21st Century Fox Sky Takeover – Ofcom and CMA Approval Delaying Decision

• August 10, 2017
• By Pete Nisbet
• 0

A 21^st Century Fox Sky takeover has been under discussion for several months. The £11.7 billion takeover of Sky by 21^st Century Fox was first proposed around eight months ago. However, it has been delayed pending approval from regulators.

It had been hoped the deal could be completed this year. However, regulators have been concerned that the takeover would give the Rupert Murdoch family excessive control over the news in the UK.  Rupert Murdoch currently controls both Fox and Sky, although owns only 39% of Sky shares.

Is Fox News and Sky News Too Much For One Firm?

Murdoch is now seeking to purchase the remaining 61%. This would then give him and sons, Lachlan and James Murdoch, complete control over what some believe to be too much. The Murdoch family would control 21^st Century Fox News and Sky (including Sky News). It would also own the UK newspapers The Times, The Sunday Times and The Sun. Many people believe that this would give the Murdoch family excessive influence over UK politics.

Risks of 21st Century Fox Sky Takeover

UK Culture Secretary, Karen Bradley, said in June that she was concerned about risks of ‘media plurality.’ She also stated then that she may refer the 21at Century Fox Sky takeover deal to the Competition and Markets Authority (CMA) for further review. The regulator, Ofcom, will also take a closer look at the deal. Karen Bradley has asked Ofcom to clarify certain aspects of its previous investigation.

This will delay any decision until the end of this month. Should Karen Bradley refer the matter to the CMA, then it will likely be next year before final approval is given – if at all. James Murdoch stated that he is confident of the deal going through. He may be correct.

How Much is Fox Media Control involved?

Many who support the Fox Sky takeover are playing down the ‘media control’ aspect of the deal. They make the point that there are other news channels on TV, and the UK has many more daily and weekly newspapers. There is therefore still a plenty choice for the UK public.

It may be that the Murdoch family may not control sufficient of the UK media to significantly delay the 21^st Century Fox Sky takeover. Rupert Murdoch is confident that the deal will be completed in the first half of 2018. We shall see if his confidence is well placed.