UK refers Fox bid for Sky to competition regulator

Sep 13, 2017, 00:21
UK refers Fox bid for Sky to competition regulator

While, the UK's broadcast regulator, Ofcom, has previously expressed concerns that if the Murdock family took over the entire of Sky it may have too much power over the UK's media ecosystem.

One of them, former Labour Party leader Ed Miliband, said Monday that Fox News should serve as a cautionary tale.

"These are matters the CMA may wish to consider in the event of a referral", Bradley said.

The long drawn out bid process has seen a number of investigations by United Kingdom broadcast regulator Ofcom as to the worthiness of the second attempt by Rupert Murdoch to take total control of a company in which he has held a 39.1% stake, a hugely controversial move given how the United Kingdom media sector has not yet fully revered from the phone hacking scandal which engulfed the previous attempt to buy the hugely successful pay-TV operator.

Karen Bradley told parliament she was minded to refer the deal to the competition regulator on the grounds of media plurality and on the grounds of commitment to broadcasting standards. She also wants the CMA to investigate corporate governance issues at Fox, despite Ofcom believing that these concerns do not warrant a referral.

I also asked Ofcom to consider whether any of the new, substantive representations I received affected its assessment.

She has consistently said she would be "minded" to refer the deal to a CMA investigation but wanted to ensure any decision was "fair and impartial".

Rupert Murdoch's bid to take full control of Sky could be disrupted or blocked completely after the government unexpectedly raised a series of concerns about how Fox News has been run in the USA and the potential "Foxification" of the United Kingdom broadcaster. She said she has given the parties 10 working days to respond, adding: "Following receipt of any representations from the parties I will aim to come to my final decision in relation to both grounds as promptly as I can".

"The evidence before us of senior management efforts to rectify the situation, which included dismissal of those directly responsible, our judgment was that. there were not concerns which may justify a reference on grounds of the broadcast standards", Ofcom said.

However, in its latest update, Ofcom clarified it did have "non-fanciful concerns" on broadcasting standards. She was not confident that weaknesses in Fox's corporate governance arrangements were incapable of affecting compliance in the broadcasting standards context. "On the evidence before me, I am not able to conclude that this raises non-fanciful concerns". Shares of Sky, which is 39 per cent owned by Fox, fell as much as 5.1 per cent, the biggest drop since the UK's June 2016 vote to leave the European Union. The conglomerate in December agreed to buy the remaining roughly 61 percent stake in Sky for 11.7 billion pounds, which was about $14.5 billion at the time, or $15.2 billion now.

Bradley was under high pressure to carry out further investigation.

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