LONDON - Britain's government stalled Twenty-First Century Fox's (FOXA) takeover bid of the Sky pay TV and broadband network Thursday after media regulators expressed concern about the influence of Rupert Murdoch and his family.
Culture Secretary Karen Bradley told the House of Commons that the takeover "potentially raises public interest concerns," and referred the matter to the Competition and Markets Authority for further review.
"The transaction may increase members of the Murdoch Family Trust's ability to influence the overall news agenda and their ability to influence the political process, and it may also result in the perception of increased influence," Bradley said in her explanation for the decision.
Critics have charged that the 11.7 billion pound ($15.2 billion) deal would give Murdoch too much power in U.K. media. Murdoch's company already owns two of the country's biggest newspapers, The Sun and The Times.
Murdoch's media group is trying to buy the 61 percent of Sky it doesn't already own, giving Twenty-First Century Fox easy access to Sky's 22 million customers in the U.K., Ireland, Austria, Germany and Italy.
Ofcom, the communications regulator, last week submitted a report to Bradley on the deal's implications for media competition and Sky's compliance with broadcasting standards. A separate report looked at whether Twenty-First Century Fox is "fit and proper" to hold a broadcasting license.
Women who allege they were sexually harassed at U.S.-based Fox News also say the takeover should be blocked.
But Ofcom was not persuaded. In its report Ofcom said it had "we have no clear evidence that senior executives at Fox were aware of misconduct before it was escalated to them in July 2016, after which action was taken."
An earlier attempt to buy Sky was thwarted by the 2011 phone-hacking scandal that rocked Murdoch's British newspapers and led to the closure of the 168-year-old News of the World tabloid. A campaign group challenging the merger, Avaaz, compared the sexual harassment scandal at Fox to phone hacking, in which journalists were alleged to have illegally tapped into the phones of public officials, crime victims and members of the royal family.
"This emerging scandal, and the denials and obstruction by senior people at Fox, are analogous to the industrial-scale phone hacking in the U.K.," Avaaz campaign director Meredith Alexander said in a press release. Murdoch "is directly implicated in this, as he has been acting as CEO at Fox News since former CEO Roger Ailes was ousted in July 2016."
Sky reported operating profit of 1.6 billion pounds ($2.1 billion) for the year ended June 30, 2016, on revenue of 12 billion pounds. The company offers more than 600 pay TV channels, which include programming such as Premier League soccer, news and the popular U.S. series "Game of Thrones," which attracted an average of more than 6.5 million viewers per episode