Rupert Murdoch’s £11.7 billion quest to take full control of Sky just suffered a setback

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Rupert Murdoch’s 21st Century Fox wants to take complete control of Sky.
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REUTERS/Jason Reed

Rupert Murdoch’s attempt to take control of the entirety of the Sky broadcasting network suffered a setback on Wednesday, as the government said it intends to refer the £11.7 billion ($15.2 billion) deal to regulators.

The media billionaire’s US company 21st Century Fox already owns 39% of the British broadcaster and wants to spend more cash to buy the remaining 61%.

But Karen Bradley, the UK’s culture secretary, said she intends to refer the bid to the Competition and Markets Authority (CMA), on the grounds that the deal could give Murdoch too much control over the UK media industry.

In a statement to the House of Commons, she said the deal would give the Murdoch family the third-largest media empire in the UK. Only the BBC and ITN, which produces ITV and Channel 4 News, would be bigger.

Bradley said the deal could “increase members of the Murdoch Family Trust’s ability to influence the overall news agenda and their ability to influence the political process and it may also result in the perception of increased influence.”

She continued: “These are clear grounds whereby a referral to a Phase 2 [CMA] investigation is warranted – so that is what I am minded to do.”

Fox and Sky have both suggested ways they could allay concerns about media plurality, by making pledges to guarantee the independence of Sky News. But Bradley said she did not think the assurances would be enough to solve the problem.

She added that she did not have a problem with the editorial standards of either Sky or Fox, which is another potential grounds on which the deal can be blocked.

Ultimately, Bradley will make the final decision on the deal herself, but that will be delayed until after a new public consultation.

Regulators in Ireland, Austria, Germany and Italy, where Sky also operates, have already approved the bid. The UK decision is the final piece of the puzzle.

In response to the ruling, Fox said it was “disappointed” that its offer had not been accepted, and said it would keep working with UK authorities to get it through.

Labour slams government’s “implicit bargain” with Murdoch

Tom Watson

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Neil Hall / Reuters

Bradley was immediately criticised by the Labour Party for not rejecting the deal outright.

Tom Watson, Labour’s deputy leader and a long-time campaigner against Rupert Murdoch, accused the Conservative party of striking an “implicit bargain” with Murdoch, whereby he would be allowed to purchase Sky in exchange for his support in the press.

He said the decision process is following “the old playbook,” and that Bradley would eventually approve the deal in exchange for minor concessions. Bradley dismissed the accusations and insisted she has acted impartially.

Watson added that, should Labour be elected, they would take action against media owners and make clear that “the days when citizens of other countries can dominate our media markets while paying their taxes overseas have got to end.”

At the same time as Bradley made her statement, Ofcom published its findings around the deal. It said 51,513 people or organisations wrote to them about the deal. Just 26 were in favour.