Walt Disney could buy Sky News from 21st Century Fox in a bid to ease concerns over the Murdoch family’s influence on British media if its planned takeover of the news outlet’s parent company, Sky, goes ahead.
It is one of two proposals being made by Fox as it seeks to persuade the UK’s Competition and Markets Authority to approve its £11.7 billion (Dh60.42bn) bid for Sky.
In this scenario, Disney would end up acquiring Sky News whether or not its purchase of Fox’s entertainment assets goes ahead.
Disney announced a $52.4bn deal to buy Fox’s entertainment assets last December, including Fox’s current 39 per cent stake in Sky.
Disney owns ABC News and therefore could be seen as a good fit for Sky News.
The other proposal would involve a legal separation and ringfencing of Sky News, including the creation of an independent board of directors. Under this scenario, funding for Sky News would be guaranteed for up to 15 years – five years longer than Fox had earlier pledged.
Announcing the two remedies, 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.”
Fox bid two years ago for the 61 per cent of Sky it does not already own, following a failed earlier takeover attempt.
The Murdochs want to consolidate their hold on the European pay-TV giant as traditional media firms, faced with new competitors such as Netflix and Amazon, look to combine content creation and distribution channels.
But although the deal was approved by European authorities, it was knocked back by Britain’s competition watchdog, who said in January that it is not in the public interest because it would give the global media mogul Rupert Murdoch and his family “too much control” over the country’s media.
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Mr Murdoch's family already have extensive media holdings, including stakes in newspapers such as The Sun and The Times.
Another twist in the tale came when American Comcast, which owns NBC and Universal, unveiled a higher £22.5bn offer for Sky in February, setting up a race between the two media empires as they both sought to get their hands on the company set up in 1989 by Mr Murdoch.
Fox’s statement on Tuesday added: "We will continue to work with the regulator, and then the Secretary of State at the appropriate time, and leave open the possibility to pursue all of our legal options if necessary.”
Sky also expressed in a separate statement its confidence that the proposals will tackle the regulator’s fears, saying: “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.”
Alex DeGroote, a media analyst at Cenkos Securities, told The National that Tuesday's announcement illustrates the extent to which Fox desperately wants to get this deal over the line.
“They’ve now gone as far as to persuade Disney to buy a lossmaking business, because everyone knows Sky News doesn’t make any money,” he said.
“The fact that Disney has agreed to this today suggests that the next thing to expect is a revised bid from Fox/Disney for Sky, to match or beat Comcast’s offer."
The CMA will now review the proposals and is due to report back to British culture secretary Matt Hancock by May 1, who will make a final decision on the deal.