Rupert Murdoch free to take full control of Sky, if he sells Sky News
Rupert Murdoch must sell Sky News if his bid to take full control of Sky is to go ahead, culture secretary Matt Hancock has said.
Mr Hancock said he would clear the deal if the news channel is spun off to Disney or an alternative buyer in order to address media plurality concerns. If Sky News is not spun off the takeover will be blocked, the culture secretary said.
He told the House of Commons that the competition watchdog had found that the takeover could lead to an erosion of Sky News’ editorial independence and an increase in the control of the Murdoch family trust over UK media. The Murdoch family also owns The Times and The Sun.
The culture secretary said the sale of Sky News would be the most “proportionate and effective remedy” for those concerns.
He will discuss further details of the spin-off and sale with the parties over the next 15 days – including assurances that Sky News will be supported financially for at least 10 years – before reaching a final decision.
On the separate issue of broadcasting standards, Mr Hancock said the Competition and Markets Authority (CMA) had concluded the takeover was not contrary to the public interest.
He also said he would not intervene in a rival bid for Sky from US media giant Comcast.
Mr Murdoch is hoping to take control of the 61 per cent of Sky that he does not already own. His long-held ambition to take full control of the broadcaster has been repeatedly frustrated as regulators and politicians have voiced concerns over the potential damage a deal could do to UK media.
Mr Murdoch’s 21st Century Fox agreed an £11.5bn deal in December 2016 to take full control of Sky.
That came five years after Mr Murdoch was forced to give up on his previous attempt to buy Sky as his empire became embroiled in the phone-hacking scandal.
The proposed deal could not survive revelations that reporters had listened to the voicemails of hundreds of public figures, and that politicians had uncomfortably close relationships with Mr Murdoch and his senior executives.
Last month the competition watchdog delivered its final report to the culture secretary on Mr Murdoch’s latest bid after preliminary findings in January that the takeover would not be in the public interest.
Fox offered a number of concessions in an attempt to allay those concerns, including hiving off Sky News into a separate legal entity or selling the channel to Disney.
The latter offer is complicated by the fact that Disney is currently mounting its own $66bn bid to buy Fox’s entertainment assets, including Sky.
Mr Murdoch also faces a bidding war for Sky with Comcast – one of the world’s largest broadcasting companies – which announced a £22bn offer in April, prompting Sky to immediately withdraw its recommendation to shareholders to support Fox’s offer which values the target at £18.5bn.
Labour deputy leader Tom Watson, a vocal critic of the Murdochs, said on Tuesday: “With Comcast now in the ring the future for Sky is uncertain, a bidding war is on the horizon.
“That might be good for shareholders but it’s the minister’s duty to protect the interest of the public.
“Sky is a gem of British broadcasting respected worldwide, its future and global reputation for excellence is at stake in this process, so it is right that if there is any doubt about whether the proposed solution is workable then it is the duty of the secretary of state to ensure that this [Fox] merger is blocked.”
