Sky News sale ordered before Fox takeover can go ahead, Comcast gets green light
Matt Hancock told Parliament he will now consult over the next 15 days.
Sky News must be sold if Rupert Murdoch’s 21st Century Fox is to secure Government approval for an £11.7 billion takeover of broadcaster Sky.
The culture secretary Matt Hancock said on Tuesday that in order to address media plurality concerns flagged by the Competition and Markets Authority, he favours “divesting Sky News to a suitable third party”.
The CMA raised the possibility of “increased influence of the Murdoch Family Trust over public opinion and the UK’s political agenda”, should Fox get its hands on Sky News.
Mr Hancock told Parliament he will now consult over the next 15 days to finalise details of the plans to divest Sky News before making a final decision.
But he said if terms of a sale of Sky News cannot be agreed, the “only effective remedy now would be to block the merger altogether”.
A separate £22 billion bid for Sky from US broadcasting giant Comcast was cleared by Mr Hancock, setting the stage for a bidding war with Fox.
Rupert Murdoch’s Fox is attempting to buy the 61% of Sky that it does not already own, but the bid has been complicated by competition concerns, media plurality fears and rival offers.
Sky shares were up marginally on the day.
“I agree with the CMA that divesting Sky News to Disney, as proposed by Fox, or to an alternative suitable buyer, with an agreement to ensure it is funded for at least ten years, is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified,” Mr Hancock added.
But he said he wants to ensure that the sale of Sky News would ensure it remains financially viable over the long-term; is able to operate as a major UK-based news provider; and is able to take its editorial decisions independently, free from any potential outside influence.
Disney has separately struck a deal to buy Fox’s entertainment assets, including its stake in Sky.
Fox said that it has already submitted proposals to divest Sky News to Disney.
Fox’s offer values Sky at around £18.5 billion.
Labour deputy leader Tom Watson, a vocal critic of the Murdochs, said: “With Comcast now in the ring, the future for Sky is uncertain, a bidding war is on the horizon.
“That might be good for shareholders but it’s the minister’s duty to protect the interest of the public.
“Sky is a gem of British broadcasting respected worldwide, its future and global reputation for excellence is at stake in this process so it is right that if there is any doubt about whether the proposed solution is workable then it is the duty of the Secretary of State to ensure that this (Fox) merger is blocked.”
This is Mr Murdoch’s second attempt to take full ownership of Sky, after the first was abandoned following the phone-hacking saga that led to the closure of the News of the World seven years ago.