James Murdoch played to concerns about the post-Brexit UK economy in advocating for the approval of 21st Century Fox Inc’s bid for pay-TV company Sky Plc, as the government committed the deal to months of additional scrutiny.
The Fox chief executive officer and son of billionaire Rupert Murdoch, speaking to an audience of broadcast industry top brass yesterday, responded to a decision hours earlier by the government to refer the £11.7bn ($15.5bn) purchase to a wider probe by the country’s competition authority.
“If the UK is truly open for business post-Brexit, we look forward to moving through the regulatory review process,” Murdoch said onstage at a Royal Television Society conference in Cambridge, England, “and this transformative transaction for the UK creative sector becoming an affirmation of that claim.”
The extra review adds more delay and costs to New York- based Fox’s purchase of the 61% of Sky it doesn’t already own, Rupert Murdoch’s second attempt at the broadcaster he founded after a phone-hacking scandal at his newspapers derailed a 2010 bid.
While James Murdoch, 44, wouldn’t comment on any concessions Fox would make to gain approval, he said he was confident the deal would go through. The company expects the deal to be completed by mid-2018, barring further delays.
The keynote address gave the executive the chance to distance the tribulations at Fox News in the US from Sky News in the UK, which he praised for its broadcasting standards. He defended the handling of sexual-harassment claims at Fox News, centred around Roger Ailes — the now-deceased former co- founder, CEO and chairman who built the company with Rupert Murdoch — saying that firing Ailes was “not a hard decision.”
James Murdoch’s comments highlight generational change at his father’s media empire, even as the elder Murdoch, 86, maintains a grip on power as co-chairman of 21st Century Fox and Fox News chairman. Opponents of the deal have thrown a spotlight on harassment allegations at Fox News as well as the past handling of the phone-hacking scandal at News Corp, which is now separate from the US film-and-television operation.
Culture Secretary Karen Bradley, speaking in Parliament yesterday before travelling to Cambridge for the conference, said she would direct the Competition and Markets Authority to investigate Fox’s commitment to broadcasting standards and whether its takeover of London-based Sky would give the Murdoch family too much sway in the country’s media.
In referring on broadcast standards, Bradley went against the recommendations of communications regulator Ofcom. At the Cambridge event, the head of the authority, Sharon White, said Ofcom “took the utmost care” in its review and its advice was clear that a referral on broadcast standards wasn’t needed.
Sky shares were little changed, trading at 931.5 pence as of 1:39pm in London, a 13% discount to the offer price. While the investigation opens the deal to more uncertainty, some analysts see it as a necessary step toward probable approval.
“It’s very much making sure every base is covered, but it’s unlikely to make a big difference” as the deal will probably be approved, said Ian Whittaker, an analyst at Liberum Capital Ltd in London. Asking for a deeper probe of both broadcasting standards and media plurality helps Bradley diffuse any political tension and weaken potential legal appeals from opponents, he said.
Rupert Murdoch, co-chairman and founder of Twenty-First Century Fox, gestures while arriving at the News Corp building in New York on April 26. u201cIf the UK is truly open for business post-Brexit, we look forward to moving through the regulatory review process,u201d Murdoch said yesterday at a Royal Television Society conference in Cambridge.
