In its latest attempt to help obtain approval of its $15 billion takeover bid for pan-European satcaster Sky, 21st Century Fox has sent a letter to Britain’s Competition and Markets Authority proposing to extend its commitment to maintain Sky News to at least 10 years. The letter also states that the new commitment, doubled from a previously proposed five years, would no longer be subject to 21st Century Fox owning more than the 39.1% of Sky shares it currently holds.
The Competition and Markets Authority, or CMA, the British competition watchdog charged with reviewing the Fox-Sky bid, published the letter from Antonio Bavasso, of international law firm Allen & Overy, on its website Tuesday morning.
On Jan. 22 the CMA published a provisional report saying it had “provisionally found that Fox taking full control of Sky is not in the public interest due to media plurality concerns, but not because of a lack of a genuine commitment to meeting broadcasting standards in the U.K.” The regulator raised concerns that Murdoch-owned news outlets were already watched or read by a third of the British population and a deal “would lead to the Murdoch Family Trust, which controls Fox and News Corporation, increasing its control over Sky, so that it would have too much control over news providers in the U.K. across all media platforms (TV, Radio, Online and Newspapers), and therefore too much influence over public opinion and the political agenda.”
The provisional findings suggested that Fox might be able to mitigate the concerns on media plurality by spinning off Sky News or by finding ways “to insulate” the news channel from the Murdochs’ influence. Last week it emerged that Fox had offered to strengthen the editorial independence of Sky News, proposing what it termed “firewall remedies” that included a five-year pledge to maintain funding for Sky-branded news services and a commitment to set up an independent editorial board for Sky News that would act free from any influence by Fox.
Bavasso’s letter, dated Monday, restated that 21st Century Fox did not consider that the CMA’s provisional findings provided “a reasonable basis on which to conclude that the transaction may be expected to operate against the public interest with respect to the media plurality consideration.” However, it went on to say that Fox had considered points raised by the regulator in response to the proposed firewall remedies put forward on Feb. 12.
The letter sets out six points designed to address concerns raised by the CMA in a response hearing last Wednesday. “The duration of the commitment to maintain a Sky-branded news service has been amended from at least five years to at least ten years,” the letter says. “Linked to this, in addition to maintaining the operational net investment in Sky News for five years from the closing date, 21CF shall also commit to a further five years of investment in Sky News.”
It states that this commitment is “no longer subject to 21CF owning more than 39.14% of the shares in Sky or a successor to Sky.” It also said that the proposed independent Sky News Board, rebranded from the initially proposed Sky News Editorial Board, would be “required on an annual basis to prepare a statement confirming that no instances of influence or attempted influence of the editorial output of Sky News have been escalated to it by the head of Sky News.” The revised proposals also allow for the board the right to nominate a candidate in the event of a replacement being sought for the head of Sky News role.
The CMA has until May 1 to issue a final report.