Finance

Bid by 21st Century Fox to buy Sky TV sparks political row in UK

An offer from 21st Century Fox to buy Sky TV has sparked a major political row in the UK – as Rupert Murdoch makes his bid to reassert total control in the company. The billionaire media mogul was forced to take a step back from Sky in 2010 – following the phone hacking scandal. However, Murdoch who owns 21st Century Fox has now made a fresh offer of 18.5bn for Sky TV.

The bid has seen shares in Sky TV rocket by over 30% since the announcement of the bid emerged. But news of the potential takeover has been met with anger in some quarters with former Labor leader Ed Miliband calling for Prime Minister Theresa May to move swiftly to block the takeover bid and refer it to the CMA(Competition and Markets Authority).

Miliband tweeted: “Do we want Rupert Murdoch controlling even more of the media landscape? No. Government must refer bid for Sky TV to CMA/Ofcom. He added the following in a separate tweet. “On the steps of Downing Street, Theresa May said she would stand up to the powerful. No better test than Murdoch bid for Sky. Over to you.”

The chief executive of 21st Century Fox is Mr Murdoch's son James, who is also Sky's chairman - and he was the predecessor to Sky's current chief executive Jeremy Darroch.

His son's return to the company, after he was forced to resign when the Murdoch media empire became engulfed by public outrage at reports of phone-hacking at the Murdoch-owned News of the World newspaper, led to rumours that Rupert Murdoch would make a fresh swoop for the UK-based satellite broadcaster. His empire abandoned its bid in 2011 because it was 'too difficult to progress in this climate'.

When he started the bid in 2010, his portion of Sky and his British newspapers were part of the same company, but they have since been split up. His bid vehicle owns Fox television and film studios, but not the Sun and the Times newspapers.

MP Chris Bryant waded into the row and tweeted: “It would be bad for our broadcasting ecology, for UK political life and for media plurality for Murdoch to be allowed to take back Sky.”

If the deal is confirmed, culture secretary Karen Bradley will have 10 working days to decide whether she will issue a public interest intervention notice (PIIN).That will need to detail the concerns she has with the deal - she could raise concerns about whether Rupert Murdoch is a 'fit and proper' person, or highlight issues of competition.

If she submits a PIIN, Ofcom will conduct an initial investigation within 20 days. If it has concerns, Ms Bradley will have to ask Fox to address any issues, and decide whether to accept what they suggest.

A rejected compromise would send the bid to the Competition and Markets Authority for full review, which could take up to six months. After their scrutiny, Ms Bradley will have 30 days to block, or approve the deal with conditions. Many believe Ms. Bradley will have to submit a PIIN because to do nothing could lead to accusations of bias.