Fox expects Sky takeover to be approved in first half of 2018
Media giant 21st Century Fox expects its takeover of Sky, the European pay-television operator, to be approved next year, despite the UK government requesting that the country’s communications regulator conducts further analysis on the potential effects of the deal.
In a statement, James Murdoch, chief executive of 21st Century Fox said he remained “confident” that the “transaction will be approved,” but admitted that it would likely have to wait until the “first half of 2018” rather than “the end of this calendar year.”
Yesterday, the UK’s Department for Digital, Culture, Media and Sport said that it had written to Ofcom, the communications watchdog, “seeking further clarification” and “advice” on the proposal.
Fox, which is headed up by Rupert Murdoch (pictured), has already agreed a deal worth £11.7 billion ($15.2 billion) to acquire the 61 per cent of Sky it does not already own, and has received the approval of the European Commission’s competition authorities and Ireland’s communications regulator.
James Murdoch issued the statement following the release of 21st Century Fox’s fourth-quarter financial results yesterday.
Revenue totalled $6.75 billion, up from $6.6 billion in the same period a year ago.
However, earnings fell from 45 cents per share to 36 cents per share.
Cable network programming revenue climbed to $4.33 billion from $3.92 billion, but standard television revenue was down marginally, from $1.04 billion to $1 billion.
Last month, Karen Bradley, the UK’s culture secretary, revealed that she would refer the proposed takeover of Sky to a further six-month inquiry by the country’s Competition and Markets authority unless “new evidence” could change her mind.
In June, Bradley said that she was “minded to” refer the deal to a “phase 2” investigation on the grounds of media plurality.
Sky has 22.4 million subscribers across the UK, Ireland, Germany, Austria and Italy, and is one of the leading broadcasters of sport in Europe.
A June report by Ofcom, concluded that the merger might increase the Murdoch family’s “ability to influence the overall news agenda and their ability to influence the political process and it may also result in the perception of increased influence.”
In addition to the Sky stake, Rupert Murdoch’s UK assets include national newspapers The Times and The Sun, and their Sunday editions, plus national commercial radio station TalkSport.
Ofcom did state that Fox and Sky had met the necessary standards regarding broadcasting standards.
In 2010, News Corp, Murdoch’s global media company, sought to take control of BSkyB, the former name for Sky's UK operation, in a move that at the time would have valued the broadcaster at about £12 billion, but the board then asked it to increase its offer.
News Corp was prepared to spin off Sky News into a separate company as a concession, only for the negotiations to be put on hold in 2011 following the parent company's involvement in a phone-hacking scandal, which led to the sudden closure of the News of the World, then the UK’s biggest-selling Sunday newspaper.