The company 21st Century Fox Inc., led by Rupert Murdoch and his son James Murdoch, currently owns 39.1 percent of British broadcasting company Sky. Fox now wants to buy the remaining portion of Sky for $15 billion, which would make it Sky’s sole owner. Fox’s attempted takeover is highly controversial, with many people in Great Britain opposing the deal.
People are concerned about the amount of influence that the Murdochs already have over the British government and media. Other objections to the sale include the phone hacking scandal, which led to the demise of the nearly two-centuries-old News of the World, and the sexual and racial harassment allegations at Fox, which caused a major scandal in the United States, cost Roger Ailes and Bill O’Reilly their jobs, and ended with Fox paying a $90 million settlement to shareholders.
— Avaaz (@Avaaz) February 16, 2018
Despite the opposition from the public, Ofcom (Office of Communications), the U.K. authority that regulates the media, approved the sale, concluding in its report that Fox met the standard of being a “fit and proper” owner.
Ofcom’s report stated that the regulators had considered the sexual and racial harassment claims at Fox News and considered them “serious and disturbing.” However, the report also said that Ofcom hadn’t found any clear evidence that Fox’s leadership knew about the harassment.
Many people and organizations, including the online civic organization Avaaz, believe that the truth is the exact opposite, that Fox’s senior executives not only knew about the harassment but had taken actions to cover it up.
Avaaz Challenges Regulator’s Conclusion
Avaaz decided to challenge the conclusion of Ofcom’s report in court. The civic organization filed documents in the British High Court of Justice in September 2017, seeking judicial review of the report. In February 2018, the court ruled in Avaaz’s favor, with a judge granting permission for the case to be heard before the end of June 2018.
Avaaz wants Ofcom to reconsider its conclusion that the Murdochs would be fit owners of Sky. Avaaz thinks that Ofcom got the facts wrong when it considered the sexual and racial harassment that took place at Fox. Avaaz also believes that Ofcom applied too narrow a standard in determining fitness.
The CMA Opposes the Sale
In January 2018, the British Competition and Markets Authority CMA published preliminary findings that said Fox buying Sky would likely be against the public interest because it would cause too much of a concentration of media ownership. Fox already owns the British newspapers the Sun, the Times, and The Sunday Times, which are widely read in the UK.
The CMA is concerned that the Murdochs would gain too much power over British news media if it owned Sky, which, in turn, would give them too much sway over public opinion and government policy. Almost one-third of the people in the UK already read, watch, or hear news provided by Fox-owned entities. Only the BBC and ITN have a larger UK audience.
The CMA is now considering responses to its preliminary findings. It will present its final findings by May 1, 2018, to the UK Culture Secretary, who will make the final decision about whether the Fox-Sky deal can go through.
Trying to counter CMA’s concerns, Murdoch said that Fox would not interfere with Sky News’ editorial processes. He also offered to double, from five to 10 years, the amount of time that Fox would guarantee funding for Sky News.
News of the World Phone Hacking Scandals
One reason that Avaaz and much of the British public doesn’t want Fox to buy Sky is because of what happened with the phone hacking scandals, which shocked the UK. Reporters and editors at News of the World and other British newspapers owned by Rupert Murdoch were found to have violated people’s privacy by hacking into their phones and voicemail.
One of the most egregious acts was committed by a private investigator hired by News of the World reporters to hack into the voicemail of a missing teenager. The investigator deleted some of the messages, which led the girl’s parents to have the false hope that their daughter might still be alive. In fact, as they found out several months later, she had been murdered. The upshot of the phone hacking scandals was that Murdoch shut down the 168-year-old newspaper in July 2011.
Sexual and Racial Harassment at Fox
Another reason Avaaz opposes Fox gaining control of Sky is because of the sexual and racial harassment that occurred at Fox. Avaaz believes that the company is complicit because senior executives covered up the scandals. The cover-up shows that Fox does not share the UK values of promoting equality for women and minorities in the workplace. Fox should not be rewarded for its bad behavior with a lucrative deal, Avaaz says, and its values are not welcome in the UK.
The British broadcasting and communications company Sky is now the biggest entertainment company in Europe, with 22 million customers in the UK, Ireland, Austria, Germany, and Italy.
Fox and Disney
Complicating Fox’s potential purchase of Sky is Fox’s relationship with the Walt Disney Company. Fox and Disney made a deal, announced in December 2017, for Disney to acquire the film and broadcast divisions of Fox in 2018 or 2019.
What Will Happen Next
Avaaz’s legal challenge will be heard this spring. If the judicial review upholds Avaaz’s position, then Ofcom, the British regulator, will have to open its investigation again and revisit the issue of whether Fox would be a “fit and proper” owner of Sky. This could involve Ofcom considering the sexual and harassment allegation that were made at Fox after Ofcom published its report in June 2017.