According to the news report by Bloomberg, the Walt Disney Co. has made an offer to buy Sky News to help 21st Century Fox and Rupert Murdoch in their attempt to win over English regulators who are reviewing Fox’s bid of £11.7 billion ($16.5 billion) for Sky Plc.
Fox told the Competition and Markets Authority (CMA) in the UK that Disney was interested in buying Sky whether or not the company’s $52.4 billion acquisition of a large part of Fox was successful or not. Fox also told the UK authorities that Sky News’ independence in journalism would be maintained. Fox even offered to set Sky up as an independent entity with separate governance to ensure that the agency’s journalistic integrity would be maintained.
Comcast Corp had made a competing offer for Sky News in February this year, which has made Fox step up its game in an effort to win the deal. Fox currently owns about 39% of Sky. However, to be able to sell all Fox’s media businesses to Disney, Murdoch needs to buy out the other 61% of Sky’s stake.
And this is not the first time that Murdoch has tried to buy out Sky Plc. In 2011, he had made a £7.8 billion bid for Sky. Unfortunately, he was forced to withdraw the offer when Fox became embroiled in a phone-hacking scandal at his own company’s newspapers. This led to the closing of his newspaper, The News of the World, which was the first newspaper that Murdoch had acquired in the UK.
The reason why British regulators are resistant to allowing the sale to go through is because Murdoch’s company – News Corp. – already owns The Times, The Sun as well as The Sunday Times publications. Buying Sky Plc could end up giving Murdoch too much control over British media, regulators fear.
According to The New York Times, Murdoch’s existing publications reach more than one third of the British population. And Sky News, according to Fox’s Chief Executive Robert A Iger, is a real crown jewel. It has 23 million customers and also hold the broadcast rights to the English Premier League – a very lucrative contract.
At the time of the initial bid, Fox had promised that Sky would have a separate editorial board and would also be guaranteed 10 years of guaranteed funding for the country’s oldest 24-hour news service agency. And now, Fox has upped the deal and had promised guaranteed 15 years’ worth of funding for the news company.
Sky also added its support for the Fox offer, stating that the remedies suggested by Fox to maintain its independence worked and would also guarantee the long-term survival of the British news agency. The news agency’s shares rose by 2% after this news broke.