British secretary of state still mulling Fox's $15-billion bid for Sky

Suspense is building in Britain over whether the Murdoch family will be able to pull off its long-held dream of owning a jewel of European broadcasting, the satellite television service Sky.

Britain’s secretary of state for culture, media and sport, Karen Bradley, on Thursday told members of Parliament that she needed more time to consider whether to approve the deal. She said she still leans toward requiring that 21st Century Fox’s proposed takeover of Sky undergo a more rigorous regulatory review.

At issue is whether the Murdoch family would have too much influence over the flow of news and information in Britain. The New York company, controlled by Rupert Murdoch, owns several newspapers in London and online news operations. Sky has a prominent television news unit, which also provides dispatches to hundreds of radio stations around Britain, making it the third-largest source for news in Britain, behind the BBC and ITV.

Fox had been hoping that Bradley, a member of the Conservative Party, would quickly approve the $15-billion deal, particularly after Britain’s media watchdog indicated that conditions could be placed on the deal to ensure editorial independence at Sky.

Nonetheless, opponents — including members of Britain’s Labor Party — have mobilized and expressed concern that the Murdoch family will turn Sky News into the European equivalent of Fox News. The activist group Avaaz has threatened to sue the government if it allows the Murdochs to consolidate Sky without looking more closely into ethical breaches at Fox, including the sexual harassment scandal that has engulfed Fox News for the past year.

The problems at Fox News, including a federal investigation in the U.S., have troubled Britain’s media watchdog, the Office of Communications, which completed the first phase of the regulatory review of the Sky deal last month.

“Unless new evidence … changes my mind in the coming weeks, the bid will therefore be referred to a Phase 2 review on at least one ground — media plurality,” Bradley wrote in Thursday’s letter to Parliament.

Fox is seeking to buy the 61% of Sky’s shares that it currently does not own. Rupert Murdoch helped launch Sky more than 25 years ago, and the family has long wanted to fully control the service that has more than 20 million customers in Britain, Ireland, Germany, Italy and Austria.

Fox unveiled the Sky deal in December. It was the second time in the last decade that the company has tried to acquire Sky, but its earlier bid was scuttled when Fox was grappling with the fallout from a phone hacking scandal at its London tabloids.

Fox on Thursday said it was “disappointed” that Bradley might refer the deal to the Competition and Markets Authority for additional review.

“We respect the importance of regulatory scrutiny, and we continue in our commitment to work constructively with authorities as we have done since this process began,” Fox said in a statement. “In light of the transaction’s benefits to the UK creative economy, we would urge the secretary of state to complete the regulatory process expeditiously.”

Bradley has not ruled out eventually approving Fox’s proposed takeover of Sky. She said she needed a few weeks to weigh the matter.


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