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21st Century Fox Takeover of Sky Faces Further U.K. Inquiry 21st Century Fox Takeover of Sky Faces Further U.K. Inquiry
(35 minutes later)
The media giant 21st Century Fox suffered a major setback on Thursday after the British government referred its proposed takeover of Sky, the European satellite broadcaster, to regulators for additional review.The media giant 21st Century Fox suffered a major setback on Thursday after the British government referred its proposed takeover of Sky, the European satellite broadcaster, to regulators for additional review.
The announcement represents a blow for Rupert Murdoch and other executives at 21st Century Fox, including his sons James and Lachlan, who have long tried to add the European satellite provider to the company’s stable of global media businesses. The announcement is a blow for Rupert Murdoch and other executives at 21st Century Fox, including his sons James and Lachlan, who have long tried to add the European satellite provider to the company’s stable.
Karen Bradley, the British culture minister, said that a lengthy investigation into the proposed deal had raised questions over whether the takeover would give members of the Murdoch family too much influence over the British media landscape. As part of the announcements on Thursday, a British regulator said that 21st Century Fox would be considered “fit and proper” to hold broadcasting licenses in the country if the takeover was eventually approved.
That represents a victory, in part, for Rupert Murdoch and other 21st Century Fox executives as they look to end a lengthy sexual harassment scandal at Fox News in the United States.
However, Karen Bradley, the British culture minister, said that an investigation into the proposed deal had raised questions about whether the takeover would give members of the Murdoch family too much influence on the British media landscape.
“The transaction may increase members of the Murdoch Family Trust’s ability to influence the overall news agenda and their ability to influence the political process,” Ms. Bradley said in a statement.“The transaction may increase members of the Murdoch Family Trust’s ability to influence the overall news agenda and their ability to influence the political process,” Ms. Bradley said in a statement.
A representative for 21st Century Fox was not immediately available for comment. The company has until July 14 to respond to the decision.A representative for 21st Century Fox was not immediately available for comment. The company has until July 14 to respond to the decision.
The British government added that the review carried out by the country’s regulators had determined that 21st Century Fox’s proposed takeover would meet local broadcasting standards. The British government added that the review carried out by the country’s regulators had also determined that 21st Century Fox’s proposed takeover would meet local broadcasting standards.
That decision came despite British authorities concluding that executives’ behavior during the sexual harassment scandal at Fox News amounted to “significant corporate failures.”That decision came despite British authorities concluding that executives’ behavior during the sexual harassment scandal at Fox News amounted to “significant corporate failures.”
The deal, valued at 11.7 billion pounds, or $15.1 billion, had prompted concerns almost immediately after it was announced in December. Mr. Murdoch has long coveted total ownership of Sky, a satellite broadcaster he founded in the early 1990s. But the media mogul is a divisive figure in Britain, and a previous bid for Sky was withdrawn amid scandal. The deal, valued at 11.7 billion pounds, or $15.1 billion, for 21st Century Fox to buy the stake in Sky that it does not already own had prompted concerns almost immediately after it was announced in December. Rupert Murdoch has long coveted total ownership of Sky, a satellite broadcaster he founded in the early 1990s. But the media mogul is a divisive figure in Britain, and a previous bid for Sky was withdrawn.
Two politically independent regulators in Britain — the Office of Communications, or Ofcom; and the Competition and Markets Authority — began reviewing the proposed takeover, and attention quickly focused on Ofcom’s investigation, which looked into whether the deal would limit consumer choice and whether 21st Century Fox executives met British broadcasting standards.Two politically independent regulators in Britain — the Office of Communications, or Ofcom; and the Competition and Markets Authority — began reviewing the proposed takeover, and attention quickly focused on Ofcom’s investigation, which looked into whether the deal would limit consumer choice and whether 21st Century Fox executives met British broadcasting standards.
Ofcom also was ordered to review 21st Century Fox’s management, particularly its chief executive, Mr. Murdoch’s son James, to determine whether the company’s leaders were “fit and proper” to retain Sky’s broadcasting licenses. Ofcom was also ordered to review 21st Century Fox’s management, particularly its chief executive, James Murdoch, to determine whether the company’s leaders were “fit and proper” to retain Sky’s broadcasting licenses.
