The battle between Comcast and Fox for control of Sky has turned into not just an auction between rival bidders for Sky shares but also what Reuters calls ‘a regulatory race for approval’.
For more than a year Rupert Murdoch’s Fox has been working its way through the British regulatory process -Ofcom and the Competition and Markets Authority (CMA) – coming up with solutions to a problem which it believes does not actually exist, that the Murdoch Family Trust’s stakes in British broadcasting and newspapers would mean the Murdochs would hold too much media power in the UK. My own view on this blog has always been that regulatory approval would eventually be secured and Fox’s commitments to the future of Sky News would seem to have been the final pieces in that process.
However now Fox is faced with the possibility that Comcast, the owners of NBC and Universal, may make investors a higher offer for Sky shares and may not have to jump over as many regulatory hurdles as Fox has had to. As Comcast does not own any newspapers in the UK it is obvious that the issue of media plurality does not arise. But Fox wants regulators to put Comcast through the same scrutiny it has on issues such as commitment to broadcasting standards . It has been keen to draw the media’s attention to this .
On 4th March 2018 the Guardian ran an article headlined ‘Sky bidder Comcast labelled “worst company in America” . They reported that in recent years, ‘Comcast has been fined more than $2m (£1.5m) by US regulators and was forced to relocate a rival news service nearer to its news channels on its TV guide, while one of its leading TV presenters was involved in a sex scandal. In November, NBC News host Matt Lauer, one of the best-paid TV presenters in the US, was fired after a complaint from a colleague about inappropriate sexual behaviour’.
This past weekend (9th March 2018) Reuters ran an update on the takeover battle that included: ‘In Britain, Comcast has been involved in some minor breaches of broadcasting rules for airing offensive language, breaking impartiality and advertising rules, and it was sanctioned and fined in 2012 for broadcasting soft porn during the day on a channel that could be watched by children. Fox has called on regulators to examine all these issues’ .
Comparing bad behaviour at the top of their American operations, Comcast’s cable business has a bad record on mistreatment of customers resulting in a $2.3m fine after allegations it charged customers for items they didn’t order. But allegations of inappropriate sexual behaviour by one NBC presenter, even one as highly paid as Matt Lauer, does not compare in scale with the allegations made against former Fox News CEO Roger Ailes before he died last year plus the other lawsuits against the organisation.
Fox’s best case in the UK is that Comcast has more regulatory breaches than they have. However Reuters quoted Howard Cartlidge, head of EU and Competition law at DWF, as saying that ‘a larger pattern of offences would need to be proved to force a longer EU investigation: “I don’t see there being significant regulatory hurdles.” Reuters also reported that competition lawyers say that the Comcast bid could gain clearance relatively fast process.
Given the UK regulatory focus on the future of Sky News it is worth comparing the commitments the rival bidders have made:
Fox has committed to maintain a ‘Sky branded news service for at least ten years and to maintain the funding. It has also promised a ‘Sky News Board’ of ‘Independent Export Board members’ chaired by one with ‘senior editorial/and or journalistic experience’.
Comcast’s current statement on the future of the channel doesn’t go so far: “Comcast recognizes that Sky News is an invaluable part of the UK news landscape and the Company intends to maintain Sky News’ existing brand and culture, as well as its strong track record for high-quality impartial news and adherence to broadcasting standards.”
Comcast’s ‘promise’ is weaker than Fox’s because there is no commitment on funding only on ‘brand and culture’. That may be because there is no regulatory requirement on it to sustain Sky News, the future of the channel only arises as an issue in the case of the Fox takeover because of media plurality concerns about the combination of Sky News and News Corp papers in the UK. It seems to me that Comcast could deliver on Sky News’ ‘brand and culture’ but operate the channel in a different way and at a lower cost than currently operated by Sky.
Which brings us to one other distinction between the rival bids. Having stopped Fox News’s transmissions to Europe, Fox currently doesn’t have a stake in a news channel in Europe other than Sky News. However Comcast does. In a little noticed deal last year Comcast’s NBC news division acquired a 25% stake in the European news network Euronews based in Lyon,France. NBC paid $30 million for the shares. The majority shareholder is an Egyptian businessman Naguib Sawiris ,who owns 53% and chairs the supervisory board .
Announcing the deal the Chairman of NBC News Andy Lack said: ‘We plan to marry the power of the NBC News brand and the talent of our people with a formidable news asset in Europe in order to create an international offering that will strengthen our news organization and change the landscape of international news. This new venture will be called Euronews NBC. In short: We believe we’ve found a unique international partner at a pivotal time in global news’.
So ‘In short’, if the Comcast purchase of Sky goes through it will have a stake in two rival European-based news channels. It is difficult to believe some consolidation won’t be considered.
One footnote on the CMA Fox-Sky process. During a CMA roundtable I raised the example of Sky News Australia and said it had ‘adopted the Fox model of the primetime commentary programme…where their version of Mr Hannity, Mr Paul Murray said of the Defence Minister, Mr Pyne, on 26 June, “This is the type of bloke who, to use the Aussie-ism, if you were on fire he wouldn’t piss on you. This is the bloke who, if he was at a social function and met you he’d be looking for someone more important than you. That’s the measure of this wanker”.
At a Media Society event I chaired at Westminster University last month a former executive of Sky News Australia pointed out that Paul Murray’s programme existed before News Corp took complete control of the channel. I have checked the schedules and Paul Murray’s programme was increased from one hour each weeknight to two hours when News Corp took control. Supporters of News Channel Australia have also pointed out that Mr Murray is equally rude to politicians whether they be conservatives such as Mr Pyne or Labour.
Update on footnote: Since the CMA roundtable one of the other participants, David Elstein has been in correspondence with me challenging what I said about Sky News Australia.
After this blog appeared David posted a comment (see comments section). He argues that I am wrong to link the extension of the Paul Murray programme to News Corp:
‘As Angelos Frangopoulos, the CEO of Sky News Australia since its inception, told me when I asked him about this, his top sports presenter was poached by Channel 9, and the obvious way to fill the gap was to extend Murray’s show, as it is the most successful programme on the satellite service that carries Sky News Australia: nothing to do with News Corp, just as all the other commentary material (including Paul Murray, on air since 2010) had nothing to do with News Corp. The CMA report covered this topic exhaustively!
My response to David is two fold:
- It is a fact that the extension of the Murray programme happened after News Corp took control. I never said that the decision was made by News Corp.
- The CMA studied the Sky News Australia schedules in great detail and concluded; Our analysis of the TV scheduling indicates that there has been an increase in the number of hours of opinion led programming/right-wing personalities broadcast on Sky News Australia since the acquisition. However, we note that News Corp’s analysis of their TV schedules shows suggests that the increase was more significant between 2015 and 2016, ie before the acquisition by News Corp. As discussed later, other evidence suggests that this change in strategy had already started to take place before the acquisition in December 2016.
I am happy to accept the CMA’s view on this.