21st Century Fox’s £11.7 billion (US$15 billion) takeover of European satcaster Sky is likely to be referred to the UK’s Competition and Markets Authority.
The UK government’s secretary of state for culture, media and sport, Karen Bradley, made the announcement earlier today after consulting with media regulator Ofcom.
She pointed to “material influence” that Fox owners the Murdoch family would gain in the British news market from the deal, and was therefore “minded” call for a ‘phase two’ investigation on grounds of media plurality.
Fox’s previous attempt to take over the shares in Sky that it doesn’t already own was derailed in 2011 after the phone hacking scandal at Murdoch-owned news publisher News International broke.
Should Fox acquire Sky, it would own the UK’s largest pay TV operator; four newspapers: The Times, Sunday Times, The Sun and News of the World; and news channel Sky News.
Bradley and Ofcom see this as posing problems to both the British news media and political process. However, the broadcasting side of the agreement was cleared.
“We consider these concerns may justify the secretary of state [referring the deal] to the Competition and Markets Authority. I am minded to refer to a phase two investigation on the grounds of media plurality,” said Bradley.
Ofcom has however, passed Fox’s viability as a fit-and-proper owner of Sky.
It noted that while recent sexual misconduct allegations at Fox News in the US were “extremely serious and disturbing”, “the overall evidence available to date does not provide a reasonable basis for Ofcom to conclude that, if Sky were 100% owned and controlled by Fox, it would not be a fit and proper holder of broadcast licences”.
“Our assessment finds that Sky would remain a fit and proper licence holder in the event of the merger,” it added.
Bradley will make a final decision of the potential 24-week probe after allowing Fox and Sky to submit representations by July 14.