James Murdoch, chief executive of 21st Century Fox and chairman of Sky, has suggested that 21st Century Fox’s £11.7 billion (€13.6bn) takeover of Sky would benefit the UK creative sector and beyond, proving to be “a significant driver of the UK creative industry’s long-term success in the global market.”
Speaking at the Deloitte Enders Media & Telecoms 2017 and Beyond conference in London, Murdoch said that together, 21st Century Fox and Sky invested around £700 million in 2016 on original production in the UK alone. “We intend to continue at least that level of investment while building on Sky’s already outstanding original content pipeline,” he confirmed. “We intend to continue at least that level of investment while building on Sky’s already outstanding original content pipeline.”
“Looking to the future, 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 asserted.
He said that to do this at scale, which the proposed combination enabled, would ensure that the Sky business could “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”.
In mid-December 2016, Sky said it had reached an agreement with 21st Century Fox to acquire the remaining shares of the company that it did not already own just five years. The move followed an aborted bid from then-Fox owner News Corporation in the wake of the UK phone hacking scandal.
21st Century Fox confirmed March 3rd that the European Commission (EC) has formally been notified of the bid. This triggers a 10-day countdown for culture secretary Karen Bradley to decide whether to refer the bid to Ofcom. She confirmed in a Statement that she has written to the parties to inform them that she is ‘minded to’ issue a European Intervention Notice on the basis that she has 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,” she said in a Statement.
Bradley plans to give her final decision to be given in the week beginning March 13th.
A group of UK parliamentarians at the end of 2016 called for the bid to be blocked – and not just delayed, but completely thrown out, calling for a full re-investigation by Ofcom.
In February 2017, Sharon White, chief executive of Ofcom, wrote to former opposition leader Ed Miliband, a critic of the proposed deal, suggesting that it was “appropriate” to consider the implications of a takeover.
Although not referring specifically to the deal, White, speaking at the conference, said it was essential for Ofcom to strike the right balance between lacking regulatory teeth and adopting a heavy-handed approach to regulation that could threaten to stifle private sector innovation and the incentive to invest, noting that network and content providers were “jostling for position” in a market where mergers arguably may hamper competition.