Fox could separate Sky News to satisfy United Kingdom regulator on takeover

Fox could separate Sky News to satisfy United Kingdom regulator on takeover

European pay TV giant Sky and its 39 percent owner 21st Century Fox have offered to sell the Sky News channel to Walt Disney if that would help address United Kingdom regulators' concerns about Sky News' independence from Fox.

United Kingdom regulators have expressed concerns that if Fox acquires Sky News, Fox chairman Rupert Murdoch will own several of the country's largest media outlets.

Under one option he is proposing that Sky News is legally separated and ringfenced so that it effectively operates separately.

Fox already owns 39 percent of the European pay-TV group and they are regularly facing competition for control of the business from Comcast (Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.).

New York-listed entertainment titan Fox has already bid £11.4-billion for the 61% of Sky it does not already own but in Britain concerns linger over the strengthening influence of Australian-born USA tycoon Murdoch.

The UK's competition authority, the CMA, on Tuesday issued a new set of proposals from 21st Century Fox, which has been trying for months to give assurances to the British authorities, anxious by the USA giant's hand on an important part of the information sector.

Sky News could be sold to Walt Disney Co (NYSE:DIS) or ringfenced under proposals by 21 Century Fox (NASDAQ:FOXA) as a way to gain regulatory approval for its takeover of Sky PLC (LON:SKY).

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Sky reacted to the latest remedies offered and said that it believes that both these offers ultimately address particular plurality concerns the CMA may have and would promise the upcoming future of Sky News and its ongoing editorial independence.

The proposed takeover is very controversial as critics have warned tit would leave too much media power in the hands of the Murdoch family - who already own The Times, The Sunday Times and The Sun. It added: "As the regulatory process remains ongoing, shareholders are advised to take no action at this stage".

Separately, Twenty-First Century Fox said that it has worked diligently with the CMA throughout its extensive review.

The CMA had also stated in January that its media plurality concerns would fall away on completion of Disney's Fox takeover.

Sky News could end up being sold to Disney before the rest of Sky. Disney also said it would "agree to sustain the operating capital of Sky News and maintain its editorial independence".

"More importantly, we think the news and today's comments from Sky point to a revised bid from Fox/Disney to trump Comcast's 1250p bid", the firm said.

But the proposal faces another challenge as United States broadcaster Comcast is mounting its own £22.1 billion takeover approach for Sky.

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