British Regulators Reject Murdoch's Bid For Sky

Jan 23, 2018
Originally published on January 23, 2018 3:28 pm
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AILSA CHANG, HOST:

British regulators have dealt a big blow to Rupert Murdoch and his family's media empire. The Murdochs have been trying for years to take full control of one of Europe's largest broadcasters. The regulators today said that would concentrate too much of the British news media in one family's hands. Joining us now with more details on all of this is NPR's David Folkenflik. Hey, David.

DAVID FOLKENFLIK, BYLINE: Hey there.

CHANG: So what are British regulators so concerned about with a Murdoch takeover here?

FOLKENFLIK: Well, it's the question of concentration of media, you know? The Murdochs through News Corp, another corporate arm of theirs, control major newspapers - The Times of London, The Sun, The Sun on Sunday - together with Sky News, which is an element - a small element but meaningful one of the Sky Broadcasting Company. They'd reach about 31 percent of the country on a regular basis, and regulators said, you know, that's too much. These are, you know, notable owners with a strong voice, and we think that's just too much people controlling - too much being controlled by one outfit.

CHANG: I mean, you mentioned, yeah, the Murdochs have this huge media empire already. Why do they want the Sky Broadcasting Company in particular? What is it about Sky?

FOLKENFLIK: So the patriarch Rupert Murdoch essentially founded the predecessor company of Sky and had to sell off a lot of it when he had huge debts. And he's - the Murdochs don't like sharing ownership. This is a company valued at over $15 billion. It's a major broadcaster not just in Britain but in Germany, in Italy, in Austria, parts of Europe. It provides major broadband commerce there, and it's a major entity in property that would ensure significant cash flow for the Murdoch entertainment empire of 21st Century Fox.

CHANG: Was there a larger context at play here besides the reach of the Murdochs in the media world? I mean, the Murdochs have a lot of political power, a lot of name recognition both in the U.K. and the U.S. Did any of that factor into this decision by the regulators?

FOLKENFLIK: I don't think you can look at this without thinking that this is not a hands-off ownership. Rupert Murdoch in the U.K. as in his native Australia and in the U.S. as well plays a large role in influencing elections, particularly through his British newspapers and particularly through Fox News here in the U.S. A lot of Brits are very concerned about whether Sky News, a cable channel, would essentially be diverted in being more like Fox.

In addition, there have been a lot of scandals. There was the phone hacking and bribery scandal at his tabloids there from which they are still digging out. There was the Seth Rich scandal in terms of Fox News and how they handle things. And there's the signs that Rupert Murdoch has kept his political influence even as he's 86, 87 years old. You know, he's been very much a figure connected with the Trump administration and President Trump himself. So there's a lot of concern about the influence he could play if he had full control of that company.

CHANG: So how much of a setback is this? Is the effort by the Murdochs to take over Sky actually dead, or could we see a resurrection and another attempt?

FOLKENFLIK: Well, it's certainly a blow, and it's a bit of a humiliation. But it's not - you know, they didn't talk about his character being wanting here. And there's some ways they could divert it. Right now, you know, there's a proposal here in America for Walt Disney Company to buy most of the Murdoch's entertainment properties, and that would include their stake in Sky, whether it's their current - call it 40 percent controlling stake or their hundred percent were they to win this bid.

They're not going to win it if they still have Sky News. What the regulators said is they can find a way to insulate Sky News from full control of the Murdochs or if they could say, you could set up some deal whereby the entire proposition of taking over Sky is contingent on Disney taking over 21st Century Fox. And that is what is in play, and we'll see how the Murdochs react.

CHANG: All right. That's NPR media correspondent David Folkenflik in New York. Thanks, David.

FOLKENFLIK: You bet.

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