Fox/Sky Deal May Be Referred to Further UK Investigation

U.K. Secretary of State for Culture, Media and Sport Karen Bradley wants to refer Fox's planned buy of Sky to the Competition and Markets Authority (CMA) for a full, six-month investigation, she said in a statement Tuesday to Parliament. She cited media plurality and commitment to broadcasting standards issues as the reason. She said since Ofcom concluded "there are non-fanciful [broadcasting standards] concerns" with the deal (see 1708250035), those concerns meet the threshold for a reference on broadcasting standards grounds. She said CMA might want to look at the lack of procedures for broadcast compliance in the U.K. for Fox News, since Fox established such procedures only after Ofcom raised the issue, and look at corporate governance issues and whether Fox will have "a genuine commitment" to broadcasting standards. She said the parties had 10 days to respond to her proposed decision to refer to CMA, after which she will come to a final decision. Fox in a statement said it was disappointed, and cited Ofcom concluding that it and Sky have compliance records consistent with comparable license holders and that Ofcom in August said there weren't sufficient concerns to warrant referring the deal based on broadcast standards consideration. Fox said it's "surprised that after independent regulatory scrutiny and advice, and over four months to examine the case, the Secretary of State is still unable to form an opinion," and it still expects to close on Sky by June 30. Bradley's announcement "is more a political issue" than an actual question of Fox commitment to broadcast standards, Wells Fargo analyst Marci Ryvicker emailed investors: "Ms. Bradley is trying to disentangle herself from shouldering the responsibility of this deal."