Murdoch’s Sky Takeover ‘Not in Public Interest’, Says CMA

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The Competitions and Markets Authority (CMA) has ruled that Fox’s move to take control of Sky will result in the Murdoch Family Trust (MFT) having too much media control, thereby undermining media plurality.

The CMA noted that the various news outlets currently controlled by the Murdochs, including the Sun and Times newspapers, reach almost a third of the UK’s population, constituting the largest stake in the media market besides the BBC and ITV.

Taking this into account, the CMA came to an initial verdict that allowing the deal to go ahead would not be in the public interest on the grounds that it would give the MFT too much media influence, and therefore too much political influence.

Anne Lambert, who chairs the CMA’s independent investigation group, said: “Media plurality goes to the heart of our democratic process. It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.”

However, the CMA raised no concerns over broadcasting standards being affected by the deal. They praised Fox’s “genuine commitment to broadcasting standards in the UK”, in addition to acknowledging the “comprehensive and effective policies and procedures” that Sky implements to in order to deliver quality broadcasts.

The CMA’s ruling is not straightforward as a result of Disney’s move to acquire a majority stake of 21st Century Fox. If the deal goes ahead, it could render the findings by the CMA irrelevant, although the deal still needs to meet approval from US regulators first.

Disney and Fox have set a target of mid-2019 to have completed the takeover, assuming the regulatory process proceeds smoothly. By this time Fox would have completed their takeover of Sky, meaning that ultimate control of Sky would end up with Disney. As a result of this, many of the problems outlined in the CMA’s report would end up being addressed. However, the CMA said that this did not affect their initial ruling over Fox’s takeover of Sky, although admitted that it had ramifications for their proposals to address concerns over media plurality.

Possible solutions

Currently the CMA has outlined three remedial proposals to address concerns over media plurality raised by the deal:

  1. Stopping the deal going through
  2. Spinning off or selling off Sky News
  3. Insulating Sky News from the MFT’s influence

The next step in the process is a three-week public consultation during which time the CMA is open to responses to its initial ruling. The CMA will then compile these responses and use them to inform revisions to its initial ruling, before compiling them into a final report to be sent to the Culture Secretary, Matt Hancock, before the 1st of May. Mr Hancock then has 30 working days to make the final decision over whether or not to approve the deal.

Sir Martin Gilbert, the Senior Independent Director of Sky outlined his confidence that the CMA’s preliminary ruling would not derail the deal, offering assurances in his belief “that Sky can offer concessions that will see this deal go through.”

Fox issued a statement saying it was “disappointed” by the findings, but insisted that they would “continue to engage with the CMA ahead of the publication of its final report in May.” They added that they welcomed “the CMA’s provisional finding that the company has a genuine commitment to broadcasting standards and the transaction would not be against the public interest in this respect.”

Sky added that they also acknowledged the verdicts of the CMA on the grounds of media plurality and broadcasting standards, and that they “had set out possible remedies” to the problems the regulator raised over plurality “and is seeking submissions on these” in order to facilitate the deal going ahead.

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