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Decision on 21st Century Fox buyout of Sky delayed

MUMBAI: The UK Government has delayed the decision over 21st Century Fox buyout of Sky.

UK Culture Secretary Karen Bradley has said to Parliament, “I must take account of all relevant representations made to me. As a result, my final decision on referral can only be made after I have fully considered all relevant evidence on both the plurality and commitment to broadcasting standards grounds. Given the consultation only closed on Friday, there has not been time to consider all the representations, and I am not in a position today to make my final decision on referral.

“What I can do, however, is confirm to the House that having carefully reviewed the parties’ representations, and in the absence of further proposed undertakings, I am currently still minded-to refer on the media plurality ground and still minded-not-to accept the undertakings in lieu of a reference.

“To be clear: as I have said, I must fully consider all relevant representations before reaching a final decision. And I will take the time I need to look at the many I have received, balancing the need for careful consideration of relevant evidence with the merger parties’ legitimate need for a prompt decision.”

She expects to be in a position to come to a final decision on referral – including in respect of the broadcasting standard ground – in the coming weeks, and potentially during summer recess.

She said she has received detailed representations from 21st Century Fox and a letter from Sky – which she will aim to publish – subject to statutory and confidentiality requirements – once she has taken my final decision. She also received a letter from Lachlan and James Murdoch and a further letter from 21 Century Fox which they have since published.

She noted that the detailed representations from 21 Century Fox raise a number of points on Ofcom’s public interest test report – and the analysis underpinning Ofcom’s recommendations – contesting its view that the transaction raises public interests concerns which justify a referral to a Phase 2 investigation by the CMA.

21st Century Fox in its statement said that that it welcomed the recent statement by the Secretary of State that “Ofcom is unequivocal” regarding 21CF’s genuine commitment to broadcasting standards, following advice from the independent regulator which found “there are no broadcasting standards concerns which may justify a reference by the Secretary of State to the Competition and Markets Authority.” At the same time it is disappointed that the Secretary of State remains minded to refer on plurality.

“For over 25 years, 21CF and Sky have been proud broadcasters of good standing in the UK, a responsibility we take very seriously. We also welcomed Ofcom’s decision of 29th June that Sky would remain ‘fit and proper’ to hold a broadcasting licence after this proposed combination.

“In respect of the media plurality public interest consideration, we have proposed comprehensive undertakings to address the points raised by Ofcom. We were pleased Ofcom concluded that these undertakings to maintain the editorial independence of Sky News would mitigate any concerns around media plurality. Consequently, we are disappointed that the Secretary of State remains minded to refer on plurality.

“We respect the importance of regulatory scrutiny, and we continue in our commitment to work constructively with authorities as we have done since this process began. In light of the transaction’s benefits to the UK creative economy, we would urge the Secretary of State to complete the regulatory process expeditiously. 21CF has believed in Sky for over 25 years, and together we have been passionate supporters of the UK creative industries, and built one of the world’s most distinctive brands. Combining 21CF and Sky would create a global powerhouse well positioned to deliver the very best in content and viewing experiences for customers, while securing the UK’s place as a global player in the creative economy.”

21st Century Fox noted that the proposed acquisition has been cleared on public interest and plurality grounds in all of the markets in which Sky operates outside of the UK, including Austria, Germany, Italy and the Republic of Ireland. It also said that the acquisition has also received unconditional clearance by all competent competition authorities. Sky, it added, is Europe’s biggest investor in content, with over £5 billion invested a year. “In the UK alone, 21CF and Sky together invested around £700 million last year in original production and we are committed to invest at least at that level with Sky headquarters in Osterley as our flagship UK presence.”