UK regulator looks to block Murdoch takeover of Sky TV

United Kingdom (U.K.) regulators are recommending that the government block 21st Century Fox from taking over Sky TV, dealing a major blow to billionaire Rupert Murdoch’s media empire.

The Competition and Markets Authority (CMA) announced Tuesday that it found the $15.4 billion bid to be “not in the public interest” because it would give the Murdoch family trust “too much control” over news and public opinion in the U.K., according to a statement from the agency.

“Due to its control of News Corp, the Murdoch family already has significant influence over public opinion and full ownership of Sky by Fox would strengthen this even further,” the watchdog said in the release, adding that Murdoch’s outlets are “watched, read or heard by nearly a third of the UK’s population.”

The Murdoch family’s News Corp owns British newspapers The Sun, The Times and The Sunday Times, as well as several radio networks.

“Media plurality goes to the heart of our democratic process,” said investigation chair Anne Lambert. “It is very important that no group or individual should have too much control of our news media or too much power to affect the political agenda.”

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21st Century Fox owns 39 percent of Sky, which it is selling to Disney as part of a major $52.4 billion deal. Disney is buying much of Fox’s entertainment assets.

If the government accepts the CMA’s recommendation and blocks Fox from purchasing a controlling stake, Disney will have to decide whether to pursue full control of Sky.

In November, Sky threatened to shut down Sky News if it was determined to be a deterrent to the takeover bid.

The CMA will make a final recommendation to the U.K.’s secretary of state for digital, culture, media and sport, who will make the final decision on the deal, by May 1.

The agency’s investigation into the potential takeover did not find reason for concern about the deal affecting broadcasting standards in the country. Sky and Fox were both found to have “effective policies and procedures in place to ensure broadcasting standards are met.”

The CMA noted that it took into consideration allegations of sexual harassment against Fox News employees. The regulator said that while serious, the allegations do not affect the company’s commitment to broadcasting standards.

21st Century Fox said in a statement that they are “disappointed” by the findings but will continue to engage with the agency ahead of its final recommendation to the culture and media secretary.

“We welcome the CMA’s provisional finding that the Company has a genuine commitment to broadcasting standards and the transaction would not be against the public interest in this respect,” the company said in a statement. “Regarding plurality, we are disappointed by the CMA’s provisional findings.”

This story was updated at 9:56 a.m.