Could Sky really shut down its news channel?

Claims by Sky that it could be willing to close its news channel are “credible” and should not be dismissed, media analysts said yesterday.

The broadcaster has threatened to close the loss-making Sky News if the channel proves to be an obstacle in Rupert Murdoch’s £11.7bn 21st Century Fox bid.

The Competition and Markets Authority (CMA), which is investigating the deal amid concerns it could threaten media plurality in the UK, has been told by Sky that is should not “assume the continued provision of Sky News in its current form [if it] unduly impeded merger and/or other corporate opportunities available in relation to Sky’s broader business”.

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The BBC understands that closing Sky News would only be an “option of last resort”, and that the broadcaster would try to find a buyer for the media company before that eventuality. However, the BBC’s media editor Amol Rajan said it was a “credible threat” and should not be dismissed lightly.

“It loses tens of millions of pounds,” says Rajan, “and I think the independent directors of Sky are sending a very clear message... that if they had to choose, maybe they’d prefer for commercial reasons to do the deal with 21st Century Fox rather than continue to fund the losses at Sky News.”

On Monday, The Daily Telegraph reported that 21st Century Fox’s “optimism is waning” over whether the deal will be completed, after it emerged that the company had held talks with Disney to sell its stake in Sky, among other assets.

It follows news that media regulator Ofcom twice ruled that 21st Century Fox-owned Fox News channel had breached UK broadcasting impartiality rules. The US-based channel was pulled from British airwaves in August, in what some described as an attempt to assuage the regulator.

In September, the Culture Secretary effectively overruled Ofcom by referring the Fox-Sky takeover for scrutiny over media plurality and broadcasting standards.

The CMA is due to publish the provisional findings of its investigation in December. Were the deal to go ahead, the Murdoch family would take full control of The Times, The Sunday Times, The Sun, The Wall Street Journal, Sky News and talkSPORT.