Rupert Murdoch’s £11.7 billion takeover bid for Sky has been provisionally blocked by the competition watchdog due to fears it would hand the media mogul too much control over UK media.
The Competition and Markets Authority (CMA) said it found that 21st Century Fox’s deal to buy out the remaining 61% of Sky it does not already own was “not in the public interest”.
Its investigation found if the deal went ahead, it would hand the Murdoch Family Trust - which controls Fox and News Corp, the publisher of the Sun and the Times - “too much control over news providers in the UK across all media platforms... and therefore too much influence over public opinion and the political agenda”.
It cleared the deal on the grounds of Fox’s commitment to broadcasting standards, in spite of the phone-hacking scandal at the Murdoch-controlled News of the World tabloid and allegations of sexual harassment at Fox News in the US.
But the CMA said its concerns over the impact on media plurality in Britain meant that overall it believed the deal was against the public interest.
The provisional decision could thwart Mr Murdoch’s plans to take full ownership of Sky for the second time, after the first attempt was abandoned following the phone-hacking saga that led to the closure of the News of the World seven years ago.
It also adds a complication to Walt Disney’s recently agreed $66 billion (£47bn) takeover of 21st Century Fox’s entertainment assets, including Sky.
The CMA has put forward suggestions for how it believes Fox could address its concerns - including spinning off Sky News, or “behavioural” changes to protect Sky News from direct influence from the Murdoch Family Trust.
Newly appointed Culture Secretary Matt Hancock will then decide whether to block the deal, approve it or approve it with conditions.
Sky News has held an emergency staff meeting and question and answer for employees this morning following the CMA decision.
Sky signalled in a submission to the CMA last year that Sky News faced the risk of closure or being spun-off if media plurality concerns prevented the Fox deal going through.
Fox said it was “disappointed” at the provisional ruling.
The company said it will continue to engage with the CMA ahead of the publication of its final report, which has now been put back to May 1.