Culture Secretary Karen Bradley says she’ll decide by June 29th whether to refer the merger between Sky and 21st Century Fox for a full phase 2 investigation by the Competition and Markets Authority.
In December the US movie and TV giant, which owns 39% of Sky, announced its ambition to buy the rest of the pay-TV giant and fold it into its own operations.
The bid follows a 2011 takeover attempt by Rupert Murdoch’s News Corporation which was dropped in the wake of the phone hacking scandal that led to the closure of The News of the World.
News Corporation has since split into two separate businesses, the TV and movie studio 21st Century Fox, and News Corporation which retains its predecessor’s newspaper, magazine and publishing assets.
Meanwhile Sky has transformed itself by taking control of its Italian and German namesakes, buying up a string of independent production companies, launching a low-cost, contract-free streaming TV service and offering its own mobile phone service.
More widely the UK’s entertainment market has also changed drastically since the earlier bid, thanks to increased competition from Amazon and Netflix, as well as UK rival BT with which Sky competes for sports and which is making its own forays into premium drama.
Despite the changed landscape, the proposed takeover is opposed by some media activists and politicians – concerned about further concentrating ownership of the UK’s media sector – who successfully called on the Government and regulators to review the deal.
In April the European Commission’s competition authorities ruled the proposed merger “would raise no competition concerns” but the UK Government is set to make its own decision on whether to allow the tie-up to proceed.
That decision was expected in May but was pushed back following Prime Minister Theresa May’s decision to call a snap General Election.
Bradley has today (Tuesday) received a preliminary report into the £11bn deal from the CMA, as well as a separate public interest report from media and telecoms regulator Ofcom.
In a statement, she said: “The decision before me now, which I am required to take acting in a quasi-judicial capacity, is whether – taking account of the specified public interest grounds – it is, or may be the case, that the merger operates, or may be expected to operate, against the public interest and therefore whether or not to refer for a fuller phase 2 investigation by the CMA.
“ I will consider these reports in detail before coming to an initial view on whether or not I am minded to refer the merger.
“I will aim to make my initial ‘minded to’ decision, publish the CMA and Ofcom public interest reports – in line with the requirements under the Enterprise Act 2002 – and return to Parliament to make an oral statement by Thursday 29th June.
“There will then be an opportunity for representations to be made before I take a final decision.
“In the meantime, given the ongoing quasi-judicial nature of this process, I am unable to comment substantively on the matter of this case.
“My priority remains – as it has throughout this proposed merger – to make my decision independently, following a process that is scrupulously fair and impartial, and as quickly as possible.”
The CMA report to Bradley will be published on her department’s website on June 29th, with the Ofcom report due to be published on its site the same day.