Former BBC and ITV chairman Michael Grade has said he sees “no credible grounds” for 21st Century Fox’s £11.7bn Sky takeover bid being blocked.
In a letter to the Competition and Markets Authority, Grade outlined his assessment of the proposed purchase of Sky by Fox, who is bidding for the 31 per cent of the company it does not already own.
Grade, who has 45 years’ experience in the media industry, said in the letter: “On current evidence, I see no credible grounds remaining on which this transaction could be prohibited.”
Over his career, Grade has also served as chief executive of Channel 4. Since 2011 he has sat in the House of Lords as a Conservative life peer, where he claims to “keep an eye” on media plurality.
Grade said the digital technology’s “ever lower barriers to entry for news outlets… together with the vastly different news consumption habits of the general public” means the “concern to preserve media plurality, whilst still important, is today far less of an issue”.
He also said Fox’s pledge to fund Sky’s “unprofitable news channel” for up to 15 years was “extraordinary” and “safeguards future plurality to an extent that would otherwise be impossible”.
The UK’s competition watchdog is still investigating the takeover deal on media plurality grounds. It has provisionally said the deal is not in the public interest, but has yet to make a final ruling on it.
It said the takeover could hand the Murdoch Family Trust, which owns Fox and News Corp (ultimate owners of the Sun and Times newspapers) “too much control over news providers in the UK”.
While the CMA has been reviewing Fox’s takeover of Sky, Rupert Murdoch has sold a number of Fox assets to Disney, with the US company also set to take control of Sky should the CMA approve the Murdoch bid.
Disney has also separately expressed an interest in acquiring Sky News with a view to adding it to its existing portfolio of television channels.
Grade’s other reasons for supporting the buyout include the fact that Fox has proposed legally separate Sky news from the rest of Sky, giving the broadcaster a fully independent board that he said would be governed by “rigorous transparency obligations”.
He added: “It is inconceivable that either the legal separation of Sky News, or diversification of that business to Disney, could fail to fully remedy any outstanding concerns about this transaction.”
Picture: Reuters/Phil Noble