Government ‘minded’ to intervene in Sky takeover bid

Media mogul Rupert Murdoch
Media mogul Rupert Murdoch
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Culture Secretary Karen Bradley has announced she is “minded” to order an investigation into the planned £11.7 billion takeover of broadcaster Sky by Rupert Murdoch’s 21st Century Fox over concerns about media plurality and broadcasting standards.

The decision has been welcomed by opposition MPs – including the former Labour leader Ed Miliband – who have previously raised doubts about the Government’s “willingness” to stand up to the influence of the Murdoch media empire.

In a statement issued as the broadcasters formally notified the European Commission of the planned merger, Ms Bradley stressed that she has not yet taken a final decision on whether to intervene. But she has written to both companies asking for them to make written representations by March 8, with the aim of announcing a final decision on intervention in the week commencing March 13.

The deal, which shareholders will still have to vote on, comes five years after the media tycoon’s last attempt at taking full control of Sky through News Corporation. That bid was derailed after the company – which owns The Sun and The Times – became embroiled in the phone-hacking scandal involving News International.

Following reports of a new attempt, a number of MPs, including Mr Miliband, called on the Government to refer the bid to the competition authorities. Tabling an urgent question in the Commons at the end of last year, the Doncaster North MP warned against “waving through” a bid that granted the Murdochs “to wield unfettered power”.

In her statement, Ms Bradley said that Department for Culture, Media and Sport analysis had highlighted concerns over the deal’s impact on “the need for there to be a sufficient plurality of persons with control of the media enterprises... in the UK”. The DCLG also emphasised “the need for persons carrying on media enterprises, and for those with control of such enterprises, to have a genuine commitment to attaining broadcasting standards objectives”.

“I have today written to the parties to inform them that I am ‘minded to’ issue a European Intervention Notice on the basis that I have concerns that there may be public interest considerations... that are relevant to this proposed merger that warrant further investigation,” her statement said. “I am inviting written representations from the parties and will aim to come to a final decision on whether to intervene within 10 working days.”

A decision to intervene would not block the deal, but would trigger an Ofcom assessment of public interest considerations as well as a Competition and Markets Authority report.

Responding to the announcement, the Labour Shadow Culture Secretary Tom Watson stated it was “clearly in the public interest” that the bid be referred.

“It is clear that Fox’s bid to take full control of Sky will significantly increase the size of the biggest media organisation in the UK and further concentrate power in the hands of a dominant industry player,” he said.

Mr Miliband said it was a “test” of the Government’s willingness “to stand up to the power of the Murdochs”.

“The Murdochs already have enormous influence and if it went through this bid would make the situation far worse,” he said.

“It is right that Karen Bradley should refer the Murdoch Sky bid to Ofcom. There is no conceivable way that she can reasonably do otherwise.”

In a statement, 21st Century Fox said: “We note the statement issued by the Secretary of State following formal notification of the proposed transaction.

“As we have previously indicated, we anticipate regulators will undertake a thorough review of the transaction, and we look forward to engaging with them as appropriate.

“We believe the combination of 21st Century Fox and Sky will create a company best suited to compete in a rapidly evolving industry, and are confident that the transaction will be approved based on a compelling fact set.”