Comcast’s competing bid to acquire the European pay-TV giant Sky is the just the latest in a string of setbacks for Rupert Murdoch’s media empire.
Murdoch’s 21st Century Fox already owns a 39 percent stake in Sky, but the mogul has long desired full ownership of the company — including 24-hour news channel Sky News — a dream frequently met with resistance from regulators and impeded by outside scandal.
An existing 2016 bid from Fox to buy out the rest of the company for about $15 million was blown out of the water on Tuesday by a surprise $31 million offer from Comcast. But it’s not the first time Murdoch has faced opposition.
This isn’t Murdoch’s first attempt at a full takeover of Sky. Murdoch’s last bid to buy the company was withdrawn in 2011 when his company became embroiled in a phone hacking scandal involving a murdered teenager.
News of the World, a British newspaper owned by Murdoch’s News Corporation, was accused of hacking the phones of celebrities and British royals. It was later reported that reporters at the paper had accessed the voicemail of then-missing teenager Milly Dowler, resulting in a number of criminal investigations into the paper’s activities.
Eventually, Murdoch announced that the scandal-plagued paper would shut down after 168 years in print.
Following the shuttering of News of the World, News Corp said it would also withdraw its bid for Sky (then called BSkyB), saying that it had become “too difficult to progress [with the deal] in this climate.”
Sexual harassment and assault at Fox News
In 2016, Roger Ailes, the Chairman and CEO of Fox News, was ousted after multiple accusations of sexual harassment — including a lawsuit from former anchor Gretchen Carlson. A year later, the network’s biggest star, Bill O’Reilly, fell to similar charges when the New York Times reported that at least five women received as much as $13 million in sexual harassment settlements from either O’Reilly or the company.
A number of other prominent men at the Fox, including Sean Hannity, Fox Sports President Jamie Horowitz and Fox Business host Charles Payne faced similar accusations, raising questions about a systemic sexual harassment problem at the company.
Fox News Co-President Bill Shine was forced out in 2017, but Fox continued to take heat from those who said the company didn’t do enough to address the crisis, especially after the United States attorney’s office in Manhattan launched an investigation into how the complaints were handled.
Another bid to takeover Sky questioned by regulators
Five years after withdrawing a bid to takeover the remaining 61 percent of Sky, Murdoch made another offer in late 2016.
That deal has faced its own regulatory hurdles, with British authorities releasing a preliminary report in January saying it would not be “in the public interest” for the company to acquire Sky News and that such an acquisition presented “plurality concerns.”
Fox said in a statement at the time that it was “disappointed” by the report, but would await final word from Britain’s culture minister, Matt Hancock, who is expected to make a final decision on whether the deal will be allowed to proceed by May 1.
Disney acquires Fox
Last December, The Walt Disney Company announced that it had reached a $52.4 billion deal to acquire the majority of 21st Century Fox assets — including its film and TV studios; regional sports networks; cable networks such as FX, FXX and Nat Geo; and the company’s existing stake in Sky.
The Murdoch family’s significantly diminished “new Fox” will retain ownership of the Fox Broadcasting network — to comply with FCC regulations saying no one company can own more than one of the so-called “Big Four” broadcast networks — as well as 28 owned-and-operated U.S. TV stations, Fox News Channel, Fox Business Network, FS1, FS2 and Big Ten Network.
Comcast makes a competing offer
Comcast’s $31 million offer for Sky marks a 16 percent premium above the existing bid from Fox, attempting to gain its own foothold in Europe.
“We think Sky is an outstanding company,” said Brian L. Roberts, Chairman and CEO of Comcast Corporation, in a release issued in the early hours of Tuesday. “It has 23 million customers and leading positions in the UK, Italy, and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team.”
Fox, for its part, released a statement on Tuesday saying it “remained committed” to its existing bid.
According to Alex De Groote, a media analyst with Cenkos Securities in London, Comcast’s competing offer, should it win out, would mark a diminished footprint for Fox and Murdoch, but closing the deal to sell to Disney remains Murdoch’s focus.
“It would only be a blow if Disney withdrew from Fox bidding, and focused solely on Sky,” De Groote said. “But I cannot see that happening. Murdoch will realize more value from Sky now than they could have anticipated. So they will become minority shareholders in Disney, and probably monetize their Sky holding.”
“This – Sky – has been a 30 year project for Murdoch,” he continued. “They will still own Fox, and News Corp (mainly newspapers). So their influence will be diminished, but still material. Ultimately, 21C Fox does not have the scale to compete, hence the decision to sell.”