Should Murdoch's takeover of Sky be blocked?

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  • What does "blocked provisionally" mean? Could it mean that CMA would allow Murdoch to buy the rest of Sky and own all of it, provided he then sells the whole of Sky to Disney? It's a bit like a buyer paying the vendor of a leasehold property to buy that property from the freeholder/landlord, whereupon the buyer is then able to buy the vendor's property which is now freehold. That kind of deal (either to freehold or to extend a lease) is quite normal and lawyers can make it a binding contract between vendor and buyer, conditional on the lease being extended or enfranchised into freehold. In this case the binding contract is between the vendor (Murdoch), the owner(s) of the remaining Sky shares and the buyer (Disney). All money, offered shares and signed contracts would be held in escrow by the lawyers until the British government followed through on its undertaking to allow the sale and change of ownership. Getting the Government's "promise" is not enough, as Paul Reichmann found out to his cost when Margaret Thatcher did not keep her promise to provide transport infrastructure if he proceeded with Canary Wharf - for the first few years what he built ended up as an un-sellable no-man's land - one can easily imagine how much flakier and untrustworthy any such undertaking would be under the dead sleight-of-hand of Theresa May).

    I think Disney's reason for acquiring Sky would be fivefold:

    1) it's a prestigious asset.

    2) it's a nice earner

    3) Disney's ownership image and track-record would be less of a liability than Murdoch's when politicians start bitching about media plurality versus monopoly

    4) Sky is already big across Europe and that might serve Disney's ambitions

    5) Disney's intention to operate a streaming service to compete with Netflix could be within the aegis and resource of Sky. In the short-to-medium term, Sky-Disney would be catering to two markets (Sky-Plus as it is right now and Sky-Plus with streaming. Better to allow a degree of self-cannibalisation between these two Sky-Disney businesses than have a competitive streaming company do the devouring.

  • What does "blocked provisionally" mean?

    We'll get the final answer in May, at which time it'll probably be unblocked. It's all a load of nonsense now anyway.This deal will ultimately be decided by an American regulator, not a British one as part of the wider purchase of Murdoch's companies by Disney.

    As regards to your comments about the money being held in escrow, I'm sure Murdock or some other media company, was involved in a similar transaction before. The government "held" onto the shares until the final transaction went through.

    Not sure what you mean about Canary Wharf. I had a wander around the Isle of Dogs in 1991 just as the original buildings had been constructed and companies moving in. The DLR was built a few years prior to that and was working as were local buses. If you mean a proper tube system, then yes, that came much later with the Jubilee line and of course Crossrail is about to start, but there was transport infrastructure there to serve Canary Wharf, although I agree, beyond the initial estate, it was a total wasteland at the time.

    Now, back to Murdoch/Disney:

    5) Disney's intention to operate a streaming service to compete with Netflix could be within the aegis and resource of Sky. In the short-to-medium term, Sky-Disney would be catering to two markets (Sky-Plus as it is right now and Sky-Plus with streaming. Better to allow a degree of self-cannibalisation between these two Sky-Disney businesses than have a competitive streaming company do the devouring.

    Agree with all your points, but this is the most important one.

    Disney will launch its own streaming service and its better to get customers from Sky's existing satellite tv service than lose them to Netflix or Amazon.

  • Disney will launch its own streaming service and its better to get customers from Sky's existing satellite tv service than lose them to Netflix or Amazon.

    Thanks for the heads up on this topic. It's interesting. On the streaming side of things I was just thinking that if and when Disney acquires 100% of Sky, might it make sense for Disney to be positioned as an owner/partner brand with Sky (I mean enough consumers will know that anyway), in which case Disney could market its streaming service both within and outside the Sky operation. Thus, Disney adds a new element to Sky's repertoire, strengthening and modernising Sky which is, after all, now a Disney asset, while also selling its streaming operation independently of Sky - just different tariff packages - that's all I really meant

  • My understand is, based on what Disney currently say, is that they will launch their own branded service, so that if/when Disney take over Sky, the Disney branded service would be separate to Sky's and independent to theirs. But of course Disney don't own Sky yet, things may change when they do own them and they could launch a Disney branded service within Sky's ecosystem, or simply use Sky's branded service.

    If I were Disney, I would launch a Sky branded service throughout the world, as the name is short and catchy, but that's just me. The Disney brand should be only used for what it was originally intended for and that's children's/family entertainment.

  • If I were Disney, I would launch a Sky branded service throughout the world, as the name is short and catchy, but that's just me. The Disney brand should be only used for what it was originally intended for and that's children's/family entertainment.

    I couldn't agree more. A Disney-branded serious movie drama would be a classic case of cognitive dissonance. Moreover, I don't think Disney has ever seriously attempted to venture beyond children/family entertainment. They take their un-seriousness very seriously. If after acquisition Disney did decide to sprinkle its pixie dust over Sky, they could ruin their acquisition. So my notion of Disney using Sky to broaden its image beyond family/children is probably stupid and would prove to be, at best, an expensive hard slog, at worst, would fracture Sky's image.

  • Matt Hancock, the media secretary, has just essentially greenlighted the takeover, pending issues with the independence of Sky News.

    He is concerned that Murdoch will have too much influence over Sky News and wants further guarantees from Murdoch that Sky News will remain independent of Murdoch's and/or Disney's/Comcast's influence in the future and there is sufficient funding for the channel.

  • Big day for Sky today and yesterday. I'll talk about yesterday in the media mergers thread in a minute.

    The government, with a new secretary of state only appointed two days ago after the Boris Johnson/David Davis resignations, is expected to fully agree to the Murdoch takeover of Sky today.

  • The UK government has cleared a proposed deal for Rupert Murdoch's 21st Century Fox to buy Sky.

    The British broadcaster has been the subject of a fierce bidding war between Fox and US cable giant Comcast.

    Comcast's bid has already been cleared, and Culture Secretary Jeremy Wright said Fox can go ahead if it sells Sky News.

    Well, this decision brings this the subject of whether Murdoch should be allowed to control Sky to a end now and this thread with it.

    The new culture secretary has only been in his job a few days, but no doubt he still had a look over the bid before agreeing to this. If Murdoch were to keep Sky for himself, he's not, but he would've been required to sell Sky News as part the agreement with the government to gain full control of Sky. That is all irrelevant now anyway, as Sky will either be bought by Disney, Comcast or someone else. I don't know why the government has wasted all this time over this matter.

    What is 100% certain now is that Sky will be bought, by whom is unclear yet, but that's for the media mergers thread.

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