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Fox Says Sky Deal Won't Reduce Viewpoint Diversity

Provides UK regulators with self-deprecating defense of merger 11/08/2017 9:06 AM Eastern

21st Century Fox has responded to U.K. regulators with its defense of the Sky merger, telling them that it will not result in a loss of diversity of viewpoints, in part because after the deal there there will remain several more trusted viewpoints than either Sky News or some of News Corp.'s outlets.

Loss of viewpoint diversity is one of the key issues Ofcom's Competition & Markets Authority (CMA) is looking at in its six-month review of the proposed deal.

Fox had a Nov. 7 deadline for responding to CMA's theories of the potential harms of the deal, which it laid out when designating it for the full, six-month hearing.

In its filing, Fox pointed out that CMA said it could be particularly concerned where News Corp. and Sky News audiences overlap and don't get news from many other sources.

But Fox pointed out that in the most recent Ofcom news consumption survey, of the 2,862 respondents polled, only one consumed news from both Sky and News Corp. and no other source. "[That] suggests that, post-transaction,  almost everyone who consumes news from at least two sources now will still consume news from at least two entirely unconnected sources post-transaction," said Fox.

One Fox viewpoint that won't be available in the IK any longer is the U.S.-targeted Fox News Channel, which exited the market at the beginning of the month, only days before Ofom upheld a complaint against FNC broadcasts by Tucker Carlson and Sean Hannity.

Fox also made a rather self-deprecating, and Sky-deprecating, assertion in regard to another CMA concern about loss of diversity, which is consolidation of ownership of Sky News or one or more of News Corp.'s outlets with a "strong reputation for integrity and trustworthiness."

Fox suggested that CMA should take into account that some of News Corp.'s titles are less trustworthy than others in the markets, with the same going for Sky News.

"To the extent the CMA wishes to consider this [strong reputations for integrity and trustworthiness], it should do so in a balanced manner that also takes into account evidence indicating that readers of some of News Corp’s titles – the Sun and the Sun on Sunday – trust those titles less (reflecting the titles’ focus on lighter content such as celebrity gossip, rather than authoritative coverage of political issues, and the nature of the stories their readers choose to consume)," Fox told the regulator.

For example, it said, "on the day of the Brexit vote, the six most read news stories on the Sun’s website were soft news (on topics such as Glastonbury and Michael Jackson)."

Similarly, said Fox, CMA should also take into account evidence that other providers’ outlets may be even more trusted than Sky News.

"[T]here is evidence that multiple other outlets across media enjoy higher trust than Sky News, including the BBC, the Guardian and the Telegraph."

Although the deal got a clean bill of health from the European Commission in April, Ofcom's Competition & Markets Authority (CMA), is conducting a full review of the deal after Secretary of State for Digital, Culture, Media and Sport Karen Bradley said the deal might not be in the public interest because it did not have adequate public-interest compliance procedures in place for the broadcast of Fox News Channel in the U.K. -- an issue now moot with Fox's withdrawal of the channel from the market -- as well as the "Foxification" of Fox-owned outlets internationally.

Just this week, U.K. communications regulator Ofcom (of which CMA is a part) ruled that broadcasts of Fox News Chaannel's Hannity and Tucker Carlson Tonight were not fair and balanced, concluding they did not report the news impartially, in violation of Ofcom's broadcasting code. The decision came only days after Fox News Channel withdrew from the U.K. market.

In December 2016, 21st Century Fox agreed to pay $14.8 billion for the balance of the pay TV service it did not already own. Sky has 22 million subs in five countries -- Italy, Germany, Austria, the U.K. and Ireland.

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