Sky News Says It Could Shutter Without 21st Century Fox Buyout
Regulators "should not simply assume the continued provision of Sky News and its current contribution to plurality, absent the transaction," the news organization said.
Sky News could be shuttered if U.K. regulators do not approve 21st Century Fox's $15.3 billion deal for full control of European pay TV giant Sky, according to documents released Tuesday.
Sky told the Competition & Markets Authority (CMA), which has been reviewing the transaction, in October that it could shut down Sky News, watched by roughly 9 percent of the population in the U.K., should Fox not be allowed to purchase the portion of Sky it does not already own.
The CMA is looking at whether the deal would give Fox, which is controlled by Rupert Murdoch and his sons James and Lachlan, too much market power and hurt media plurality in Britain, as well as whether the company would have a "genuine commitment to broadcasting standards."
"The CMA should not simply assume the continued provision of Sky News and its current contribution to plurality, absent the transaction," Sky told regulators in October, according to documents made public Tuesday.
Fox had previously sought to avoid a CMA investigation by promising it would allow editorial independence at Sky News and that it would keep investing in the channel for at least five years should its deal to take control of Sky be approved.
Fox already owns 39 percent of Sky and critics are concerned its reach would be overly broad should it buy the entire entity. U.K. media regulator Ofcom, though, determined that even coupled with News Corp, which owns three British newspapers and is also controlled by the Murdochs, the powerful media family's assets would still be considered only the third-largest provider of news in the U.K.
While some interpret the warning from Sky as a strategy for leverage over regulators, others say it is simply an acknowledgment that Sky News isn't profitable enough to warrant further investment, and therefore could be shut down as a business decision without Fox's pledge to keep funneling it money.
Fox was not immediately available for comment.