Fox approaches its first hurdle in its bid to take over Sky

The announcement in December of last year that Rupert Murdoch’s 21^st Century Fox was positioned for a full takeover of Sky was hardly one of the most popular deal announcements of 2016, and most certainly the least surprising. The £11.7bn bid has proved to be a contentious one, and Murdoch and co. have now reached one of their first major hurdles in the deal process in the form of competition authorities.

Fox must now formally notify the European competition regulator of the bid, after which the UK government and culture secretary Karen Bradley must decide whether to issue a public interest intervention notice (PIIN) and refer the deal to media regulator Ofcom. If a PIIN is issued, this surely won’t come as a surprise to team Murdoch considering its history and failed 2011 bid under News Corporation to take over Sky. The deal was squashed when Ofcom raised its concerns and Murdoch faced public outcry after his newspaper The News of the World became embroiled in phone hacking scandals.

While supporters of the bid argue that the competitive digital media landscape has reduced the Murdoch empire’s influence over UK media (their empire is no match for the reach of social media heavyweights, they argue), the deal has had a less than favourable response from the majority of the industry and several politicians. Politician Ed Miliband, for example, has demanded that UK regulators investigate whether Fox CEO James Murdoch meets a test to hold a UK broadcasting license.

Considering that the Murdochs have already tried and failed once before to acquire Sky, the fact that they are trying yet again to purchase the 61 per cent stake that it doesn’t already own in the broadcasting company suggests that team Murdoch is not likely to back down easily. While the bid this time around comes from Fox rather than the defunct and defamed News Corporation, the deal is so intrinsically linked to the Murdoch family that it was never going to be plain sailing.

Given the Murdoch’s history with Sky, and the fact that the Murdoch-owned company News Corp already controls a large chunk of the UK media including the Times, the Sunday Times, the Sun and TalkSport, it is widely expected by industry experts that culture secretary Karen Bradley will refer the deal to Ofcom. It’s safe to say that this transaction will be a politically charged process, and the industry waits with interest to see whether competition regulators will try and put a stop to the deal.

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