Sky News funding will increase under Disney ownership, British culture secretary says
Rupert Murdoch’s 21st Century Fox Inc. just got a step closer to buying European satellite television giant Sky, thanks to new commitments from Fox and Walt Disney Co. to alleviate regulatory concerns.
Fox and Disney have offered to increase funding for the prestigious 24-hour channel Sky News. Under the proposal, Disney would operate the news service for at least 15 years after the deal is completed, British Culture Secretary Matt Hancock said in a statement Tuesday.
Disney in April offered to buy Sky News to help clear the way for Fox’s long-running attempt to take over the pay-TV giant. Britain’s culture secretary said earlier this month that he would approve the deal as long as Fox divests Sky News, which is a small part of Sky’s overall business.
Fox currently owns 39% of Sky. In 2016, it offered to buy the remaining 61% for $16.5 billion. But concerns that the deal would give the Murdoch family too much power over British news media has dragged out the process. The Murdochs also control the publishing company News Corp., which owns the Times of London, the Sunday Times and the Sun tabloids.
Meanwhile, Fox also must fend off a higher competing bid from Comcast Corp., which in April formalized a $30.7-billion offer for Sky. The Philadelphia cable operator is also battling Disney to buy most of Fox, including its Century City movie and television studio, FX cable channels, regional sports channels and Fox’s stake in Sky.
Comcast recently made a $65-billion all-cash offer for the Fox assets, setting off an expected bidding war. Disney in December offered $52.4 billion to buy the Fox assets.
Disney did not immediately respond to a request for comment.
Under the new terms, funding for Sky News would increase to at least $130 million, Hancock said. Sky has not released a previous annual budget for the channel, but press reports say it was estimated at $120 million. Disney would not be able to sell Sky News for 15 years without the secretary’s permission.
As part of the deal, Fox has guaranteed funding for Sky News for 15 years, up from the 10 years to which the company previously committed. The deal is now subject to a 15-day public comment period.
“We now look forward to a final decision clearing our transaction,” Fox said in a statement.
Twitter: @rfaughnder
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