U.K. Government Issues Decisions on Sky Bids

The British government has cleared Comcast’s proposed acquisition of Sky while making the 21st Century Fox offer for the European pay-TV giant contingent on the sale of Sky News.

Matt Hancock, Secretary for Digital, Culture, Media & Sport, briefed Parliament on the decisions today. The decisions were made based on the need for “sufficient plurality of people with control of media enterprises,” high-quality broadcasting and “a genuine commitment to broadcasting standards,” Hancock said.

The proposed Comcast-Sky merger “does not raise public interest concerns and so I can confirm today that I will not be issuing an intervention notice,” Hancock noted.

An intervention notice had been issued for 21st Century Fox’s attempt to take full control of Sky last year “due to concerns about media plurality and the genuine commitment to broadcasting standards.” The subsequent investigation by the Competition and Markets Authority (CMA) flagged two areas of concern: the erosion of Sky News’s editorial independence, “which could in turn lead to a reduction in the diversity of viewpoints available to and consumed by the public,” and fears of “an increased influence of the Murdoch Family Trust over public opinion and the U.K.’s political agenda.”

Hancock said that the selling off of Sky News, with an agreement that it will be funded for at least ten years, “is likely to be the most proportionate and effective remedy for the public interest concerns that have been identified.” He continued, “I have asked my officials to begin immediate discussions with the parties to finalize the details with a view to agreeing [on] an acceptable form of the remedy, so we can all be confident Sky News can be divested in a way that works for the long term…. However, if we can’t agree [to] terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach.” Fox has said that Disney has expressed an interest in taking control of Sky News, whether or not Disney’s proposed acquisition of 21st Century Fox moves forward.

21st Century Fox said in a statement it welcomed the Secretary’s announcement, noting that it has already “submitted proposed undertakings to achieve the divestiture of Sky News to Disney. We now look forward to engaging with DCMS and we are confident that we will reach a final decision clearing our transaction.”

In April, Comcast Corporation made a formal offer to acquire Sky, valuing the platform at $31 billion. 21st Century Fox has been trying to take full control of the company since December 2016, when it reached a deal to shell out $14.2 billion for the remaining 61-percent stake.