Yahoo Finance Rupert Murdoch’s 21st Century Fox to formally notify EU of Sky bid
Rupert Murdoch’s 21st Century Fox is expected to formally notify the European competition regulator of its £11.7bn takeover offer for Sky later this week, after which the UK culture secretary will have to decide whether to launch an investigation into the extent of Murdoch’s control of UK media.
From the point the European commission makes Fox’s bid notification public, Karen Bradley will have 10 working days to decide whether to issue a public interest intervention notice, or PIIN.
Bradley will have to examine what concerns, if any, are raised by the deal and she will look at areas including the potential concentration of media power and whether there needs to be a test to determine whether Fox is committed to the required editorial standards, such as accuracy and impartial news coverage.
Fox’s deal to snap up the 61% of Sky it does not already own will give Murdoch control of Sky News and pay-TV operations in the UK, Germany, Austria and Italy.
His ownership of UK news media also includes the Times, the Sunday Times and the Sun as well as radio group TalkSport, which he controls through a separate company, News Corp.
Given the level of opposition to Murdoch’s first bid for Sky in 2011, which was eventually abandoned because of the fallout from the phone-hacking scandal that was engulfing his UK newspapers, Bradley is expected to refer the deal to media regulator Ofcom.
If asked, Ofcom will carry out a public interest test on the deal, reporting back within 40 days. If there are no concerns, Bradley must clear the bid.
If Ofcom raises concerns, however, she must decide whether to accept an undertaking from Fox to address them. In 2011, Murdoch’s bid for Sky resulted in a deal to spin off Sky News to quell media plurality issues before the takeover was abandoned.
Murdoch’s son James, now chief executive of Fox and chairman of Sky, has already said he does not believe any “meaningful concessions” will need to be made to authorities this time round.
European regulators have up to 25 days to look at competition issues but are almost certain to clear the takeover as they previously gave the greenlight to the original bid late in 2010, as well as Sky’s 2014 £7bn deal to buy its sister operations in Germany and Italy.
In a submission to Bradley on Tuesday, the Media Reform Coalition and online activist network Avaaz called for Murdoch’s Sky bid to be rejected on competition grounds alone.
The campaigners published new reseach which they claimed showed that the overall market shares of both Murdoch-owned newspapers as well as Sky remain “materially unchanged” since 2011, when media regulator Ofcom raised concerns about the previous takeover bid.
Justin Schlosberg, chair of the coalition, said the situation in terms of media competition was “definitely no better than last time and probably worse”.
In support he cited the fact that the Sun’s audience reach had increased after the removal of the paywall for its digital content despite declining print circulation; the increased reach for Sky television services through digital services such as Youtube; and research from Cardiff university last year that the newspapers had a disproportionate impact on broadcasters.
Cardiff University research on coverage of the 2015 general election “demonstrates the influence of national newspapers – and News UK titles in particular – over the issue agenda of broadcasters including the BBC”, it said.
An Ofcom investigation found in 2012 that Sky remained a “fit and proper” owner of a broadcast licence, despite the phone-hacking affair that embroiled its then parent company. However, it published a scathing assessment of James Murdoch – then the chief executive of his father’s UK newspaper group and chairman of Sky – finding that his conduct repeatedly fell short of the standards expected.
Ofcom has the right at any stage to launch a new investigation. However, the regulator has had a chance to air any concerns about James Murdoch and Sky since it was announced he was returning as chairman in January.
In October, he had to rely on the support of Fox, Sky’s largest shareholder, to win approval for his return after more than 50% of independent shareholders voted against his reappointment.
Rupert Murdoch’s last bid brought together an unlikely alliance of media groups to oppose the deal including BT, the BBC, Channel 4 and the publishers of the Daily Mail, Daily Telegraph and Guardian.
So far, only a number of Fox and Sky’s pay-TV rivals have said that they intend to voice their opposition to the alleged dominance the deal will give Murdoch bidding for top-flight sport, movies and TV shows.
Fox could make formal notification to the the European commission as soon as Thursday, which happens to coincide with James Murdoch speaking at the annual Enders Analysis media and telecoms conference in London, although it could slip into next week.
Fox and Sky declined to comment.
