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Sky-Fox takeover deal likely to face competition probe | |
(35 minutes later) | |
The culture secretary has said she is "minded to" refer Rupert Murdoch's 21st Century Fox takeover of Sky to the competition watchdog. | |
Karen Bradley's decision is a blow to the media mogul's hopes of having the £11.7bn deal waved through without further scrutiny. | Karen Bradley's decision is a blow to the media mogul's hopes of having the £11.7bn deal waved through without further scrutiny. |
Mr Murdoch already owns 39% of the satellite broadcaster. | Mr Murdoch already owns 39% of the satellite broadcaster. |
An earlier attempt to take over Sky was abandoned in the wake of the phone hacking scandal. | An earlier attempt to take over Sky was abandoned in the wake of the phone hacking scandal. |
Ms Bradley told the Commons that Ofcom's report into the deal found it risked the Murdoch family having "increased influence" over the UK's news agenda and the political process. | |
"On the basis of Ofcom's assessment, I confirm that I am minded to refer to a phase two investigation on the grounds of media plurality," she said. | |
The parties involved can make representations to the culture secretary until Friday 14 July, when she will make a further decision about referring the deal to the Competition and Markets Authority. | |
Ofcom said it had no concerns about Fox's genuine commitment to broadcasting standards, which Ms Bradley said was a second test for approving the deal. | |
As a result she told MPs she was "minded not to refer" the bid for a phase two investigation in relation to those concerns. | |
"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, not opinions - and by the quality of evidence, not who shouts the loudest," she said. | |
Tom Watson, the shadow culture secretary, told the Commons that "nothing about this decision is a surprise" as he predicted the government would eventually allow the merger to go ahead. | |
He said if James Murdoch, who is both chairman of Sky and chief executive of Fox, could pass a "fit and proper" test, "then that says more about the rules than it does about Mr Murdoch". | |
"It's clear that the rules need to be reviewed and if the current Conservative government won't do that then the next Labour government will." | |
'Condemned' | |
Mr Watson said undertakings from the Murdoch family were "not worth the newsprint they are written on" as he warned that lessons had not been learned from the phone-hacking scandal. | |
He also accused the Conservatives of forming "an implicit bargain" with the Murdochs as he pushed Ms Bradley to order part two of the Leveson Inquiry into phone-hacking. | |
The culture secretary claimed Mr Watson was making a "cynical" attempt to politicise the issue and to prejudge the decision. | |
Evan Harris, executive director of the lobby group Hacked Off, said it condemned Ms Bradley's failure to refer the bid on commitment to broadcasting standards grounds. | |
"The Secretary of State must now begin Leveson part two immediately, and allow that inquiry to report before considering this merger further," he said. | |
The deal was approved by European Commission competition authorities in April. | |
Shares in Sky were 3.2% higher at 988p in afternoon trading, valuing the company at almost £17bn. | |
George Salmon, a Hargreaves Lansdown analyst, said the £4.2bn cost of securing Premier League rights had prompted Sky to reduce offers and discounts. The number of customers leaving was about 12% - its highest level since the financial crisis. | |
"Sky still has an impressive customer base of over 22m, but reducing churn, and adapting to this new environment by expanding its on-demand services such as Now TV, will surely be the main task for its future management, whoever that ends up being," he said. |