21st Century Fox proposes Sky News sale to Disney

Twenty-First Century Fox has proposed selling Sky News to Disney on completion of its buyout of Sky, in an effort to secure UK regulatory approval for the Sky deal.

The suggestion is one of two ‘alternative remedy proposals’ submitted to the UK’s Competition and Markets Authority (CMA), with the second being a legal separation and ringfencing of Sky News.

21^st Century Fox said that Disney has expressed an interest in acquiring Sky News and adding it to its portfolio of channels, a move that would not rely on Disney’s completion of its planned acquisition of 21^st Century Fox’s TV and film assets.

The other option tabled to the CMA would see 21^st Century Fox set up Newco as a new Sky subsidiary after its completion of the Sky takeover. Sky News would be transferred to this new company, which would have its own management and independent board.

This ringfencing option would see Sky News operate independently with guaranteed funding from 21^st Century Fox for a period of 15 years.

Sky said in a statement issued this morning that it believes both proposals “comprehensively address any plurality concerns the CMA may have” and would guarantee Sky News’ future and editorial independence.

The proposals come after the CMA provisionally blocked 21^st Century Fox’s takeover of Sky in January, citing concerns that the Murdoch family, which owns controlling stakes in both companies, would own too much of the UK media market.

The CMA noted at the time that the Murdoch Family Trust’s news outlets – which also include newspapers like The Times and The Sun – are watched, read or heard by nearly a third of the UK’s population, giving it “a combined share of the public’s news consumption that is significantly greater than all other news providers, except the BBC and ITN”.

The latest set of proposals to the CMA come after 21^st Century Fox promised in February a fully-independent board for Sky News and insulation of the service from possible editorial interference from the Murdoch family.

Days earlier Fox said in its latest quarterly earnings statement that it expects its acquisition of the UK-based pay TV outfit to secure regulatory approval by the end of June.

However, since then US cable giant Comcast has made its own £22.1 billion (€25.0 billion) offer for Sky, marking a 16% increase on 21st Century Fox’s agreed takeover price for the company. Comcast CEO Brian Roberts described Sky as an “outstanding company” and said Comcast intends to use Sky as a “platform for growth in Europe”.

21st Century Fox and Sky initially agreed terms of a takeover a deal that valued the pay TV operator at £18.5 billion (€22 billion) back in December 2016. 21st Century Fox agreed to pay £11.7 billion for the 61% it does not already own of Sky.

Separate to this, in December 2017, Disney agreed a US$66 billion deal that will hand it most of 21st Century Fox’s TV and film assets, including its 39% stake in Sky. This is still subject to regulatory approvals.