UK minister ‘minded’ to refer Sky deal to Ofcom

Karen Bradley

UK culture secretary Karen Bradley has said she is “minded” to refer 21st Century Fox’s full takeover of Sky to regulator Ofcom on public interest grounds.

In a statement published Friday, Bradley said that said that she would make her final decision in the week beginning March 13 about whether to issue a European Intervention Notice.

If issued, this would trigger an assessment by Ofcom and a Competition and Markets Authority report that would both be reviewed by Bradley.

“I have, today, written to the parties to inform them that I am ‘minded to’ issue a European Intervention Notice on the basis that I have concerns that there may be public interest considerations – as set out in the Enterprise Act 2002 – that are relevant to this proposed merger that warrant further investigation,” said Bradley.

“To be clear – I have not taken a final decision on intervention at this stage. In line with the guidance that applies to my quasi-judicial role I am inviting written representations from the parties and will aim to come to a final decision on whether to intervene in the merger within ten working days of today’s notification.”

Speaking at the Deloitte Enders Media & Telecoms 2017 and Beyond conference in London last week, 21 Century Fox CEO James Murdoch claimed that the company’s consolidation of Sky will provide a major boost for creative industries in the UK, Germany and Italy.

“We’re confident the enhanced scale and capabilities of the combined company will be a powerful driver of the creative industry’s vibrancy in Britain, plus in Italy, and in Germany, and in the global market, and a provider of better experiences for customers everywhere,” he said.

“To do this at scale, which this combination enables, ensures that the Sky business can continue to compete within a competitive set that now includes some of the largest companies in the world, but none of whom have the local depth of investment and commitment to the UK and to Europe.”

However, the plan remains controversial, with a group of UK cross-party politicians last month calling for Ofcom to launch a review into 21st Century Fox CEO James Murdoch’s suitability to hold a UK broadcasting licence.

Ofcom carried out a test of whether Sky should hold a broadcast licence in 2011 at the height of the phone-hacking scandal. While Sky was cleared, the regulator criticised Murdoch – though it fell short of stating that he was not a fit and proper person to hold a broadcast licence.

21st Century Fox agreed in December to pay £11.7 billion for the 61% it does not already own of Sky. The terms of the takeover a deal that will value the pay TV operator at £18.5 billion (€22 billion).