Culture Secretary Karen Bradley has said she is minded refer Fox’s proposed takeover of Sky to a fuller investigation by the Competition and Markets Authority over media plurality concerns.
Rupert Murdoch’s 21st Century Fox has bid £12bn to buy the 61 per cent of Sky it doesn’t already own. Bradley issued a European Intervention Notice earlier this year to assess the proposal on the grounds of concerns over media plurality and commitment to broadcasting standards.
She told Parliament today that an Ofcom review of the merger had been “unambiguous” in concluding that it “raises public interest concerns as a result of the risk of increased influence by members of the Murdoch Family Trust over the UK news agenda and the political process with its unique presence on radio, television, in print and online”.
As a result of the merger, the report found that Sky would have the third largest total reach of any news provider, lower only than the BBC and ITN.
Bradley said the broadcast regulator’s report provided “clear grounds” to refer the merger to a “phase two” investigation by the competition watchdog.
She said Fox had “somewhat unusually” offered remedies to mitigate media plurality concerns.
These included establishing a separate editorial board to oversee the appointment of the head of Sky News and any changes to its editorial guidelines. It also offered a commitment to maintain Sky branded News for five years with spending at least at similar levels to now.
Ofcom said these would go some way to “mitigate” media plurality public interest concerns, but Bradley said she was minded “not to accept the undertakings that have been offered”.
On the issue of broadcasting standards, Ofcom said it had no concerns, adding: “We do not consider that the merged entity would lack a genuine commitment to the attainment of broadcasting standards.”
As such, the Culture Secretary said she was not minded to refer this aspect of the takeover bid on for further scrutiny.
Bradley said Ofcom’s fit and proper assessment of Sky and Fox, following recent scandals at the US broadcaster, found: “Behaviours alleged at Fox News in the US amount to significant corporate failures, however these did not, in [Ofcom’s] view, demonstrate that the merged company would lack a genuine commitment to broadcasting standards.”
Fox has until Friday, 14 July to make representations on the Secretary of State’s “minded to” decisions. She will then make her final decision on whether to refer the merger bid to the Competition and Markets Authority (CMA) at a later date.
Shadow Culture Secretary Tom Watson said Murdoch-owned newspapers – The Sun, Times and Sunday Times – had made an “implicit bargain” with the Conservative government over recent years to mutual gain.
He also called on the Culture Secretary to “get on with” starting part two of the Leveson Inquiry into the culture and ethics of the media, which will look at relations between the press and police, telling Parliament: “She doesn’t have a mandate to drop Leveson Two”.
In a statement, Fox said: “We are pleased that [the Culture Secretary] is minded not to refer to the CMA in respect of the commitment to broadcasting standards.
“While we welcome [her] decision on broadcasting standards, we are disappointed that she does not accept Ofcom’s recommendation stated in its report that ‘…the proposed undertakings offered by Fox to maintain the editorial independence of Sky News mitigate the media plurality concerns.’
“Separately, 21st Century Fox is pleased that Ofcom recognizes that Sky, under full 21st Century Fox ownership, would remain a fit and proper holder of broadcast licenses.
“21st Century Fox will now make representations to the Secretary of State regarding her provisional decision and Ofcom’s report, and will continue to work constructively with the UK authorities.
“In the event that the Secretary of State makes a final decision to refer to the CMA, we would expect that the review would take at least 24 weeks. In such an event, the transaction is expected to close by June 30, 2018.
Seamus Dooley, NUJ acting general secretary said referral to the CMA regarding the Fox takeover of Sky “must go ahead”.
“We call on the Secretary of State to open up this process and to give the public the opportunity to respond to the Ofcom report,” he said. “The union remains fundamentally opposed to this bid.
“Our opposition is based on a concern to protect the public interest. Karen Bradley must act independently in this matter and must not allow the further diminution of media diversity in the UK.”
Ofcom’s full report is expected to be published today.