UK confirms Murdoch's Sky bid will be examined over broadcasting standards

[September 14, 2017]  By Paul Sandle and Kate Holton

LONDON (Reuters) - Rupert Murdoch's Twenty-First Century Fox Inc will have to prove it can uphold broadcasting standards in Britain to secure its $15 billion takeover of broadcaster Sky following concerns over his Fox News operations.

Britain's Culture and Media Secretary Karen Bradley on Thursday referred the bid to the Competition and Markets Authority (CMA) for a 24-week review into Fox's commitment to broadcasting standards and the level of influence it will give Murdoch in the country.

Rupert Murdoch was for years courted by British politicians determined to win the backing of his Sun and Times newspapers, but that changed in 2011 when a criminal scandal at his News of the World tabloid revealed the extremely close ties he held with the top of government.

Prime Minister Theresa May's administration has taken a cautious approach to the deal, ignoring advice from media regulator Ofcom that it did not have concerns about broadcasting standards, and sending it to the competition regulator for the longest review possible.

Bradley had said on Tuesday she was "minded" to refer the planned purchase of the 69 percent of Sky it does not already own to look into corporate governance.

That surprise sent London-listed shares in Sky down 5 percent before they later recovered.

"Yesterday I received letters on behalf of both parties to the merger, confirming that while they disagree with my 'minded to' decision they would not be making substantive representations in relation to it," Bradley told parliament on Wednesday.

Tennis - US Open - Mens Final - New York, U.S. - September 10, 2017 - Rupert Murdoch, Chairman of Fox News Channel stands before Rafael Nadal of Spain plays against Kevin Anderson of South Africa. REUTERS/Mike Segar

Fox said it remained disappointed.

"We now look forward to engaging constructively with the CMA, as independent authority, and hope that the findings of this process will be respected by the Secretary of State," Fox said.

Murdoch's U.S. Fox News network has been rocked by a series of sexual harassment and discrimination lawsuits, leading to high profile resignations including former chief executive Roger Ailes and star anchor Bill O'Reilly.

The media mogul's critics have also pointed to the phone-hacking scandal involving journalists at his now-defunct News of the World tabloid which forced him to drop a previous attempt to buy Sky in 2011.

Bradley said the CMA would have 24 weeks to investigate the merger plans.

"I must then come to a final decision on whether or not the merger can proceed, including any conditions that will apply in order to do so," she said.

(Reporting by Michael Holden and Alistair Smout; editing by Jason Neely)

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