The planned $15bn (£10.75bn) takeover of Sky by 21st Century Fox would give the Murdoch family too much influence over British news providers and should only proceed with concessions, the UK Competition and Markets Authority (CMA) has provisionally ruled.
The decision by the competition watchdog is “another impediment for the Murdochs, who have seen the transaction hit by unexpected regulatory delays and a furore over sexual harassment allegations at Fox News in the US”, says Bloomberg. “Now they face negotiations with antitrust officials and politicians to get the Sky deal through, with the aim of ultimately selling the company on to Walt Disney Co.”
The CMA ruled that the deal - which would see Fox take control of the 61% of Sky that it does not already own - would not be against the public interest on the grounds of broadcasting standards. However, the regulator said, the deal would give the the Murdoch Family Trust (MFT) too much influence over public opinion and the political agenda, the BBC News website reports.
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MFT news outlets are currently consumed by nearly a third of the UK’s population across TV, radio, online and newspaper, according to the BBC.
There are three possible ways for billionaire Rupert Murdoch to satisify the UK regulatory concerns, Reuters says, including “spinning off or divesting Sky News, or insulating Sky News from Fox’s influence. A third option is to block the deal outright.”
The media mogul may have seen the UK regulatory objections coming. In December, Murdoch began dismantling his media empire, announcing a $52.4bn (£37.5bn) deal with Walt Disney to sell assets including the Fox film studio and a controlling stake in Sky.
The CMA report on the Sky takeover bid says that if the proposed Disney deal went ahead as planned, it would “significantly weaken” the link between the Murdochs and Sky, “which is at the root of our provisional concerns about media plurality”. The regulator added that “on the face of it, these concerns would [then] fall away”.
Disney’s acquisition of Fox assets is also likely to face US and European regulatory scrutiny, which may not be concluded until well after the UK review of the Sky takeover, the Financial Times reports.
Fox said in a statement that it was disappointed by the CMA’s findings.
