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Rupert Murdoch's Sky takeover bid referred to competition authorities Murdoch's Sky bid likely to be referred to competition authorities
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Rupert Murdoch’s proposed £11.7bn takeover of Sky by 21st Century Fox has been dealt a blow after the government said it intended to call in the competition authorities for a further six-month examination of the deal.Rupert Murdoch’s proposed £11.7bn takeover of Sky by 21st Century Fox has been dealt a blow after the government said it intended to call in the competition authorities for a further six-month examination of the deal.
Karen Bradley, the culture secretary, announced the decision in the House of Commons after considering an investigation into the takeover by the media watchdog, Ofcom.Karen Bradley, the culture secretary, announced the decision in the House of Commons after considering an investigation into the takeover by the media watchdog, Ofcom.
She told MPs that she was minded to submit proposed takeover to a further 24-week inquiry by the Competition and Markets Authority on the grounds of media plurality following a recommendation by the communications regulator.She told MPs that she was minded to submit proposed takeover to a further 24-week inquiry by the Competition and Markets Authority on the grounds of media plurality following a recommendation by the communications regulator.
The minister said that Ofcom’s report concluded that the deal might increase the Murdochs’ ability to “influence the overall news agenda and their ability to influence the political process and it may also result in the perception of increased influence”.The minister said that Ofcom’s report concluded that the deal might increase the Murdochs’ ability to “influence the overall news agenda and their ability to influence the political process and it may also result in the perception of increased influence”.
Bradley said that Fox and Sky offered to make undertakings to protect the editorial independence of Sky News for five years in lieu of a referral to the CMA. However, the minister said she had rejected them. Bradley said that Fox had taken the unusual step of offering editorial guarantees around Sky News in its submission to Ofcom to address any potential media plurality issues it may raise in its report. The proposed undertakings included establishing a separate editorial board and a commitment to maintain Sky branded news and funding for five years. However, the minister said she had rejected them.
Ofcom has submitted the findings of three investigations looking at whether the deal would give Murdoch too much control of UK news, if the media mogul is a “fit and proper” owner and whether Fox, which owns the rightwing Fox News channel, will abide by editorial standards such as accuracy and impartiality once it takes full control of broadcasting assets including Sky News. 21st Century Fox already owns 39% of Sky. Ofcom’s report said that the remedies proposed would mitigate the media plurality concerns but could be further strengthened. “I have taken an initial view,” said Bradley. “I can confirm that I have, today, written to the parties indicating that I am minded not to accept the undertakings that have been offered.”
The regulator had submitted the findings of three investigations looking at whether the deal would give Murdoch too much control of UK news, if the media mogul was a “fit and proper” owner and whether Fox, which owns the rightwing Fox News channel, would abide by editorial standards such as accuracy and impartiality once it took full control of broadcasting assets including Sky News. 21st Century Fox already owns 39% of Sky.
On the other two matters, Ofcom said that Fox and Sky met the appropriate standards. The regulator said that an examination of Fox and Sky’s broadcasting compliance records in the UK found that the enlarged company would not “lack a genuine commitment to the attainment of broadcasting standards” and that there were no grounds to justify a referral to competition regulators.
Ofcom’s “fit and proper” test found that the allegations relating to Fox News in the US amount to “significant corporate failures” but that it did not believe that meant that the takeover would mean the company would “lack a genuine commitment to broadcasting standards”.
Bradley is giving parties until 14 July to submit representations before she makes a final decision on her recommendations. She said that she had to be guided by evidence in front of her and that “while there are strong feelings among both supporters and opponents of this merger, in this quasi-judicial process, my decisions can only be influenced by facts”.
But it was the crucial matter of media plurality that Bradley reserved her strongest words. “The reasoning and evidence on which Ofcom’s recommendation is based are persuasive,” she said. “The proposed entity would have the third largest total reach of any news provider - lower only than the BBC and ITN – and would, uniquely, span news coverage on television, radio, in newspapers and online.
“Ofcom’s report states that the proposed transaction would give the Murdoch Family Trust material influence over news providers with a significant presence across all key platforms.”
During Rupert Murdoch’s previous bid in 2011, Jeremy Hunt, who was culture secretary, initally accepted an offer to spin off Sky News to allay media plurality issues raised by Ofcom. But that deal collapsed when Murdoch was forced to withdraw his bid amid public furore over phone hacking at the News of the World.During Rupert Murdoch’s previous bid in 2011, Jeremy Hunt, who was culture secretary, initally accepted an offer to spin off Sky News to allay media plurality issues raised by Ofcom. But that deal collapsed when Murdoch was forced to withdraw his bid amid public furore over phone hacking at the News of the World.
The company bidding this time is 21st Century Fox, which owns the 20th Century Fox film studio and the Fox TV network. It was carved out of Murdoch’s News Corporation empire, as a response to the phone-hacking scandal.The company bidding this time is 21st Century Fox, which owns the 20th Century Fox film studio and the Fox TV network. It was carved out of Murdoch’s News Corporation empire, as a response to the phone-hacking scandal.
Murdoch’s remaining newspapers, including the Sun and the Times, are now part of a separate company, News Corp, although both it and 21st Century Fox are still controlled by the media mogul and his family.Murdoch’s remaining newspapers, including the Sun and the Times, are now part of a separate company, News Corp, although both it and 21st Century Fox are still controlled by the media mogul and his family.