21st Century Fox’s bid to buy UK’s Sky hits snag

Even as 21st Century Fox plans to sell much of its assets to Disney, the company was still hoping to purchase British satellite broadcaster Sky. In turn, Sky would have been part of the Disney-Fox deal.

However, the potential Sky sale has hit a snag. The Competition and Markets Authority in the UK has issued a provisional ruling that a sale of Sky to the Rupert Murdoch-owned Fox wasn’t in the public interest and could concentrate too much power to Murdoch.

It’s a huge setback for Fox, which owns 39% of Sky and was hoping to increase its share to 100%. Sky not only provides entertainment programming to UK subscribers and viewers in Europe, but also a huge block of sports, including boxing, Formula 1, golf, the NFL, and (perhaps most importantly in the UK) the Premier League.

The CMA noted that the media outlets the Murdoch family owns, including a newspaper group, his portion of Sky and a radio operator, would give them control of the media that would be “watched, read or heard by nearly a third of the UK’s population….”

Even with the CMA’s initial ruling, Disney still has plans to buy 21st Century Fox’s stake in Sky, and perhaps the entire company on its own, even if Fox isn’t able to gain approval.

In its statement on purchasing 21st Century Fox’s assets, Disney CEO Bob Iger said Sky was the “crown jewel” of the deal. Sky not only serves the UK, but also sends its signal to Austria, Germany, Ireland, and Italy. Fox still has a chance to gain approval and remains optimistic that it will be able to go forward with its purchase.

[Variety]