Murdochs Warn Against "Political Considerations" Clouding U.K. Sky Deal Review
"We have remained willing to work constructively with the regulatory authorities, and will continue to do so in the event of referral" to the competition authority for an extended review.
In a Friday letter signed by CEO James Murdoch and executive chairman Lachlan Murdoch, 21st Century Fox urged U.K. culture secretary Karen Bradley not to let politics affect her decisions about the regulatory review of the conglomerate's deal to take full control of European pay TV giant Sky.
Bradley had last month said she was "minded to" refer the deal for an in-depth review on competition, or plurality, grounds, which is expected to last about six months. She is expected to make her final decision on such a referral by Thursday as the British parliament then takes its summer break.
"In light of the transaction’s benefit to the U.K. and the implications for delay, we would urge you to continue to ensure that political considerations are not allowed to cloud the decision-making process," the Murdochs said in the letter published by Fox on Wednesday. It was sent by a deadline last week for comments on Bradley's announcement that she was planning to ask for an extended review of the deal.
The Murdochs also urged Bradley "to be mindful" of media regulator Ofcom's assessment that concessions offered by Fox "mitigate any issues that might have been present." Ofcom had also said the company could offer further concessions, with Bradley saying she was minded to not accept the current concessions.
And they said that they "were disappointed to learn from the June 29 announcement that you are minded to refer our proposed acquisition" to the Competition and Markets Authority for an extended review. However, they also emphasized: "We have remained willing to work constructively with the regulatory authorities, and will continue to do so in the event of referral to the CMA on plurality grounds."
The Murdochs put the Sky deal in the context of Brexit, suggesting that others would watch the government's approach to it as a sign for how business-friendly Britain was. "While we await the outcome of the regulatory process, important investment decisions will inevitably need to be deferred," they wrote. "There is also the broader risk of a potential harmful effect on other companies‘ inward investment decisions currently under consideration in the U.K. As one of the first, and the most significant investment to be proposed following last year’s referendum on exiting the EU, our proposed transaction will be carefully scrutinized by others keen to gauge the government’s commitment to creating a climate conducive to investment, or in the words of the Prime Minister and several of your fellow ministers, 'open for business'."
The Fox letter also highlighted the government's focus on further building out the creative sector. "We understand the growth of the creative sector to be consistent with the clear and welcome policy of the U.K. government, which identifies this industry as a core pillar of the U.K.’s industrial strategy," it said. "Inward investment, and the positive signal it sends to companies around the world, is more important than ever as the U.K. prepares to chart a course outside the EU."
The Murdoch also lauded Sky as "everything a great creative company should be: it is imbued with a culture that nurtures ingenuity and innovation, and it has worked diligently to become one of Europe’s great, trusted brands powered by a distinctive creative outlook."
And they added: "At this time in particular, we also believe Sky is a compelling statement of much that is great
about Britain. At nearly £12 billion, our further investment underscores our profound confidence in the future of the U.K. as a global hub for creativity and technological expertise."