US media giant Disney has made a surprise move by offering to buy Sky News as Rupert Murdoch hits regulatory walls with a Sky takeover.
The offer comes after the Competition and Markets Authority (CMA) – a UK government body responsible for strengthening business competition – ruled that Murdoch’s proposed £11.7bn acquisition of Sky would not be in the public interest.
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Murdoch’s Fox (NASDAQ:FOXA) network is attempting to go through with the acquisition of British broadcast media firm Sky by buying the 61% of the company which it does not already own. However, the Competition and Markets Authority have expressed concerns that this would give Murdoch too much influence over British Media. Indeed, popular British news outlets owned by the Murdoch family include newspapers the Sun, the Time and the Sunday Times. All in all, Murdoch’s media is consumed by almost a third of the UK’s population, according to the BBC.
By offering to purchase Sky News as a separate entity, the Walt Disney Company should allay regulatory concerns by taking Sky’s news outlet from Murdoch’s hands.
Leader of the UK’s Liberal Democrat party Vince Cable has welcomed the news, albeit with some apprehension. Quoted in the FT, an aide to Mr. Cable said he would be content with the deal, so long as “Sky News were truly independent as part of any deal, and James Murdoch didn’t somehow appear on a board of directors somewhere.”
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But Fox wasn’t so diplomatic. In a statement, the company said: “We are aware that a group of politicians that is opposed to the transaction is seeking to influence the CMA and is making a number of unsupported and fanciful assertions.” In addition, the company claimed that if the CMA were to accept such influences, it would “compromise the integrity of a system which is supposed to be objective”.
It remains to be seen what decisions will be made in the next few days. Either way, Murdoch’s media dominance in Britain is set to increase. Stocks in 21st Century Fox are up 0.03% today as investors receive the news with mixed opinions. Meanwhile, Disney (NYSE:DIS) stocks have risen 0.77% to $99.42 USD per share, bringing the entertainment giant’s market cap to $152.19B.
Featured image: Daily Star/Getty
