letters were substantive, she said, raising potentially new evidence or commenting on the approach of communications regulator Ofcom.

“I have taken careful account of all relevant representations and Ofcom’s advice,” Ms Bradley said.

“I am now minded to refer the merger to the CMA on the grounds of genuine commitment to broadcasting standards.”

James Murdoch and Fox co-chairman Lachlan Murdoch had previously warned that any delay would signal to other companies that the UK isn’t “open for business” as the country leaves the EU.

Britain is under pressure to reassure investors of the country’s future path amid stalling Brexit talks with the EU.

Ms Bradley said she will give Fox 10 days to offer feedback on her “minded-to” decision on broadcasting standards, before proceeding with the CMA referral.

She will make the final decision on whether to clear the merger after considering the CMA’s feedback, which could come as late as March 2018.

Bloomberg

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