Saturday, 24 February, 2018

United Kingdom regulator comes out against Fox-Sky deal

Britain's competition regulator said 21st Century Fox's takeover of Sky is not in the public interest because it would give Rupert Murdoch too much influence Murdoch's Fox, Sky Deal Against the Public Interest, UK Regulator Says
Nellie Chapman | 23 January, 2018, 11:26

In its decision, the CMA dismissed concerns about broadcasting standards, saying that Fox and Sky had a good record in this area.

Following a referral from the Secretary of State for Digital, Culture, Media and Sport, the Competition and Markets Authority (CMA) has been investigating the deal on two grounds: media plurality and commitment to broadcasting standards. Murdoch says Facebook should pay fees to "trusted" news producers for their content. Murdoch, whose companies own The Wall Street Journal, Fox News, the New York Post and other media properties, said Monday, Jan. 22, 2018, that publishers are "enhancing the value and integrity of Facebook through their news and content but are not being adequately rewarded for those services".

"The media plurality concerns identified mean that, overall, the CMA provisionally concludes that the proposed transaction is not in the public interest".

"The provision of news has changed significantly over the last decade with the growth of online news", the CMA acknowledged in its report.

"The specific concern is that the Transaction might reduce the independence of Sky's news and current affairs content on Sky News, and this, in turn, could lead to a reduction in the diversity of viewpoints across the news and current affairs offerings operated by the media 6 enterprises controlled by the MFT [Murdoch Family Trust], including Sky News, The Sun, The Sun on Sunday, The Times, and The Sunday Times", the CMA wrote.

Sky shares rose 2 percent in early trade. This was previously seen as a major obstacle to the deal progressing.

Sky said in a separate statement that it will look at possible remedies to address the CMA's issues. This deal will face regulatory scrutiny itself. "It is therefore uncertain whether, when or how the transaction will be completed". However it had not yet been given the nod in Britain, where concerns linger over the influence of Australian-born U.S. tycoon Murdoch. The CMA took account of the policies and procedures Fox has in place to ensure broadcasting standards are met.

In a statement, Twenty-First Century Fox said: "Today's provisional findings move our proposed Sky transaction forward to the next phase of the regulatory review process".

Regarding plurality, Fox said it was "disappointed" by the CMA's provisional findings, adding that it would "continue to engage" with the CMA ahead of the publication of the final report in May. The report will then go to the Culture Secretary, Matt Hancock, who will make the final decision.

Sky is expected to become part of the Disney empire if the Mouse House's deal for Fox proceeds.

Fox and Sky didn't discuss their openness to possible remedies, but analysts widely expect them to propose a new governance set-up for Sky News or even a possible sale.

Murdoch's 21st Century Fox had sealed a €14 billion deal to take control of 61% of Sky back in December 2016.

The CMA notes that the Murdoch family already have significant sway when it comes to influencing public debate in the UK. London-based Sky operates an influential United Kingdom news channel as part of its European pay TV business. It is an established broadcaster here, having held licences for over 20 years.

Anne Lambert, chair of the independent investigation group, said: "Media plurality goes to the heart of our democratic process".

"It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda", she added.