A puppet head of Rupert Murdoch sits next to an anti-takeover placard outside Parliament

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A puppet head of Rupert Murdoch sits next to an anti-takeover placard outside Parliament

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A puppet head of Rupert Murdoch sits next to an anti-takeover placard outside Parliament

Media mogul’s £11.7bn deal in jeopardy as bid is referred to competition regulator

One-Minute Read

Wednesday, September 13, 2017 – 5:47am

Rupert Murdoch’s bid to take full control of Sky is in jeopardy after Culture Secretary Karen Bradley confirmed her decision to refer the deal to the competition watchdog.

Earlier this year, Bradley told MPs she was minded to refer 21st Century Fox’s £11.7bn purchase of the broadcaster to the Competition and Markets Authority (CMA) for a six-month investigation, on grounds of media plurality.

 Murdoch already owns The Times, The Sunday Times, The Sun, The Wall Street Journal and TalkSport, as well as a 39% stake in Sky. A 2011 takeover bid by the now defunct Murdoch-controlled News International to seize control of Sky was withdrawn in the wake of the phone-hacking scandal.

Bradley’s decision is not unexpected – but what has come as a surprise is her request to the CMA to consider Murdoch’s commitment to broadcasting standards, conducting what is known as a “fit and proper person test” .

This contradicts recommendations made by media regulator Ofcom, which said there was not substantial evidence to support a broadcasting standards investigation, and means the bid now faces a two-pronged inquiry that could delay or even sink it.

Bradley’s claim that there were “non-fanciful concerns” about compliance procedures at Fox News and corporate governance at Murdoch companies represents a major U-turn by the Culture Secretary since her last official statement, in June.

Fox co-chairman Lachlan Murdoch previously told the Government that any delay will signal to other companies that the UK isn’t “open for business” as it leaves the European Union.

However, “pressure has since increased” from those opposed to the deal, says The Guardian. The campaign group Avaaz and a selection of high-profile MPs led by Ed Miliband threatened to launch a judicial review if Bradley did not refer the deal to the CMA.

Writing in the London Evening Standard earlier this week, the former Labour leader said that there was growing evidence suggesting the Murdochs should not be allowed to take full control of Sky, and that there was an “overwhelming” case for the Government to launch a full investigation into how the “Foxification” of Sky News would affect Britain’s media landscape.

The Financial Times reports that it was these concerns about broadcasting standards at Fox News “which prompted the Culture Secretary to widen the scope of the investigation”.

Fox chief executive James Murdoch and fellow managers “now face the prospect of months of interrogation over recent events at scandal-hit Fox News”, says Bloomberg.

Fox News – which was taken off the air in the UK just last week, owing to low viewer numbers – has been beset by a series of racial and sexual harassment scandals in the US that have resulted in the departure of a string of top executives, including its late chairman Roger Ailes and Fox News anchor Bill O’Reilly. It is also the subject of an ongoing lawsuit alleging it colluded with the Trump administration to “disseminate fake news” about the murder of the Democratic aide Seth Rich.

Bradley has given all parties ten days to responds to her announcement before making her final decision.

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