That last test comes with the company trying to put an end to a sexual harassment scandal at Fox News that led to the ouster of its top host, Bill O’Reilly, and of the chairman, Roger E. Ailes. But those issues have resurfaced in the review of the Sky deal. In its ruling, the British regulator found that the scandals at Fox News had been extremely serious and disturbing, according to its report published on Thursday.
“It seems clear that there were significant failings of the corporate culture at Fox News,” Ofcom said in a statement.
But the regulator added that it had found no evidence that the issues at Fox News had been extended through 21st Century Fox, nor that any of the company’s executives were aware of the misconduct before they were informed in July 2016.
Despite scolding 21st Century Fox, Ofcom passed the company as a “fit and proper” holder of British broadcasting rights. That decision removes uncertainty for the media giant as it tries to put an end to a sexual harassment scandal at Fox News that led to the ouster of its top host, Bill O’Reilly, and of the chairman, Roger E. Ailes.
James Murdoch, who is also the chairman of Sky, said last month that he was confident the proposed transaction would be completed by the end of the year.James Murdoch, who is also the chairman of Sky, said last month that he was confident the proposed transaction would be completed by the end of the year.
The review into 21st Century Fox’s offer also came at a difficult time for the British government, which must eventually decide whether to approve or reject the takeover. The review into 21st Century Fox’s offer comes at a difficult time for the British government, which must eventually decide whether to approve or reject the takeover.
Prime Minister Theresa May was unable to win a majority in parliamentary elections this month, and politicians in Britain are also focused on the beginning of negotiations to leave the European Union, leaving little time to consider the proposed takeover. Opposition lawmakers, and even some inside Mrs. May’s Conservative Party, have balked at the deal. Prime Minister Theresa May was unable to win a majority in parliamentary elections this month, and politicians in Britain are focused on the beginning of negotiations to leave the European Union, leaving little time to consider the proposed takeover. Opposition lawmakers, and even some inside Mrs. May’s Conservative Party, have balked at the deal.
Rupert Murdoch has tried to buy Sky before.Rupert Murdoch has tried to buy Sky before.
He made a bid for the satellite giant in late 2010, but was forced to rescind the offer after a phone-hacking scandal at The News of the World, a British newspaper — since shut down — that was then part of News Corporation, a predecessor to 21st Century Fox.He made a bid for the satellite giant in late 2010, but was forced to rescind the offer after a phone-hacking scandal at The News of the World, a British newspaper — since shut down — that was then part of News Corporation, a predecessor to 21st Century Fox.
At the time, British regulators criticized James Murdoch’s handling of the scandal, though the authorities eventually cleared Sky as “fit and proper.”At the time, British regulators criticized James Murdoch’s handling of the scandal, though the authorities eventually cleared Sky as “fit and proper.”
The most recent attempt to buy Sky is part of 21st Century Fox’s efforts to keep pace with digital rivals like Netflix and Amazon, which have used their streaming services to win over consumers increasingly accustomed to watching movies and television programs on mobile devices.The most recent attempt to buy Sky is part of 21st Century Fox’s efforts to keep pace with digital rivals like Netflix and Amazon, which have used their streaming services to win over consumers increasingly accustomed to watching movies and television programs on mobile devices.
The acquisition of Sky, experts say, would give 21st Century Fox not only a Pan-European satellite network and access to content like the rights to the English Premier League, but also control of Now TV, Sky’s online streaming service.The acquisition of Sky, experts say, would give 21st Century Fox not only a Pan-European satellite network and access to content like the rights to the English Premier League, but also control of Now TV, Sky’s online streaming service.
That could allow 21st Century Fox, which also owns a minority stake in Hulu, to compete with its digital rivals at a time when consumers are forgoing traditional programming to stream content online.That could allow 21st Century Fox, which also owns a minority stake in Hulu, to compete with its digital rivals at a time when consumers are forgoing traditional programming to stream content online.