TEN Takeover: What The Federal Court Was Not Told About The Murdoch Bid
While Darren Davidson the media writer on the Australian, was spinning the Murdoch party line in the defence of the decision to hand Channel 10 to CBS after a botched takeover strategy by Lachlan Murdoch, he failed to mention that a UK court is about to investigate the Murdoch family’s failings on corporate governance and editorial compliance in their attempted takeover of shares in Sky TV in the UK.
As Davidson was telling readers that Ten’s administrators failed to tell creditors a takeover by CBS did not treat all of them (Murdoch entities included) equally the UK competition watchdogs signalled that the Government has initiated a major expansion of their investigation into Murdoch’s and Fox’s £11.7bn takeover of Sky.
The controversial deal now faces an uncertain future as the UK Culture Secretary Karen Bradley announced that she has changed her mind over the need for a full examination of 21st Century Fox’s commitment to broadcasting standards.
This is the same operation that wants to try and grab Channel 10.
She told MPs there were “non-fanciful” concerns that full Murdoch control of Britain’s dominant pay-TV operator could damage the public interest in maintaining standards on screen.
The CMA will then have six months to investigate with the possibility of an extra eight weeks if required. Any remedies demanded by the watchdog to guard against damage to plurality or broadcasting standards are then likely to further run down the clock. Fox said that without more delays it expects to complete its takeover of Sky by the end of June.
It will be liable to pay a £200m break fee if the scrutiny process drags on until next August. The Murdochs could also face new criticism in planned court cases over allegations of phone hacking at The Sun.
A Sky spokesman said the company was “disappointed by this further delay”. It has previously claimed that the wrangling over the takeover could limit its ability to invest.
the UK regulator Ofcom confirmed there were concerns about inadequate compliance procedures at Fox News, the Murdochs’ questionable US news operation. It made the same assessment about corporate governance failings exposed by a string of sexual harassment allegations at the channel which Murdoch ended up forking out millions to settle.
The UK Telegraph said that the move shocked investors, who sent Sky shares sliding to their lowest level since Fox made its approach in December. The sell-off exposed mounting market fears that the Murdochs could once again fail to acquire the 61pc of the company they do not control.
The family’s previous bid, under the News Corp flag, was abandoned in 2011 as the phone hacking scandal engulfed their British newspapers.
It will be interesting to see whether Australian authorities move to investigate Fox’s commitment to broadcasting standards similar to he UK move.
Ironically the story has not been reported in Murdoch’s Australian newspaper who claim to deliver “impartial” media news.
The media regulator Ofcom said in June there may be grounds for an investigation of Murdoch family control of the British news landscape.
Ofcom at the time included in its assessment recent allegations that Fox News colluded with a prominent Trump donor to knowingly publish concocted quotes in a false story that claimed a murdered Democratic Party official was behind the leak of Hillary Clinton’s emails. The story has been retracted and Fox news denies the allegations of collusion.
The addition of broadcasting standards to the CMA’s investigation means a further delay to scrutiny of a takeover that is already running months behind schedule. Fox and others will have 10 days to respond to Ms Bradley’s announcement before the case is formally referred to watchdogs.
Ms Bradley’s announcement sets up a potentially awkward encounter with James Murdoch, who is chief executive of Fox and chairman of Sky, at the Royal Television Society Convention in Cambridge later today where they are both scheduled to speak. Sharon White, chief executive of Ofcom, is also on the bill.
Mr Murdoch’s appearance was originally intended to be a victory lap, as Fox initially told investors it expected to complete the acquisition by the end of this year and that regulatory clearance would not cause problems.
At the close of trading Sky shares were 937p, down 1.6pc and significantly short of Fox’s £10.75 offer.