The UK's Competition and Markets Authority (CMA) has this morning set out more detail about what it intends to examine in its investigation into the proposed takeover of Sky Plc by 21st Century Fox, a Delaware-incorporated listed on NASDAQ in New York.
Karen Bradley, the Secretary of State for Digital, Culture, Media and Sport, referred the deal to the Competition and Markets Authority (CMA) on public interest grounds on 20 September. The CMA says it will now examine how the deal would impact media plurality and broadcasting standards in the UK.
Ofcom, the UK's communications regulatory, has officially defined plurality as
- ensuring there is a diversity of viewpoints available and consumed across and within media enterprises and
- preventing any one media owner or voice having too much influence over public opinion and the political agenda
What the CMA wants
In today's 22-page statement of issues the CMA says it will particularly welcome views and evidence that address
- whether and how the ability of the Murdoch Family Trust (MFT) to control or influence editorial and commercial decisions at Sky News will change as a result of Fox’s share ownership increasing from approximately 39% to 100% and whether that change is material in nature
- whether and how the range of viewpoints available from news and current affairs sources in the UK is evolving in general and would change in particular as a result of the transaction
- how people consume news and current affairs and the extent to which they rely on multiple sources and how this is likely to change in future
- the impact and importance of different news and current affairs sources, including online and through social media, for media plurality and, in turn, the implications of the impact of online and social media on the use of traditional (ie broadcast and print) news and current affairs sources by consumers
- whether and how the ability of the MFT to influence the political agenda will change as a result of the transaction
- the level of media plurality in the UK that should be considered sufficient
- whether and how the transaction would result in an insufficient level of media plurality in the UK, taking into account the increase in the level of control held by the MFT over Sky following the Transaction and its existing control over Fox and News Corporation (News Corp)
- any existing factors which might help to prevent or reduce any potential negative effects of the Transaction on media plurality
- Post-transaction broadcasting standards
Evidence in writing
Anyone who wants to provide evidence should do so in writing, by no later than 5pm on Tuesday 24 October 2017. Email FoxSky.Submissions@cma.gsi.gov.uk or write to: Project Manager, Fox/Sky merger inquiry Competition and Markets Authority, Victoria House, Southampton Row, London WC1B 4AD.
The CMA has appointed an investigation group responsible for providing the Culture Secretary with its final report. This will be chaired by Anne Lambert. The other panel members are Sarah Chambers, John Krumins and Tim Tutton.
It says that all are chosen from its expert independent panel members. They come from a variety of backgrounds including public policy, business, economics and law. Anne Lambert said: “The CMA will use its extensive experience of investigating different issues in a wide range of sectors to thoroughly and impartially investigate the proposed takeover.”
Deadline set as 6 March
The CMA is required to report to the Secretary of State with its recommendations within six months of opening the investigation. The statutory deadline is 6 March 2018.
The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
It says that while it intends to meet with third parties, it cannot undertake to meet with everyone that wishes to do so. It says it will consider meeting with parties who explicitly request this but only if it believes it will be able to obtain additional information and evidence to that included in their submission.
Translation: no time-wasters need apply.
A full timetable for the six-month investigation is set out on the merger investigation. This sets out all steps and provisional deadlines until the final report, including the timeline for submissions from third parties.
The CMA is not in this instance looking at competition issues. Those were investigated by the European Commission, which cleared the transaction on 7 April.
For the record
For the record, on 9 December 2016, Fox announced its intention to acquire the fully diluted share capital of Sky not already owned by Fox and its affiliates, increasing its existing shareholding from approximately 39%. The offer is for a consideration of £10.75 a share (£11.7bn). The price this morning was £9.18.
Ofcom recommended a referral to the Competition Commission the last time that the Murdoch machine tried to buy the shares of the then British Sky Broadcasting (BSkyB). That bid launched in June 2010. It was dropped following the infamous phone-hacking scandal at News Corp's UK newspaper division.
We have asked both the bidder and the target for their immediate reaction to the CMA statement. Neither has yet replied.