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Decision to refer Sky bid to regulator a blow to Murdochs – but will it be short-lived?

EPA/Facundo Arrizabalaga

Decision to refer Sky bid to regulator a blow to Murdochs – but will it be short-lived?

The Murdoch Family Trust’s long-held ambition to take full ownership of Sky, the UK’s largest broadcaster (by revenue), appears to have been dealt a blow. The culture secretary, Karen Bradley, has told parliament she is “minded” to refer the £11.7 billion takeover bid by 21st Century Fox for the 61% of Sky that it doesn’t already own to the competition authorities on the grounds that the deal will diminish media plurality in the UK.

In particular, Bradley cited concerns about the Murdoch family’s influence on the news agenda and their “ability to influence the political process” given the merged company’s unique reach across all platforms.

This is not news that Rupert Murdoch will have wanted to hear – not least because a full six-month inquiry by the Competition and Markets Authority (CMA) could lead to Fox having to shoulder a multi-million dollar payout to shareholders for failing to complete the deal before the end of the year.

The bid was originally lodged in 2011 and looked set to proceed, but revelations of phone-hacking and the widespread public revulsion they caused led to the bid being shelved. It was revived late last year and referred to Ofcom by the culture minister.

For critics of the Murdochs, Bradley’s decision is a welcome development – but they shouldn’t get the champagne out just yet as there are some major problems with the government’s position.

Under pressure: culture secretary Karen Bradley announcing her decision on Sky in the Commons. PA/PA Wire/PA Images

First, Bradley noted that the “undertakings” offered by Murdoch to sweeten the deal – such as commitments to an independent editorial board at Sky News and to maintain Sky News as a brand distinct from Fox News – were “insufficient” to allay concerns about the Murdoch family’s influence. Yet she made it quite clear that 21st Century Fox would be able to come back to her with other “undertakings” that she would consider before taking her final decision.

Trust me

When it comes to undertakings from the Murdochs, it is worth recalling what Harold Evans, the former editor of the Sunday Times, had to say. Evans was editor when Murdoch made his bid for Times Newspapers in 1981. He has since written that, at the time, Murdoch met with Margaret Thatcher and promised that he would maintain their tradition of independence: “He broke every one of those promises in the first years,” Evans told The Guardian. In his book on the episode, he quotes Murdoch himself saying that the undertakings were “not worth the paper they were written on”.

James Murdoch, who holds the joint roles of chief executive of 21st Century Fox and chairman of Sky, recently was quoted as saying, in relation to the deal, “that no meaningful concessions will need to be made”.

Second, objections to the deal based on concerns around both corporate governance failures at Fox and the status of the Murdoch family as “fit and proper” holders of a broadcast licence have been waved away by Ofcom. This is before the stalled Leveson-2 inquiry has been able to pursue further allegations of corruption inside Murdoch’s UK organisation together with the spate of lawsuits launched earlier this year in relation to allegations of sexual and racial harassment at Fox.

Ofcom claims to have taken these issues very seriously, but concluded that “we would need to see evidence of misconduct in the parent company, Fox”.

Fox, meanwhile, revealed it had spent about $45m (£35m) in relation to sexual harassment litigation in the nine months to March 2017. It said in a statement: “We take allegations of any form of discrimination extremely seriously.”

The irony, of course, is that Bradley’s own government has failed to give a green light to the Leveson-2 inquiry, which is supposed to deal with the relationship between the press and the police. These issues have not gone away. Dozens of victims of phone hacking are taking legal action against the publisher of The Sun, News UK, in a trial that is expected to start this autumn – right in the middle of the CMA investigation (should it take place).

Friends and influence

Since the recent general election there have been claims in some quarters that media bias is no longer an issue and that – when it comes to the power of their influence – papers like The Sun have had their day. But the agenda-setting power of billionaire media moguls remains an urgent subject for public debate and action.

Avaaz campaigners engaging in a little street theatre while waiting for a decision on Sky. Dominic Lipinski/PA Wire/PA Images

We still don’t know what Murdoch and Theresa May discussed when they had a private meeting in New York last autumn although we do know that Murdoch and his lobbyists have been the most frequent visitors to 10 Downing Street at a time when the press have been desperately lobbying government not to introduce meaningful and independent press regulation.

The media landscape may be changing and new voices may be emerging thanks to wider political transformations but the moguls who have shaped our political culture for so long aren’t quite ready to throw in the towel. Should the deal be allowed to proceed, we would see the Murdoch Family Trust tighten its grip across multiple media platforms and strengthen the family’s position at the top of the media money tree. This story is far from over.