After the regulators say deal is against the public interest, what are Rupert Murdoch’s options?

What has happened to Rupert Murdoch’s bid to buy Sky?

The UK competition regulator investigating Rupert Murdoch’s £11.7bn bid has said the deal is against the public interest because it would give the Murdoch family “too much control over news providers in the UK, and too much influence over public opinion and the political agenda”. The deal, which would see Murdoch’s 21st Century Fox buy the 61% of Sky it does not already own, would add full control of Sky News to Murdoch assets which include the Sun, Times, Sunday Times and Wall Street Journal.

Does this mean the deal is dead?

No. The Competition and Markets Authority has launched a three-week consultation examining three options relating to Sky News that could allow the deal to go through. The nuclear option is to stop the deal. The second is a potential spin-off or sale of Sky News. The third is to keep Sky News as part of Sky but to beef up its independence to address concerns about Murdoch’s influence, such as an independent board and funding guarantee.

What are Murdoch’s options now?

Murdoch is in talks to sell most of 21st Century Fox, including its 39% Sky stake, to Disney. He could theoretically walk away from the Sky deal and wait for Disney, which has no UK news media plurality concerns, to take Sky News off his hands. However, that would leave Fox with a £200m bill for backing out, and there is no guarantee the Disney deal will get regulatory clearance to take over Fox. Murdoch is most likely to submit strengthened guarantees to the regulator to protect the independence of Sky News to gain deal approval.

Could Sky News be closed?

Sky has already threatened to review the future of Sky News if the takeover bid is ultimately blocked. This would immediately eliminate the media plurality issue. Such a move would be political dynamite – critics have already accused Murdoch of using Sky News and its staff as “pawns” to coerce regulators and the government. Closing Sky News would cause a major reduction in overall news plurality in the UK. Ofcom has said a loss of Sky News could “present risks to plurality equal to or greater than those presented by the transaction itself”.

Why was the deal cleared on broadcasting standards grounds?

The CMA was asked to look at issues including the sexual harassment scandal at Fox News US, alleged lax corporate governance, and phone hacking at Murdoch’s newspapers. The CMA said that of “central relevance” was Fox and Sky’s record of compliance with Ofcom’s broadcasting code. It said that phone hacking was “some time ago” and that a corporate governance overhaul at News UK has been successful. The regulator said that issues such as sexual harassment are “not directly related to the attainment of broadcasting standards, in the UK or elsewhere”.

Who makes the final decision?

The CMA has until 1 May to submit its final recommendation on the takeover to Matt Hancock, the new culture secretary. Hancock then has up to 30 working days – until mid-June – to make his decision on whether to allow the deal to go through. He does not have to abide by the CMA’s final decision.

If Disney’s deal for 21st Century Fox is cleared what happens to Sky News?

Bob Iger, Disney’s chief executive, has described Sky as a “crown jewel” asset in its proposed deal to takeover most of 21st Century Fox. However, the question remains about whether a company that owns Marvel, Pixar and Star Wars maker Lucasfilm is really interested in continuning to run a loss-making news operation.

Is that the end of the Murdoch’s near 30 year association with Sky?

Not quite. The deal with Disney will see the Murdoch family trust hold a stake of just under 5% in the enlarged company. This will make the Murdochs the second-largest shareholder in Disney although they do not, at this point, have any agreement for board representation.

What do the Murdochs own?

Through News Corp the Murdochs own assets including the Times, Sunday Times, Sun and TalkSport in the UK. News Corp also owns the New York Post, Dow Jones, the Wall Street Journal, Barrons and book publisher Harper Collins. In Australia, the Murdochs own more than a dozen outlets including The Daily Telegraph and The Australian, and operates Fox Sports and Foxtel. After the Disney deal, a separate company, New Fox, will be the home for the remaining 21st Century Fox assets including the Fox TV network, Fox News, Fox Business, Fox Sports and regional stations in the US.