Report: Murdoch Edging Towards Solution To Acquire Sky

Rupert Murdoch’s Fox is hoping the creation of an independent editorial board to protect the news channel at bid target Sky will satisfy regulators and allow it to finally take control of the European pay-TV group, reports Reuters.

Britain’s competition regulator told Twenty-First Century Fox last month that Murdoch’s near eight-year, $15.7 billion pursuit of Sky would be blocked unless a way is found to prevent the media mogul from influencing Sky News after a deal.

Fox had earlier offered to create an editorial board with a majority of independent directors. People familiar with the matter, lawyers and investors believe a stronger mechanism to guarantee independence should be enough to gain approval.

The takeover is being closely watched in the United States where Fox has agreed to sell most of its assets including Sky to Walt Disney Co, which wants to buy all of Sky in the deal and not just the 39 percent that Fox already owns.

As Britain’s biggest owner of national newspapers, every move by Murdoch is scrutinized by his political allies and enemies alike. Britain’s competition regulator worries that a deal to own all of Sky News would give him too much sway over public opinion.

Sky, Europe’s leading pay-TV provider in 23 million homes across Britain, Ireland, Austria, Germany and Italy, has kept up the pressure by warning it could close the loss-making but award-winning channel if it prevented a takeover.

Sky News launched in 1989 when Murdoch, having shaken up the newspaper market, sought to smash the dominance of the BBC and commercial network ITV by launching four channels as part of a new paid-for satellite service.

Murdoch has funded Sky News through nearly 30 years of losses. It has an average weekly reach of 4.4 million viewers, or average share of TV viewing of 0.56 percent, according to BARB ratings for the week ended Jan. 21. It reaches millions more through its online and radio output.

Were the government and regulator to decide that the proposal does not go far enough, they could insist that in order to complete the deal, Fox should spin off or sell Sky News. The regulator has also acknowledged that Sky could next year be owned by Disney, a business that doesn’t have any news outlets in Britain, meaning its concerns would lapse.