A UK government regulator has set back Fox's buyout of Sky, saying the deal wouldn't be in the public interest.
The provisional ruling by the Competition and Markets Authority found that Fox taking full control of the UK broadcaster would raise media plurality concerns by giving the Murdoch Family Trust "too much influence over public opinion and the political agenda" in the UK. It currently has a 39 percent stake in Sky and was aiming to buy the other 61 percent.
News Corp Executive Chairman Rupert Murdoch's family already owns Fox and News Corp, which publishes the Sun and Times newspapers. Its news outlets are watched, read or heard by nearly a third of the UK's population.
The regulator also concluded that Fox has a "genuine commitment to meeting broadcasting standards in the UK." While it noted that unedited international Fox News caused compliance issues, "this did not outweigh the detailed and effective policies and procedures that Fox has in place in relation to its UK-focused channels."
last year. If both deals go through, Disney could end up owning most of Sky, a telecommunications giant that offers television, internet and phone services in the UK.
A representative from 21st Century Fox responded to the ruling with this statement:
Today's provisional findings move our proposed Sky transaction forward to the next phase of the regulatory review process. We welcome the CMA's provisional finding that the Company has a genuine commitment to broadcasting standards and the transaction would not be against the public interest in this respect.
Regarding plurality, we are disappointed by the CMA's provisional findings.
We will continue to engage with the CMA ahead of the publication of the final report in May.
We also note that the CMA has elected to avail itself of the statutory 8-week extension, moving its deadline for a final decision to May 1, 2018. We anticipate regulatory approval of the transaction by June 30, 2018.
Originally published, Jan 23 at 12:19 p.m. GMT.
Update, 2:17 p.m. GMT: Adds comment from 21st Century Fox.