RUPERT Murdoch’s £11.7 billion takeover bid for Sky has been provisionally blocked by the competition watchdog due to fears it would hand the media mogul too much control over UK media.

The Competition and Markets Authority (CMA) said it found that 21st Century Fox’s deal to buy out the remaining 61 per cent of Sky it does not already own was “not in the public interest”.

Its investigation found if the deal went ahead, it would hand the Murdoch Family Trust – which controls Fox and News Corp, the publisher of the Sun and the Times – “too much control over news providers in the UK across all media platforms... and therefore too much influence over public opinion and the political agenda”.

It cleared the deal on the grounds of Fox’s commitment to broadcasting standards, in spite of the phone-hacking scandal at the Murdoch-controlled News of the World tabloid and allegations of sexual harassment at Fox News in the US.

The provisional decision could thwart Mr Murdoch’s plans to take full ownership of Sky for the second time, after the first attempt was abandoned following the phone-hacking saga that led to the closure of the News of the World seven years ago.

It also adds a complication to Walt Disney’s recently agreed $66 billion (£4bn) takeover of 21st Century Fox’s entertainment assets, including Sky.

The CMA has put forward suggestions for how it believes Fox could address its concerns – including spinning off Sky News, or “behavioural” changes to protect Sky News from direct influence from the Murdoch Family Trust. New Culture Secretary Matt Hancock will then decide whether to block the deal, approve it or approve it with conditions.

Sky News held an emergency staff meeting and question and answer for employees following the CMA decision.

Sky signalled in a submission to the CMA last year Sky News faced the risk of closure or being spun-off if media plurality concerns prevented the Fox deal.

Fox said it was “disappointed” at the provisional ruling. The company said it will continue to engage with the CMA before publication of its final report, which has now been put back to May 1. It added it still expects regulatory approval of the deal by June 30.

Sky said it “noted” the CMA’s initial findings. Shares in the FTSE 100-listed firm rose nearly three per cent after the provisional ruling in a sign investors are betting on the deal going through.

The CMA will consult on its provisional findings and remedies before giving its final report to the Government. Anne Lambert, chairwoman of the CMA’s independent investigation group, said: “Media plurality goes to the heart of our democratic process. It is important that no group or individual should have too much control of our news media or too much power to affect the political agenda.”

In explaining its provisional decision, the CMA said Murdoch’s news outlets are “watched, read or heard by nearly a third of the UK’s population, and have a combined share of the public’s news consumption that is significantly greater than all other news providers, except the BBC and ITN.”

The CMA said it took into consideration the impending Walt Disney deal and that this would “significantly weaken” the link between Sky News and the Murdoch Family Trust. But it added: “We cannot be sufficiently confident at this stage whether, when, or how the Disney/Fox transaction will complete.”

It is looking at the possibility of a “sunset” clause, which would mean actions taken to address concerns fall away if Disney’s takeover goes through. The CMA could also ensure any actions taken to pass the deal are reviewed later if the Disney takeover goes ahead.

The watchdog said it noted fears Sky News could close if the Fox deal is blocked. But it added: “We do not see why ... Sky would wish to close Sky News in the event of a decision by the Secretary of State to prohibit the transaction as the continued operation of Sky News would be unlikely to represent an obstacle to the Disney/Fox transaction.”

Labour’s deputy leader and shadow culture secretary Tom Watson said: “The CMA is right to say the Fox takeover of Sky would give the Murdoch family too much power. This is the right decision for the UK.”


ANALYSIS: Why this media magnate could end up having the last laugh after all

By Professor John Cook

IN MY classes I show a clip of David Mellor, formerly of the Thatcher government, explaining that the growth of Sky was a legacy of the UK government’s need for support from the Murdoch press. Mellor is quoted as saying no one in their right mind would give Murdoch any more power. The clip is from 1994.

The CMA is now suddenly saying no individual should have too much control over news providers in the UK. Where were they 30 years ago when these concerns were first raised? A cynic might read this latest development as the UK Government and the CMA trying to be on the right side of history; that it’s safe now to go against Murdoch, where it wasn’t before.

The political classes didn’t really criticise Murdoch until the tipping point of the 2011 phonehacking scandal. Even then Murdoch survived as his main business interests were in the US. There are bigger guys in town now.

Rupert Murdoch wants to sell 21st Century Fox to Disney as he knows it can’t compete to scale with the rise of Netflix, Amazon and Facebook. He could end up, however, having the last laugh at the end of his career by simply giving the CMA reassurances over Disney or divesting the Murdoch brand of any direct influence over Sky News.

Has Murdoch always been demonised in the UK because he is seen as a newsman?

Disney is seen as the Mouse House; it’s innocuous, it’s entertainment, but nevertheless, it would still be a huge corporation coming in and owning a large chunk of the British media, consumed on average by over a third of the UK audience. Is this a case of the CMA trying to close the henhouse door after the Murdoch fox has bolted?

Professor John Cook, Professor in Media, Glasgow Caledonian University, is a respected academic in the study of the media.