James Murdoch Says Fox Is "Confident" About Sky Deal Approval
The 21st Century Fox CEO spoke at the Royal Television Society's Cambridge convention, saying in Britain he is sometimes viewed as a "right-wing demon," while in the U.S. he is at times seen as a "raging" tree hugger.
21st Century Fox CEO James Murdoch on Thursday expressed optimism about the company's bid for full control of pay TV giant Sky amid an extended review process in the U.K.
Speaking at the Royal Television Society's Cambridge convention, he said the company was looking forward to working with the competition regulator, which will review the proposed deal over 24 weeks.
"Obviously, we were disappointed," he said about the U.K. culture secretary's decision to call for an in-depth review on two grounds instead of one. But he said the company now had a timetable for the review of the deal and was "confident that it goes through."
"I don't think now is the time" to discuss possible concessions, he said when asked if he was willing to give up Sky News or the like to seal a deal. He said Fox was glad to move the process along, saying "it was an unusually long phase 1 [review] process" already.
Scale is key as it allows for "big creative swings" and investments, Murdoch said, highlighting that the deal to take full ownership of Sky was part of that. Calling it a "transformative" deal, he said Fox was "eager" to provide Sky with more resources. If the U.K. is "truly open for business" post-Brexit, Fox is looking forward to the Sky deal going ahead, he said.
The British government had earlier on Thursday made it official that the conglomerate's bid for full control of pay TV giant Sky, in which it already owns a 39 percent stake, will get reviewed on two grounds.
U.K. culture secretary Karen Bradley confirmed her Tuesday plans to request from the Competition and Markets Authority (CMA) a more in-depth review of the deal's effects on competition, or media plurality, and broadcasting standards grounds, even though U.K. media regulator Ofcom had said it felt the latter wasn't warranted. The extended review is set to take 24 weeks.
Bradley said Thursday that her decision was now final after Fox and Sky said they would not challenge it or make "substantive representations."
Fox had said in a statement on Tuesday that it "has engaged with the regulatory process relating to this transaction since the outset and will continue to do so." It emphasized though: "We are surprised that after independent regulatory scrutiny and advice, and over four months to examine the case, the secretary of state is still unable to form an opinion. We urge the secretary of state to take a final decision quickly. We look forward to engaging with the CMA on their in-depth review as soon as possible."
The company also highlighted: "Ofcom, the expert independent regulator on U.K. broadcasting, undertook a robust and rigorous review of our commitment to the broadcast code, concluding 21st Century Fox and Sky have records of compliance consistent with other comparable license holders ... we do not believe that there are grounds for the secretary of state to change her previous position."
Fox in December agreed to buy the remaining roughly 61 percent stake in Sky for 11.7 billion pounds, which was worth about $14.5 billion at the time.
Earlier in the convention day, Ofcom CEO Sharon White gave a keynote interview. Bradley is set to speak at the Royal Television Society convention later on Thursday.
Fox late last month shuttered a Fox News U.K. feed that Sky had been carrying for about 15 years. "21st Century Fox has decided to cease providing a feed of Fox News Channel in the U.K.," the conglomerate said at the time. "Fox News is focused on the U.S. market and designed for a U.S. audience and, accordingly, it averages only a few thousand viewers across the day in the U.K." It concluded: "We have concluded that it is not in our commercial interest to continue providing Fox News in the U.K."
Murdoch said Thursday that Fox News is "entirely designed for the U.S.," and political polemic is popular in the U.S. "That's a very different competitive dynamic and different circumstances from here," he said.
Murdoch also talked about a lack of profits for Fox News in the U.K. "It [was] very expensive" from a cost perspective to air the network in the U.K., he said, adding it made "a pretty heavy loss."
Asked about his views on U.S. President Donald Trump, Murdoch told the Cambridge convention that "my politics are not an issue." And he signaled that he doesn't talk politics with father Rupert Murdoch.
He said that it was actually ironic that in the U.S. he is by some people seen as a "raging liberal, environmentalist tree hugger," while in the U.K. he is viewed as "the right-wing demon who is going to Foxify everything." He said that kind of mystery may be important though, saying "I kind of prefer it that way."
Murdoch in a speech before onstage questions called Fox a "global disruptor," saying that in the digital age that was an integral part of its success. Citing Fox's "zeal for change" and "restless taste for disruption," he said the company has long had a culture that is "more valuable and necessary by the day." After all, the conglomerate wants to play "a role in charting that future."
Asked about streaming video giants, Murdoch said: "When I look at our successful shows, we have creative partners. [Co-creator] Jim Brooks wouldn't have made the [financial] returns selling The Simpsons to Netflix or Amazon, because for a lot of creators that's where shows go to die."
Asked about the Fox News sexual harassment allegations, Murdoch said the company wanted to react loudly and clearly to send a message about behavioral expectations. He said the first time management heard about allegations against Roger Ailes was in a New York Times story. The decision to part ways with Ailes wasn't difficult as "what he did was wrong," he said. "Things will go wrong within a large organization," but managers must make clear that certain behavior is "intolerable," he emphasized.