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Fox Needs to Clear Up Clouds in Sky Deal

WASHINGTON — 21st Century Fox has regulatory troubles with its proposed purchase of European program distributor Sky, but was still sounding confident a deal would get done.

European media regulators were not sounding a similar note in tentatively concluding the merger is not in the public interest, saying it would give the company too much control over U.K. news across all platforms — TV, radio and online. But it did offer possible fixes.

“While there are a range of other news outlets serving U.K. audiences, the [Competition and Markets Authority] has provisionally found that they would not be sufficient to moderate or mitigate the increased influence of the [Murdoch Family Trust] if the deal went ahead,” the regulator said.

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 subscribers in five countries — Italy, Germany, Austria, the U.K. and Ireland.

That was the provisional conclusion of U.K. communications regulator Ofcom’s Competition and Markets Authority, which has been looking at that issue as part of its six-month review of the proposed deal. It said the MFT, which controls both 21st Century Fox and News Corp., would have too much influence “over public opinion and the political agenda.”

Although the deal got a clean bill of health from the European Commission in April, the CMA is conducting a full review of the deal after the U.K. Secretary of State for Digital, Culture, Media and Sport, Karen Bradley, said the deal might not be in the public interest.

But the CMA conclusion is only tentative. Fox has until May to either make its case or adjust the deal.

The CMA did add that there were no broadcast issues with content, which Fox was playing up in its response to the tentative ruling.