Fox bid for Sky risks giving Murdoch too much power, Britain says

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Britain intends to subject Rupert Murdoch’s takeover of European pay-TV group Sky (SKYB.L) to a lengthy in-depth investigation after finding the $15 billion deal risks giving the media mogul too much power over the news agenda.

Media Secretary Karen Bradley said she was persuaded that Twenty-First Century Fox’s (FOXA.O) bid could give the Murdoch family excessive influence over the media, after regulator Ofcom assessed the impact of the deal.

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“The proposed entity would have the third largest total reach of any news provider – lower only than the BBC and ITN – and would, uniquely, span news coverage on television, radio, in newspapers and online,” Bradley said.

The Media Secretary said she would take a final decision on July 14, giving Fox two weeks to address her concerns. Shares in Sky rose on hopes a full investigation could still be averted by concessions over its 24-hour TV news channel, reports Reuters.

Murdoch, 86, and his family have long coveted full control of Sky, despite the damaging failure of a previous attempt in 2011 when their British newspaper business became embroiled in a phone-hacking scandal which forced them to abandon that bid.

A public inquiry into the affair revealed deep ties between Murdoch and the political establishment, making the renewed bid potentially toxic for Prime Minister Theresa May’s government which is fighting for survival after losing its majority.

Bradley had asked regulators to examine whether Fox would have too much control of the media, and whether it would be committed to upholding broadcasting standards if allowed to buy the company which broadcasts in Britain, Ireland, Germany, Austria and Italy.

Fox said it was disappointed by the government’s rejection of its plans to maintain editorial independence of Sky News, and said a full investigation could push the deal’s completion date back to next June. “We will continue to work constructively with the UK authorities,” it said.

During the previous takeover attempt Murdoch proposed spinning off Sky News into a separate company. However, Ofcom said on Thursday it was concerned that separating Sky News could be counter-productive, given the potential difficulties in funding the service outside of the Sky structure.

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