Culture Secretary Karen Bradley has said she is “minded” to order an Ofcom investigation into the planned £11.7 billion takeover of broadcaster Sky by Rupert Murdoch’s 21st Century Fox, over concerns about media plurality and broadcasting standards.
In a statement issued as the broadcasters formally notified the European Commission of the planned merger, Ms Bradley stressed that she has not yet taken a final decision on whether to intervene.
She has written to both companies asking for them to make written representations by March 8, with the aim of announcing a final decision on intervention in the week commencing March 13.
“I have today written to the parties to inform them that I am ‘minded to’ issue a European Intervention Notice on the basis that I have concerns that there may be public interest considerations – as set out in the Enterprise Act 2002 – that are relevant to this proposed merger that warrant further investigation,” said Ms Bradley.
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“To be clear – I have not taken a final decision on intervention at this stage. In line with the guidance that applies to my quasi-judicial role I am inviting written representations from the parties and will aim to come to a final decision on whether to intervene in the merger within 10 working days of today’s notification.
“In January I made clear that I would make this quasi-judicial decision independently, following a process that is scrupulously fair and impartial and as quickly as possible with all relevant information in front of me.”
A decision to intervene would not block the deal, which envisages Fox paying £10.75 per share for the 61% of Sky it does not already own – valuing the Game Of Thrones broadcaster at £18.5 billion.
Instead, it would trigger an Ofcom assessment of public interest considerations as well as a Competition and Markets Authority report on jurisdiction, to be considered by Ms Bradley acting in her quasi-judicial role.
In her statement, she said that Department for Culture, Media and Sport analysis had highlighted concerns over the deal’s impact on “the need for there to be a sufficient plurality of persons with control of the media enterprises serving audiences in the UK” and “the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine commitment to attaining broadcasting standards objectives”.
The deal, which shareholders will still have to vote on, comes five years after the media tycoon’s last tilt at taking full control of the business through News Corporation.
That bid was derailed after the company – which owns The Sun and The Times – was forced to abandon the bid when it became embroiled in the phone-hacking scandal involving News International.
Bradley promised to update MPs on her actions in a statement to the House of Commons on March 6.
In a statement, 21st Century Fox said: “We note the statement issued by the Secretary of State following formal notification of the proposed transaction.
“As we have previously indicated, we anticipate regulators will undertake a thorough review of the transaction, and we look forward to engaging with them as appropriate.
“We believe the combination of 21st Century Fox and Sky will create a company best suited to compete in a rapidly evolving industry, and are confident that the transaction will be approved based on a compelling fact set.”
Campaign group Hacked Off said the deal should be referred to Ofcom.
Joint executive director Dr Evan Harris said: “We are asking the Secretary of State to place the public interest above the Murdochs’ editorial and commercial agendas and refer this bid for independent scrutiny by Ofcom.
“She should use her power to specify further public interest grounds of fitness and propriety of ownership, as well as applying appropriate plurality tests that take into account market dominance, and demanding safeguards to ensure the editorial independence of Sky News.
“Holders of broadcasting licences are required by Ofcom to be ‘fit and proper’ under the Broadcasting Acts, but this ongoing statutory duty of Ofcom does not apply to those bidding to become licence holders.
“This loophole can and should be addressed by the Secretary of State referring this bid to Ofcom on these grounds”.
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