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U.K. regulator: Fox-Sky deal is against public interest

A U.K. regulator is recommending that the government block Rupert Murdoch's planned $16 billion takeover of Sky TV in...

Posted: Jan 23, 2018 8:02 AM
Updated: Jan 23, 2018 8:02 AM

A U.K. regulator is recommending that the government block Rupert Murdoch's planned $16 billion takeover of Sky TV in its current form.

The Competition and Markets Authority (CMA) said in a statement Tuesday that the proposed deal by Murdoch's 21st Century Fox is likely to be "against the public interest" because it would give the mogul too much control over British media.

"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," said Anne Lambert, chair of the regulator's investigations group.

The authority proposed steps it said 21st Century Fox could take to address the concerns, including spinning off Sky News.

The British government asked the regulator in September to examine the takeover because of concerns that the deal would concentrate too much power in the hands of the Murdoch family.

Murdoch already owns three of Britain's biggest newspapers: The Sun, The Times and The Sunday Times.

The takeover, which has been subjected to a series of review by regulators in Britain, was further complicated in December when Disney announced plans to buy most of 21st Century Fox in a deal that promises to reshape the global media business.

Related: Disney is buying itself a messy TV deal in Europe

Disney said at the time that Fox remained "fully committed to completing the current Sky offer." When the Disney deal closes, it would then assume full control of Sky.

21st Century Fox said in a statement Tuesday that it was "disappointed" by the CMA's provisional findings and would continue to engage with the regulator.

Sky said it had noted the regulator's statement, and its proposed remedies. The regulator will present its final judgment to U.K. Culture Secretary Matt Hancock by May 1.

There was some good news for the companies, however. The regulator, which had been asked to examine Fox's "genuine commitment to broadcasting standards," said that it was not concerned about the issue.

Sky shares jumped by more than 3% in London.

The review has become a hot political issue in Britain, where some politicians have pushed for closer examination of the Murdoch family following a series of scandals at the U.S. cable news channel Fox News.

Related: 'The Simpsons' predicted Disney would buy Fox

It's not clear how Disney, Fox and Sky will react to the regulatory guidance announced on Tuesday.

The CMA noted in its decision that concerns about media plurality would be weakened if Disney -- and not 21st Century Fox -- were trying to buy Sky.

But the agency said it could not take the Fox-Disney deal into account because it is "unlikely to be completed" before its regulatory review is completed.

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