Sky threatens to shut UK news channel if it hinders Fox bid
European pay TV giant Sky says it may shut down its British news operation if it is an impediment to 21st Century Fox's 11.7 billion ($15.4 billion) takeover offer, triggering claims the company is trying to blackmail regulators.
The statement came as Britain's competition regulator continues an investigation into whether Fox's bid for the 61 percent of Sky it doesn't already own would give Rupert Murdoch and his family too much control over the country's news media. Sky said shareholders may force it to reconsider the future of Sky News if it is a hurdle to regulatory approval of the deal.
"Sky would likely be prompted to review (the news operation) in the event that the continued provision of Sky News in its current form unduly impeded merger and/or other corporate opportunities available in relation to Sky's broader business," the company told the Competition and Markets Authority in a filing submitted Tuesday.
Opponents of the deal have expressed concern that it would give Murdoch too much control over Britain's news media because he already controls major newspapers including The Times and The Sun. Sky News provides extensive coverage of U.K. government and politics and is seen as a counterbalance to the BBC's dominant position in the market.
Ed Miliband, former leader of the Labour Party, was quick to criticize Sky's latest statement.
"New approach to Sky bid: 'If you don't do as we want, we may close down Sky News,' " he tweeted. "Trust CMA won't bow to blackmail."
Murdoch withdrew a previous bid for Sky in 2012 amid fallout from the phone-hacking scandal, in which journalists gained illegal access to the voicemails of celebrities. Those revelations rocked Murdoch's British newspaper arm and led him to close the 168-year-old News of the World.
Opponents say previous wrongdoing by Murdoch's newspapers, along with allegations of racial discrimination and sexual harassment at his U.S. TV network Fox News, show that the takeover is not in the public interest.
For investors, Sky News is just one piece of a much larger puzzle as traditional cable television companies try to compete with the challenge of streaming services such as Netflix and Amazon.
Sky, which broadcasts Premier League soccer and shows such as "Game of Thrones," is a European power with 22.5 million customers in the U.K., Ireland, Germany, Austria and Italy. But that is dwarfed by 21st Century Fox's 1.8 billion viewers spread across all six continents.
Sky's share price jumped more than 30 percent in December on news of 21st Century Fox's renewed bid for the company.