21st Century Fox submitted a proposal to the UK's competition authority Tuesday to sell Sky News to The Walt Disney Company if it would help ease regulators' concerns over media plurality.
Why it matters: Fox currently owns 39% of Sky and is looking to acquire majority ownership to give its potential new owner, Disney, an opportunity to reach an international audience with its broadcast and streaming rights.
- Among the proposed remedies Fox laid out was separating Sky News from Sky as a whole and establishing it as an independent company with its own board.
- The case has been under review for months as UK regulators assess whether ownership by the Murdoch family would have any plurality concerns, since they already own so many media assets in the UK.
"We remain committed to working with the CMA to find remedies that will ensure the continued editorial independence of Sky News," 21st Century Fox says in a statement obtained by Axios. "We will continue to work with the regulator, and then the Secretary of State at the appropriate time, and leave open the possibility to pursue all of our legal options if necessary.
Back home, Fox is still working through merger options. While Fox executives have vocalized support for a Disney merger, there would be clear incentives for them to revisit a higher bid from Comcast, should a vertical merger be approved between AT&T and Time Warner.
- More money. With the Murdoch's trying to simultaneously build "New Fox," or a network that will comprise of the remaining sports and news assets leftover from the deal, more cash for distribution rights and to build their own network would be helpful.
- Higher likelihood of regulatory approval. Fox announced a Disney deal shortly after the Justice Department announced it would sue to block a merger between AT&T and Time Warner. It's likely executives pivoted towards a horizontal merger as a way to move forward with deal talks instead of being stalled by the outcome of the AT&T deal. Changes to the traditional media landscape are putting pressure on executives to get deals done quickly.
But Comcast clearly isn't risking coming out of this deal clean. Earlier this year, the U.S. telecom giant said it intends to place a rival bid to Fox's takeover of U.K.'s Sky News, in the event that they wouldn't gain international streaming assets through a Fox deal back home. Comcast could face some regulatory scrutiny as well.