Rupert Murdoch’s attempt to buy the long-coveted remainder of pay-TV giant Sky has hit another bump in the road as the UK government has asked media regulator Ofcom to probe further into the mogul’s company after receiving “new evidence and comments.”
The Department for Digital, Culture, Media and Sport has written to Ofcom asking for extra input before culture secretary Karen Bradley decides whether the deal should be subjected to a full competition probe.
The “new evidence and comments” are said to call into question Fox’s adherence to broadcasting standards after Fox News was accused of collaborating with the White House to publish a story to detract from coverage of the Russia collusion issue.
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Last month, Bradley said she was “still minded” to refer 21st Century Fox’s bid to take full ownership of Sky to the Competition and Markets Authority (CMA) on media plurality concerns but not on the grounds of “commitment to broadcasting standards.” The latest evidence has now called the latter into question and DCMS is now “seeking further clarification” from the media regulator.
The government has asked Ofcom to respond by August 25, meaning a final decision on whether the acquisition should be subjected to a full competition probe is likely to come after Parliament’s summer recess in September.
In June, Bradley said she intended to refer Fox’s £11.6B ($14.6B) bid to acquire the 61% of Sky which it does not already own for deeper investigation and gave a July 14 deadline for companies and other parties to weight in. Since then, the minister had received more than 10,000 responses in the consultation.
The Murdochs have since expressed concern in the delay of the deal, with Fox chief exec James Murdoch and co-chairman Lachlan Murdoch saying that any delay would paint a bad picture of the UK in light of Brexit, signalling the country wasn’t as “open for business” as it claims to be.
CMA reviews can take up to six months to complete, meaning if the deal is subjected to a full competition probe, Murdoch’s long-awaited takeover would not happen until 2018. Fox will of course want a swifter decision on the deal as it’s on the hook to pay a £170M ($219M) dividend to shareholders if the deal doesn’t complete by the end of the year. If the deal never makes, Fox will have to pay Sky £200M ($258M).
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