Call it a Murdochian sleight of hand. On the face of it, the latest offers from 21st Century Fox to guarantee the independence of Sky News (thereby allowing Fox to buy the 61% of Sky plc it doesn’t own) look reassuring, especially as they are underwritten by a suggested offer from Disney to buy Sky News. Fox and the Murdochs are saying that they will ring-fence Sky News as a separate company completely and fund it for 15 years. If that isn’t enough, Disney will buy it (at a price to be agreed) and run it with its other cable channels around the globe. Easy peasy, Murdochian influence gone! But don’t be too hasty about that.
It is an elegant solution to a problem that would have almost certainly seen the Fox bid blocked completely by UK regulators because of well-held views about the Murdoch Family Trust’s undue influence in the UK (already controlling Fox, The Sun, The Times and Sunday Times, to go with potential Sky News ownership) especially in political and public discourse. But where the Murdochs’ shareholdings are concerned, it pays to look deeper and maintain your scepticism. Looking at the Sky News offers, you have to remember that the bigger deal is the Fox-Disney asset sale which is looking to cement the family’s global future and influence.
A statement from Fox, which included a proposal for the news operation to be established as an independent company with its own board, also included an important tidbit. Disney, it states, had “expressed an interest in acquiring Sky News, with a view to adding it to Disney’s existing portfolio of television channels”, whether or not acquisition actually proceeded.
The offer from Disney effectively underwrites the Fox bid for the remaining 61% of Sky, and could mean Fox can get away with paying much less than a higher offer from Comcast. Comcast said in February it plans to bid £22.1 billion (US$31 billion), or £12.50 a share for all of Sky, 16% above Fox’s offer of £10.75 a share (£11.7 billion for the portion it doesn’t own). Having Disney as the backstop to buy Sky News gives the Fox bid more chances of success and if the Disney-Fox deal happens it will also see Sky News reunited with the rest of the pay TV giant once Disney takes control.
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But will the latest offers from Fox regarding Sky News’ independence from the Murdochs really change anything? On the face of it, it looks like their influence on Sky News would decline, and possibly even vanish, if Disney were to proceed with the acquisition. But, more likely, it would simply be less obvious — possibly diluted, but no less present.
As Disney is paying for the assets with Disney shares, the Murdochs and other Fox shareholders would effectively become the largest group of Disney shareholders, with a combined 25%. In fact the Murdoch Family Trust would easily top the current largest individual holder: CEO and chair Bob Iger, who owns 1.06 million shares.
The Murdochs would be the dominant voice at Disney, and so could have the potential to still dominate Sky News. Neither Disney nor Sky have voting and non-voting shares, which Fox and News Corp do. If ever there is a move at Disney for a change, then you will know who really runs the show.