Walt Disney (DIS) has bid to purchase Sky News in order to ease regulatory affairs in the U.K. over 21st Century Fox’s (FOXA) proposed buyout of Sky plc. There are concerns that allowing the Rupert Murdoch-owned company to acquire a 61% share in Sky would give the Murdoch family more authority over the British news media.
Fox’s acquisition of Sky is being reviewed by the Competition and Markets Authority (CMA) in the U.K. and it has been criticized by many politicians who have asked for the deal to be blocked.
Disney said it is interested in buying Sky News irrespective of its success in acquiring Fox. The media giant, however, hopes this deal will help Fox acquire Sky thereby facilitating Disney’s purchase of Fox’s assets, which will include Sky. Disney has also promised to maintain the editorial freedom of Sky News if it succeeds in buying it.
Murdoch suggested either a sale of Sky News or its establishment as a separate entity within the Sky family while agreeing to fund Sky News for 15 years. Sky, on the other hand, is willing to shut down Sky News if Fox fails to get the nod from regulators. The shutting down of Sky News would have a negative impact on the UK news media with regards to pluralism.
The repeated delay in approving the deal by U.K. regulators led to Comcast Corp. (CMCSA) planning a higher bid for Sky. Disney is looking to thwart Comcast’s efforts in picking up Sky. A final decision on Fox’s proposal for Sky is expected by the middle of June. Sky’s stock climbed more than 1% during morning hours in London, while Disney was flat when the U.S. market opened today.