Ofcom has expressed concerns about the full takeover of Sky by 21st Century Fox. If approved, 21st Century Fox, which already has a 39.1 percent, will buy the rest of Sky for GBP 11.7 billion, valuing the company at GBP 18.5 billion. Reports by Ofcom clear the Murdochs and Fox as being “fit and proper” to hold a UK broadcasting licence despite the regulator expressing concern about “extremely serious and disturbing” allegations of harassment at Fox News. Ofcom had to assess the merger based on two public interest grounds, namely “the need for there to be a plurality of persons controlling media enterprises” and “for those carrying on or in control of such enterprises to have a genuine commitment to the attainment of broadcasting standards objectives.”
The report into the “public interest test” for the deal examines the size and influence of 21st Century Fox, News Corp and Sky, and the track record of the Murdochs. It also hints at the concessions that the Murdochs could offer to push the deal through, the Guardian reported.
The regulator also concluded that Rupert Murdoch and his son James would have too much influence over the British media. “The proposed transaction would give the Murdoch family trust material influence over news providers with a significant presence on television, radio, printed newspapers and online,” said Ofcom in its report on the proposed Sky takeover. Ofcom said that the Murdoch family maintains “material influence” over its media conglomerate.
The regulator said that the deal would see Murdoch-owned media account for a 10 percent share of all the news that the public consume, behind the BBC with 42 percent, and in line with ITN with 11 percent. It added that that the data “may understate the importance of Fox/Sky and News Corp.”
Concerns, too, were raised about the impact of Murdoch titles on the political process. Ofcom said that buying Sky may increase the ability of the Murdochs to “coordinate editorial policy of news outlets under their influence” and “may increase the influence that members of the Murdoch family trust have over the political process”.
In addition, Ofcom also raised “significant concerns” that a full spin-off of Sky News, which was accepted as a media plurality remedy at the time of the last bid, would not solve the issue of Murdoch media power this time. The media regulator is concerned that the loss-making Sky News is likely to become a smaller operation if run as a separate business and could therefore make the situation worse. “A degradation or loss of Sky News could potentially present risks to plurality equal to or greater than those presented by the transaction itself,” said Ofcom.
