A few weeks ago, 21st Century Fox announced its intentions to buy the remaining 61 percent of Sky it does not own. To add another layer to the media takeover, it was reported that Disney could possibly acquire 21st Century Fox which could result in Sky News ultimately being controlled by Disney, but the deal is yet to be approved by U.S. Regulators.
Fox is now faces regulatory pushback from the Competition and Markets Authority (CMA) in the UK. The CMA feels the proposed takeover of Sky is not in the interest of the public as the deal poses a real threat to media plurality. Fox currently owns 39 percent of Sky as well as newspapers in the UK including the Sun, the Times and the Sunday Times.
If this media takeover is completed, it is argued that the Murdoch family, who currently owns 21st Century Fox and all its businesses, would be given too much control over news in the country. If the Murdoch family has control across all media platforms in the UK, this would threaten the diversity of views that make up a healthy media landscape and give them the opportunity to have too much influence over public opinion and also an avenue to push their political agenda.
Based on the concerns of the CMA, Fox has already proposed solutions. Fox wants to make Sky News a distinct company within Sky, having an independent board.
But to what extent will the board be independent?
Rupert Murdoch and his son Lachlan Murdoch are already the Executive Chairmen of Sky. Additionally, the head of Sky would still be appointed by the head of 21st Century Fox; who would evidently have influence over editorial decisions.
In the end, if Fox acquires the outstanding shares of Sky and Disney acquires Fox, the end result will likely be similar. The threat to media plurality may very well come from Disney.
We will be closely watching the developments around these acquisitions and the effects it may have on the stock market.
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