Rupert Murdoch’s 21st Century Fox has warned it could close down Sky News if its ownership of the service proves to be a stumbling block in the proposed £11.7bn takeover of Sky.
Fox owns 39% of Sky but wants full control of the satellite broadcaster – and has made the threat which would see the demise of Sky News and presumably its roster of much-loved personalities such as Kay Burley and Adam Boulton.
The threat to review the future of the news channel if a deal is blocked was made in a submission revealed this week by Sky to the Competition and Markets Authority.
The broadcaster said the competition watchdog should not “simply assume the continued provision of Sky News and its current contribution to plurality absent the transaction”.
The broadcaster warned it “would likely be prompted to review the position in the event that the continued provision of Sky News in its current form unduly impeded merger or other corporate opportunities available in relation to Sky’s broader business”.
In other words – if you think we own too much of the UK media already we will do away with this loss-making public service news channel.
So what’s really going on?
What is the takeover all about?
The Competition and Markets Authority (CMA) was tasked to examine the Fox bid by culture secretary Karen Bradley in September. Her move was controversial as it appeared to overrule broadcasting regulator Ofcom which had just conducted a three-month investigation of its own, finding that there were grounds to refer the deal to the CMA for scrutiny over media plurality but not over broadcasting standards. The CMA is now engaged in a six-month investigation into whether Fox’s purchase of the remaining 61% of Sky it does not already own would limit media plurality and affect broadcasting standards. Rupert Murdoch’s Fox has already made moves to take over the remaining stake in Sky in 2011 but the plans were scuppered in the wake of the political fallout caused by the phone hacking scandal and in the involvement of Murdoch own newspaper The News of the World.
What is Sky doing?
For some media experts, Fox’s threat is sabre-rattling pure and simple – a threat to strong arm the government and the CMA into giving Rupert his way. But there is also an unmistakable logic to the suggestion of selling Sky News – certainly seen from the perspective of Fox bosses in New York many of whom have very little idea of what Sky News is, its pedigree and place in the nation’s hearts. Sky News as a business loses tens of millions of pounds a year and the commercial logic of closing it and securing the takeover deal certainly exists – at least on paper if you’re a US number cruncher.
How real is Sky’s threat?
It is clear that the threat is Sky’s major card in negotiations. The Government would not like to see the closure of Sky News, with the attendant loss of hundreds of jobs. As one media insider put it: “This is also a clear appeal to the vanity of politicians – they like going on Sky News and they would hate to see it go.” Many also believe that Sky would be very reluctant to close the service down which offers Murdoch’s business interests considerable leverage and soft power in the UK and Europe. This is, in some respects, a high-stakes game of chicken.
Former Labour leader Ed Miliband, no friend of Rupert Murdoch and his media empire was clear what he thought of the subject:
New approach to Sky bid: 'If you don't do as we want,we may close down Sky News.' Trust CMA won't bow to blackmail. https://t.co/fLA8WjiZKx
Closing Sky News would be a drastic option and Sky would probably look to try to find a buyer for the media company before turning off the lights.
RadioTimes.com has been made aware of indications within Sky that managers have privately assured staff that they will be safe – at least for the time being. Which rather goes along with the idea that this threat is more about bluster than reality. But of course, it cannot be nice for Sky News staff to be told that their employment is in jeopardy.
Joey Jones, a former political correspondent at Sky News and now head of public affairs at PR firm Weber Shandwick doesn’t buy it. “The messaging coming through is alarming for supporters of Sky News but it runs completely counter to all the investment that there has been in the channel in all the recent months and years,” he told the BBC.
Another source from a major rival broadcaster summed up the likelihood of the closure more succinctly as “bo****s”.
What would we lose?
Sky insiders are pointing to the irony of the UK broadcasting world losing a service like Sky News in the interests of media plurality. If Sky News was wound up it would easily make the BBC News Channel the dominant operator in the UK market. But at the same time Sky News is still quite a small player in TV terms. Its major segments involving the likes of Burley and Boulton still only average around 100,000 viewers – sizable in one sense but a TV minnow from another perspective. Sky’s big card is that it is watched by powerful people –so called opinion formers – who often appear on its airwaves. And anything that’s been going since 1989 would be sad to lose.
When will the issue be resolved?
The CMA is due to publish the provisional findings of its investigation in December so we will certainly discover the direction of travel then. The final report should be published in February.