European Regulators Have Problem With Fox-Sky Deal

European media regulators have tentatively concluded that 21st Century Fox's purchase of Sky is not in the public interest, saying it would give the company too much control over UK news across all platforms--TV, radio and online--but it found there were no broadcast standards issues with the deal.

That was the provisional conclusion of UK communications regulator Ofcom's Competition & Markets Authority (CMA), which has been looking at that issue as part of its six-month review of the proposed deal. It said the Murdoch Family Trust (MFT), which controls Fox and parent News Corp., would have too much influence "over public opinion and the political agenda."  A final report on the deal is due out in May, so Fox has more time to make its case of adjust the deal.

Related: UK Authority Rules Against Hannity, Carlson

21st Century Fox has defended the deal to CMA last November, saying it would not result in a loss of diversity of viewpoints, in part because after the deal there will remain several more trusted viewpoints than either Sky News or some of News Corp.'s outlets. Loss of viewpoint diversity is one of the key issues Ofcom's Competition & Markets Authority (CMA) is looking at in its six-month review of the proposed deal.

In December 2016, 21st Century Fox agreed to pay $14.8 billion for the balance of the pay TV service it did not already own. Sky has 22 million subs in five countries -- Italy, Germany, Austria, the U.K. and Ireland.

21st Century Fox was putting the best face on it, pointing to the fact that CMA had concluded there were no broadcast standards issues, the other key issue it was vetting. As to whether Fox and Sky have a "genuine commitment to broadcasting standards in the UK," CMA provisionally concluded that "Fox taking full control of Sky is not likely to operate against the public interest."

"The CMA also provisionally found that Sky has a good record in this regard, consistently complying with broadcasting regulation," CMA said. "It also has comprehensive and effective policies and procedures in place to ensure broadcasting standards are met."

Fox's statement on the CMA tentative conclusion led with the broadcast standards finding. "Today’s provisional findings move our proposed Sky transaction forward to the next phase of the regulatory review process," it said. "We welcome 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."

Related: CMA Outlines Review of 21st Century Fox Deal

"Regarding plurality, we are disappointed by the CMA’s provisional findings," said Fox. "We will continue to engage with the CMA ahead of the publication of the final report in May." Fox also said it still thought the deal would get done, and by June.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.