Why is this deal so controversial?
If 21st Century Fox completes the takeover of Sky then Rupert Murdoch will bring together two of the most powerful broadcasters in the world. The US film and television studio already owns the rightwing cable network Fox News, and it will take control of Sky News as a result. A separate company that Murdoch runs, News Corp, also owns the Sun, the Times and the Sunday Times.
A takeover would in theory make for an increasingly powerful platform to potentially influence public and political opinion. Critics claim that Murdoch and his son James are not “fit and proper” owners of UK broadcasters because of scandals at the companies they run, including phone hacking at the News of the World and allegations of sexual harassment at Fox News in the US.
Some worry that Sky News, which is broadly neutral, could adopt some of Fox News’s tone. But defenders of the deal say UK broadcasting regulations, which require accurate and impartial coverage, would restrict that.
Last time Rupert Murdoch tried to buy Sky his bid failed because of the phone-hacking scandal. What’s different this time?
Rupert Murdoch withdrew a previous bid in 2011 when News Corp, which at the time owned both his newspapers and Fox, was embroiled in the News of the World phone-hacking scandal. Although the bidding company has changed, and a few years have passed, the subject has not completely gone away.
A new civil case scheduled for later this year involves allegations of phone hacking at the Sun, which the Murdochs have always denied. If the court concludes there was hacking at the Sun, this could affect Ofcom’s view on whether the Murdochs are “fit and proper” owners.
The Murdochs have attempted to distance the hacking scandal from 21st Century Fox and this deal by spinning his UK newspapers into a different business, but Rupert Murdoch heads both companies, and James Murdoch, who used to run his father’s newspapers in the UK, now works at 21st Century Fox as well as being chairman of Sky.
Why do the Murdochs think the deal should go ahead?
They say the media landscape has changed beyond recognition since their last bid for Sky and that media plurality is flourishing. This is due to the rise of Facebook, Google, Apple and online news outlets such as Buzzfeed at the same time as newspaper sales are declining.
The Murdochs also say the governance of their companies has been overhauled since the hacking scandal and Fox News is being shaken up in response to the sexual harassment allegations. The former chief executive Roger Ailes had left before his death recently, while the high profile presenter Bill O’Reilly is no longer employed by the broadcaster. Fox has pledged that it will continue to broadcast news under the Sky News name and maintain “its excellent record of compliance with the Ofcom broadcasting code”.
What would a takeover of Sky by 21st Century Fox mean for pay-TV subscribers?
The Murdochs already own 39% of Sky through 21st Century Fox. They are yet to reveal their plans for the company, but given James Murdoch’s position as chairman of 21st Century Fox and the premium they are paying for the existing share price it is fair to assume they do not think much is wrong with Sky. Industry sources expect 21st Century Fox to increase investment in digital services at Sky. But it is not obvious that consumers will see any immediate benefit in the form of cheaper prices or wider services: Sky subscribers can already watch Fox News and see movies from the Fox studio.
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