Yahoo Finance Culture secretary keeps Rupert Murdoch waiting over Sky deal
Rupert Murdoch’s bid to take over Sky has been dealt a blow after the culture secretary said she needed more time to deliberate before calling in the competition regulator after being inundated with tens of thousands of submissions opposing the £11.7bn deal.
Karen Bradley said she had hoped to be able to make a final decision on whether to ask the Competition and Markets Authority (CMA) to investigate the deal before parliament breaks up for summer on Friday.
However, Bradley said she had received “tens of thousands of representations”, many of which duplicated each other, which needed to be looked at.
“A final decision can only be made after fully considering all relevant evidence on both the plurality and commitment to broadcasting grounds,” she said. “Given the consultation only closed on Friday, there has not been time to consider all the representations.”
James and Lachlan Murdoch, as well as Fox’s lawyers, Allen & Overy, have written last-minute letters arguing that Bradley has a duty to expedite referring the deal to the CMA before the parliamentary summer break, which runs until 5 September.
Bradley said she was still minded to refer the bid to the CMA to investigate on media plurality grounds, but added that she would consider asking it to look at whether the Murdochs will adhere to broadcasting standards in the UK.
The media regulator, Ofcom, on which Bradley has based her decisions to date, said it found no grounds to ask the CMA to look at issues including the sexual harassment scandal at Fox News and issues relating to phone hacking.
Opponents including Ed Miliband and Vince Cable, longstanding critics of the Murdochs, have argued that not making the issue of broadcasting standards part of the CMA review could leave Bradley’s decision open to a judicial review.
Bradley said she expected to deliver her final decision on the grounds on which to refer the deal in “the coming weeks”, a timeline that will provide Fox with some succour.
Given that the CMA can take from 24 to 36 weeks to reach a conclusion, Fox was keen not to have to wait until parliament returns on 5 September to officially hear that the deal was to be referred and for the investigation clock to start.
In an effort to speed up the process, Fox decided not to submit an improved offer to spin off Sky News, knowing it would have significantly held up the consultation stage of the process, which is headed for referral in any case.
“I expect to be in a position to come to a final decision on referral, including in respect to the broadcasting standards grounds, in the coming weeks, and potentially during summer recess,” Bradley said. “That may mean I have to make a decision before parliament returns.”
The deputy Labour leader and shadow culture secretary, Tom Watson, chastised Bradley, saying she did not need to operate on Fox’s corporate timeline and there was no need to come back with a decision while parliament was in recess.
“Parliament must have the opportunity to scrutinise any decision she makes,” he said.
Bradley reminded him that she was in a quasi-judicial role and under the 2002 Enterprise Act there was a “legitimate need for a prompt decision without undue delay”.
She added that for broadcasting standards to be made part of the CMA investigation, she would need to see significant new evidence.
“Nothing I have seen so far has changed my mind, but I am going to look at all representations I have received,” Bradley said.
“I will look at them all to see what evidence they provide. Ofcom’s report on broadcasting standards was clear, unequivocal, there were no grounds on which I can refer. I am therefore looking [to see if there is any] new evidence, new substantive evidence.”
Fox said it has had a strong broadcasting record in the UK and urged Bradley to move forward with the referral process.
“For over 25 years, 21st Century Fox and Sky have been proud broadcasters of good standing in the UK, a responsibility we take very seriously,” a Fox spokeswoman said. “We respect the importance of regulatory scrutiny, and we continue in our commitment to work constructively with authorities, as we have done since this process began. In light of the transaction’s benefits to the UK creative economy, we would urge the secretary of state to complete the regulatory process expeditiously.”
Sky shareholders can look forward to a £172m special dividend, which the satellite company said it would pay out if the deal did not complete this year.
The delay in completion means Sky investors will now also receive a further interim dividend of up to £224m, usually paid out at the end of March. Fox has promised a £200m break fee if the deal fails to get done.
