Sky’s Sellout to Fox is Penny Wise, Pound Foolish

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UPDATE: Murdoch’s Selective Memory

Feeling the political headwinds after announcing his plans to buyout Sky for $14.6 billion, the 85-year-old Rupert Murdoch; immediately published a letter in The Guardian to ensure the people of the UK that his intentions were well-placed.

He rejected claims that he once said: “When I go into Downing Street, they do what I say; when I go to Brussels, they take no notice.”

The Chairman of Twenty-First Century Fox went on to say, “there is much fake news published about me. Let me be clear that I have never uttered those words. I have made it a principle all my life never to ask for anything from any prime minister.”

Murdoch’s open letter came as a shock to many, but to former Prime Minister John Major, it was laughable.

On the Record and Under Oath

Only 20 years ago on the eve of the 1997 national elections, Murdoch demanded that Major change his policies on media and Europe.

Major told an inquiry board that, “it’s not very often someone sits in front of a prime minister and says, ‘I would like you to change your policy, and if you don’t change your policy, my organization cannot support you’.”

Andrew Neil, a former editor of the Murdoch-owned Sunday Times newspaper, told the same inquiry that Murdoch had used support for Tony Blair’s Labour government as a means of securing changes to media ownership rules which made his current bid for Sky possible.

“When Mr Murdoch testified before this inquiry that he had never asked government for anything it gave me cause to wonder if he had forgotten this – or forgotten he was testifying under oath,” Neil said.

Sky Takeover by Murdoch Triggers Political Test

The cash offer by Twenty-First Century Fox to acquire the remaining 61% of Sky will likely trigger a competition review by OFCOM and the European Commission.

China’s Hollywood enthusiasm is waning as credit markets tighten in the mainland and government concerns over trillions of unreported and unregulated loans.

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As reported earlier, Fox’s $14.4 billion offer for Sky comes at a time when the stock was fallen 30% since June. The British Pound has also fallen 14% against the dollar since the Brexit vote, which is further depressing the value of Sky.

This week the United Kingdom’s largest pension fund, LAPFF, called for an appropriate premium as well as safeguards to protect other minority shareholders. Murdoch currently owns 39% of Sky, and his son James is the Chairman.

The LAPFF said it wanted “safeguards for future probity given past track records of the businesses controlled by the Murdoch family.”