Government allows Fox’s Sky takeover – if Murdochs and Sky News are fenced off

Sky News to be fenced off from Fox and News Corp offerings

Matt Hancock, the UK culture secretary, has given the go-ahead to 21st Century Fox’s takeover of broadcaster Sky – however there remain concerns about the editorial independence of Sky News.

The Competition and Markets Authority (CMA) has ruled that Sky News would need to be divested to Disney upon its merger with Fox - or sold to another firm. The CMA's main concern was of the “potential erosion of Sky News' editorial independence, which could in turn lead to a reduction in the diversity of viewpoints available to and consumed by the public”.

Furthermore, concerns were raised around the "possibility of an increased influence of the Murdoch Family Trust over public opinion and the UK’s political agenda".

On the 15 December 2016, Fox first announced its intention to buy up the remaining shares in Sky, but one year later the waters were muddied with Disney’s proposed purchase of Fox. In this instance, it was noted that Disney could take full control of Sky – and as a result Sky News. This for now, sidestepped concerns around media plurality.

Speaking at the House of Parliament, Hancock announced the decision: “The CMA concluded in line with its interim findings that the merger may not be expected to operate against the public interest on the grounds of a genuine commitment to broadcasting standards.”

To reduce Murdoch influence, Hancock suggested erecting “a firewall of behavioural commitments to insulate Sky News from the influence of the Murdoch Family Trust;” and second “a ring fence, where Sky News would be separated structurally from Sky, but still owned by Fox. Along with the same behavioural commitments.”

For the deal to be processed however, the Hancock needs to “be confident that the final undertakings ensure that Sky News: remains financially viable over the long-term; is able to operate as a major UK-based news provider; and is able to take its editorial decisions independently, free from any potential outside influence.”

He warned: “If we can’t agree terms at this point, then I agree with the CMA that the only effective remedy now would be to block the merger altogether. This is not my preferred approach.”

The full report can be read here.

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