Sky's takeover by Fox absolutely should be investigated by watchdogs

The broadcaster says its propsed takeover of Sky will be good for the UK, but that remains to be seen

James Moore
Chief Business Commentator
Thursday 09 March 2017 13:49 GMT
James Murdoch, chairman of Sky
James Murdoch, chairman of Sky

When a business says “we welcome decision X” by the Government, what it actually means is “we’re absolutely positively furious about it”.

Take Fox, with its welcoming of a “thorough and thoughtful regulatory review” of its attempt to take full control of Sky, in which the US outfit is the leading shareholder.

Karen Bradley, the Culture Secretary in a Government that has made great play of its willingness to intervene in business to protect British interests, has said that she is “minded” to bring OfCom and the Competition & Markets Authority in to have a look at the deal.

Amid lots of honeyed words about how it “has recognised from the outset that the Secretary of State may wish to seek advice from the CMA and Ofcom” you can almost feel the Murdoch clan’s fury dripping through the letter sent by Jeffrey Palker, the deputy general counsel and deputy chief compliance officer Twenty First Century Fox, to the Department for Culture, Media & Sport on that subject.

That shouldn't surprise anyone. Rupert Murdoch took a punt with Sky at the outset, and a lot of people thought he was barking mad to do so, notwithstanding the powerful tool he had to sell Satellite TV to the masses in the form of the Sun newspaper, which he duly utilised.

The Murdoch family have been trying for some time to bring Sky, which is very close to their hearts, fully back into the fold, and, having been knocked back once, might have felt the way would have been clear this time, with memories of the News of the World phone hacking scandal growing dimmer and the split that has taken place between their broadcasting and publishing businesses.

Then along comes this pesky minister who seems set upon actually, you know, doing her job and taking her boss at her word. The cheek of it! Do they not know who we are?

Fox attempts to knock back the argument that the Murdochs, or more correctly the Murdoch Family Trust, will have under their control several of the leading news providers in the UK after the deal. It notes the separation between broadcast and print businesses, while pointing out that both companies have their own boards and independent shareholders.

It therefore disputes the notion that the Trust could be considered to control multiple news outlets.

However, on a practical level, everyone knows who’s boss. What the Murdochs want, they get, which is how James Murdoch came to be chairman of Sky in the first place.

There’s also some chest beating in the letter about Sky and its compliance with broadcasting regulations and also the measures put in place at the newspaper arm since the aforementioned phone hacking scandal.

As for the issue of competition, the landscape has changed since we were last here. Social media was nowhere near as important. Netflix, and Amazon Prime didn’t exist.

That doesn’t change the fact that the Murdochs already have an extraordinary amount of power and influence over our national life, and that this deal will only increase that.

Whatever might have changed at his newspaper businesses, phone hacking still happened. Meanwhile, if you take a look at the coverage of Fox News in recent months, well, let’s just say it isn’t just the newspaper operations that have had problems. And we shouldn't forget that James Murdoch has, himself, been the subject of criticism by OfCom.

For all these reasons, and more, a thorough and thoughtful assessment of this bid would be very welcome, and not just by Fox.

Ms Bradley absolutely should involve the regulators, and the proposed transaction absolutely should be considered very, very carefully.

The competitive landscape might have changed, but Sky remains an immensely powerful and influential broadcaster and business. Fox claims that it proposed takeover of Sky will be “good for the UK”. That rather remains to be seen and needs to be investigated. Thoughtfully. And thoroughly.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in