The chief executive of Sky has cast further doubt on the future of Sky News, saying the service is no longer critical to the pay-TV broadcaster.
The future of Sky News potentially hangs in the balance after the UK regulator said on Tuesday that Rupert Murdoch’s ownership of the news service could block his £11.7bn bid for Sky because it would give him too much control over UK news media.
The deal would see the Murdoch family control the Times, Sunday Times, Sun, Wall Street Journal and Sky News, a situation the Competition & Markets Authority (CMA) said would give them “too much influence over public opinion and the political agenda”.
Jeremy Darroch, the chief executive of Sky, told analysts on Thursday that the loss-making Sky News was not as important as it was when the company launched in the 1990s and was no longer a “critical” part of the pay-TV broadcaster’s business.
“Sky News is a great service. It’s very highly valued,” he told analysts following publication of Sky’s latest financial results. “It was more important in the overall mix of the company when we were launching, in the early days. It had a lot of brand presence. It was an area we could build in. I wouldn’t describe Sky News as critical to the business today. Indeed I wouldn’t really pick any part of our business as critical.”
Sky previously warned the CMA that it could close Sky News if 21st Century Fox were unable to gain regulatory clearance for the £11.7bn bid to buy the 61% of Sky it did not already own. Shutting Sky News would eliminate the media plurality issue at a stroke.
Darroch’s failure to give a guarantee on the future of Sky News, which employs about 500 people, follows a similar stance he took with journalists discussing Sky’s first-half results before the call with analysts.
Despite the fact that it was Sky that filed the submission to the CMA that threatened the future of Sky News, Darroch refused to comment. Instead he said the regulatory process was being “predominantly led” by 21st Century Fox.
“Generally the message for all of our business is that we have a day job to do and we have got to keep this business being successful whatever it does,” he said on the conference call. “We are not being distracted by any of that [regulatory process].”
The CMA has launched a consultation looking at three options to solve the public interest issues raised by Sky News: that the deal is blocked, that Sky News is spun off or sold or that Sky News is insulated from the influence of the Murdoch family trust. The latter option would involve creating what the CMA refers to as a “firewall” such as a truly independent board of directors and guaranteed funding for at least five years.
The CMA also raised the possibility that the Murdochs could sell Sky News to Disney separately before its $66bn deal to buy most of 21st Century Fox, which would clear regulatory issues.
Earlier this week, the SNP MP Brendan O’Hara accused Sky of using its news staff as “pawns in the takeover” to try to coerce the competition regulator and the culture secretary, Matt Hancock, into clearing the deal.
“The greatest disaster that could befall plurality of media in this country would be if Sky News … were to be closed by its new owner,” said John Whittingdale, a former culture secretary, in the House of Commons on Tuesday.
The broadcasting regulator Ofcom has previously said the loss of Sky News could “present risks to plurality equal to or greater than those presented by the transaction itself”.
The CMA will consult on its provisional findings and potential remedies before delivering its final report to the government by a deadline of 1 May.