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Sky Says Sky News Could Close If 21st Century Fox Takeover Is Blocked

The ante has been upped the 21st Century Fox-Sky takeover deal, with Sky warning British competition authorities that it might shut down Sky News should the takeover be blocked.

The $15 billion deal, though having received clearance elsewhere, is currently being scrutinized by Britain’s Competition and Markets Authority.

In a submission to the body, Sky cautioned: “The CMA should not in its assessment simply assume the ‘continued provision of Sky News’ and its current contribution to [media] plurality” if the deal falls through. Rather, Sky said it “would likely be prompted to review the position” of Sky News in its current form.

Sky News is a 24-hour news channel that, according to its website, is available in 127 countries. Its correspondents and presenters are well-respected, and the channel is not accused of the bias that critics say marks Fox’s own Fox News.

Fox has previously offered such concessions as creating an independent editorial board for Sky News, but these have failed to convince authorities, which continue to probe the proposed takeover. Fox and Sky have been keen to underline the contribution that Sky News makes in terms of media plurality in the U.K., where Rupert Murdoch already owns other print news properties such as The Times of London and the Sun tabloid. A merged Fox-Sky would be Britain’s third-largest news provider behind the BBC and ITN, providing 10% of news across all platforms, according to research by media regulator Ofcom.

Pulling Sky News would clearly impact plurality, though whether Sky would actually shutter the network if the Fox takeover bid fails is open to debate. “Sky News is a prestigious service but it loses money, and I always suspected that, as the bid ran into more complications, this could be a tactic deployed,” said Stewart Purvis, former ITV chief and media commentator. “Nobody knows if they will go through with it or not.”

With issues of compliance and governance center stage in the scrutiny of the takeover, Ofcom’s censure this week of Fox News programs for breaching impartiality rules was an unwelcome development for 21st Century Fox. The news channel was pulled from the Sky pay-TV platform in August.

Fox is on the hook for a weighty payment to Sky shareholders at the end of the year because of the delays to the takeover deal. It must pay a 10 pence-per-share special dividend, amounting to about £170 million ($223 million). Should the deal collapse altogether, it would have to cough up an additional £200 million.

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