21st Century Fox has said it would sell off Sky News to Disney or ring-fence it to allay regulatory concerns over its proposed acquisition of the part of Sky it doesn’t already own. It faces regulatory problems after the Competition and Markets Authority found the £11.7bn (€13.4bn) deal was not in the public interest.
Fox had already pledged to ensure the independence of Sky News. The Murdoch family’s news outlets are currently consumed by nearly a third of the UK’s population across TV, radio, online and newspapers.
Under the new proposed deal, the news channel would become a distinct company within Sky, run by the head of Sky News. Funding for Sky News would also be guaranteed for 15 years.
The executive chairmen of Fox, Rupert Murdoch and his son Lachlan, would not try to influence editorial decisions made by the head of Sky News, according to a statement by 21st Century Fox.
Disney has made a bid for the TV assets of 21C Fox.
The CMA published two alternative remedy proposals submitted by Fox.
The first – ring-fencing of Sky News – would involve the legal separation of Sky News, with all of Sky News’s operations being transferred into a new subsidiary.
It would have its own independent board, supplemented with safeguards ensuring ongoing editorial independence.
The new Sky News company would continue to be owned by Sky and funding would be guaranteed for 15 years.
The second option would be to transfer Sky News into a legally separate entity which would then be sold to Disney after completion of 21st Century Fox’s acquisition of Sky, irrespective of whether Disney’s proposed acquisition of 21st Century Fox reaches completion.
Funding in this case would be guaranteed for 10 years.
A Statement from 21st Century Fox said: “We have worked diligently with the CMA throughout its extensive review. In fact, we believe that the enhanced firewall remedies we proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the CMA’s provisional concerns. These enhanced remedies went above and beyond what Ofcom, the expert, independent regulator on UK broadcasting, had stated would mitigate concerns around media plurality.”
“We are aware that a group of politicians that is opposed to the transaction is seeking to influence the CMA and is making a number of unsupported and fanciful assertions,” it concluded.
In a separate Statement, Sky said it noted the publication of the alternative remedy proposals
“Sky believes that both of these remedy proposals comprehensively address any plurality concerns the CMA may have, and would guarantee the long-term future of Sky News and its ongoing editorial independence,” it said.
“As the regulatory process remains ongoing, shareholders are advised to take no action at this stage. The Independent Directors of Sky are mindful of their fiduciary duties and remain focused on maximising value for Sky shareholders. A further announcement will be made as and when appropriate,” it added.