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Fox-Sky Deal in British Government’s Hands After Regulator’s Report Lands

Variety logo Variety 6/20/2017 Stewart Clarke
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A decision on 21st Century Fox’s proposed £11.7 billion ($14.9 billion) takeover of Sky has edged closer after the British government received a report on the deal from regulatory agency Ofcom on Tuesday. The contents of the report were not disclosed.

The agency was tasked by the government in March with examining whether the deal would affect media plurality in the U.K. The regulator’s report, thought to run to 100-plus pages, was delivered to the Department for Culture, Media and Sport on Tuesday morning.

To be licensed by Ofcom, U.K. media companies also need to pass a test on “fit and proper” ownership. Ofcom is likely to have also offered its guidance to the department on that element of the deal.

In a statement, the department confirmed that it had received the report and that the department secretary, Karen Bradley, would make a presentation in Parliament by June 29.

An Ofcom statement confirmed that it has submitted “the public interest report today.”

“The Secretary of State will now decide whether to refer the proposed deal to the Competition and Markets Authority for a ‘phase two’ inquiry,” the statement said. It added that this decision will be made by June 29.

Basically by June 29 Bradley will either open a discussion in parliament on her initial decision regarding the merger deal, or announce an extended review.

There have been concerns that the takeover would concentrate too much power in the hands of Fox. Sky is the largest pay-TV platform in Europe and has extensive pay-TV operations in the U.K., Germany, and Italy.

The European Commission has already given its approval to the takeover.

The Daily Telegraph reported last month that James and Lachlan Murdoch met with Ofcom head Sharon White behind closed doors in support of Fox’s bid to buy the 61% of Sky that it does not already own.

Recapping the various stages of the merger approval process, Ofcom said:

“On 6 March 2017 we announced that we would examine any implications of a change of control over Sky for its holding of broadcast licences.”

“Because the issues we have considered in the public-interest and fit and proper assessments overlap, we have considered these matters within the same timeframe.”

“We have today provided our fit and proper assessment to the Secretary of State. Ofcom will publish that assessment when the Secretary of State announces her ‘minded-to’ decision and publishes the public interest report,” the statement noted.

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