Economy

Sky says it could shut Sky News if Fox takeover blocked

Sky has said it could shut down Sky News if its ownership of the channel proves to be an obstacle to Fox's offer, Reuters reported on November 7.

Regulators are investigating the deal amid concerns that Mr Murdoch's media empire could become too powerful.

The broadcaster said: "The CMA should not in its assessment simply assume the "continued provision of Sky News" and its current contribution to plurality, "absent the transaction". Fox would keep its news and broadcast assets.

This would particularly be the case if shareholders objected to the merger not happening, Sky said.

Suggestions by Sky that it could be willing to close its news channel are "credible" and should not be dismissed, media analysts have said.

Fox, the world's fourth-largest media company and producer of TV hits such as The Simpsons and Modern Family, has previously pledged to continue broadcasting news under the Sky News banner for at least five years - and with at least the same budget as at present - should its takeover of Sky go ahead.

But he said the threat was a risky move by Sky: "Inevitably this will be perceived by those who are already hostile to the proposed takeover, particularly in the political arena, as sabre rattling and as a perceived threat by the company".

The bank also said in the event that a Fox/Sky deal was blocked, based on the CNBC article, Disney could be a potential strategic bidder for Sky and it noted it would not have the cross-media complications of a Fox bid.

He added: "The interesting thing is: can Sky survive happily without Fox?"

Odey's comments come after CNBC said that Disney recently discussed buying Fox's movie and TV production studio studios, cable networks FX and National Geographic and global assets such as the Star network in India and its stake in Sky.

One of the major strands of the CMA's investigation is whether a takeover of Sky would affect media plurality in Britain in view of the fact that both Fox and News Corporation (Frankfurt: A1W048 - news), the owner of United Kingdom newspaper titles including The Sun, The Times and the Sunday Times, are 39% owned by the family trust of Rupert Murdoch.

The Murdoch family owns controlling stakes in both News Corporation, which owns United Kingdom newspapers such as the Sun and the Times, as well as Fox, which operates in film and TV.

Fox's bid for full control of Sky has been beset by a series of obstacles, including the CMA investigation and opposition from some politicians.



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