British culture minister Matt Hancock opened the door on Tuesday for Rupert Murdoch’s 21st Century Fox to buy full control of the Sky PLC satellite-TV service for $26.5 billion — ending about 18 months of regulatory uncertainty.
But it’s not a done deal.
Sky must first divest itself of Sky News to curb Murdoch’s pervasive influence in the U.K. journalism world through his News Corp., which owns the Times and Sun newspapers.
And the Sky board also must consider a competing $31 billion for its television service from Comcast Corp., which would like to rip Sky out of Murdoch’s hands.
The Sky deal is one part of a complex global bid for Fox entertainment and international assets between Comcast and the Walt Disney Co. that could radically reshape the legacy media and entertainment industries.
Comcast CEO Brian Roberts and Disney CEO Bob Iger each wants to grab the Fox entertainment assets to gain scale and compete with the popular Netflix, which streams movies and more entertainment over the internet. Sky has 22.5 million subscribers in the U.K., Ireland, Italy, Germany, and Austria, along with 31,000 employees.
Comcast had no comment on Tuesday. But Hancock’s decision slightly improves the Philadelphia company’s chances of beating out Fox for Sky because of the added regulatory hurdle of selling Sky News. Hancock, a conservative U.K. minister for culture, media, and sport, has said previously that it was OK for Comcast to buy Sky but without any stipulation of selling Sky News.
Comcast said in April, as part of its offer for Sky News, that it would not purchase a U.K. newspaper for five years. It would maintain Sky News’ budget for 10 years, and establish a board to ensure Sky News editorial independence.
Meanwhile, Fox said in a statement Tuesday that “we are confident that we will reach a final decision clearing our transaction” for Sky. Fox already owns 39 percent of Sky but would like to own it outright.
Fox proposed buying the 61 percent of Sky it did not already own in December 2016, but the deal was held up by regulatory concerns.
Disney has said it would acquire Sky News if U.K. regulators required its divestiture.
The Labour deputy leader, Tom Watson, said in the Guardian newspaper on Tuesday that Sky News has “always been a beacon for independent and rigorous journalism” and said his priority would be “ensuring Sky News thrives going forward.”
Watson warned that if Sky News is sold to Disney, the 24-hour news channel would be “isolated from Sky and owned by a foreign company with few news interests in the U.K.”
The same could be said if Comcast buys Sky News.