Sky Responds To Update Published By CMA On 21st Century Remedy Proposal

(RTTNews) - British satellite television network Sky Plc (BSY.L, SKY.L) noted the publication today by the Competition and Markets Authority or CMA of two alternative remedy proposals submitted by Twenty-First Century Fox, Inc. (FOX, FOXA) to the CMA, specifically a legal separation and comprehensive ringfencing of Sky News; or a divestiture of Sky News to The Walt Disney Company envisaged to occur only after completion of 21CF's acquisition of Sky.

Sky said it believed that both of these remedy proposals comprehensively address any plurality concerns the CMA may have, and would guarantee the long-term future of Sky News and its ongoing editorial independence.

Sky said, as the regulatory process remains ongoing, shareholders are advised to take no action at this stage.

Separately, Twenty-First Century Fox said that it has worked diligently with the CMA throughout its extensive review. In fact, it believes that the enhanced firewall remedies it proposed to safeguard the editorial independence of Sky News addressed comprehensively and constructively the CMA's provisional concerns. These enhanced remedies went above and beyond what Ofcom, the expert, independent regulator on UK broadcasting, had stated would mitigate concerns around media plurality.

Twenty-First Century Fox said, "We are aware that a group of politicians that is opposed to the transaction is seeking to influence the CMA and is making a number of unsupported and fanciful assertions. If the CMA were to accept at face value these assertions and be dissatisfied with enhanced remedies that are a direct and reasonable response to concerns it had raised with us, we believe that this would compromise the integrity of a system which is supposed to be objective, evidenced-based and grounded on the application of established legal principles."

Twenty-First Century noted that it has now submitted a new, revised set of remedies should they be considered necessary by the CMA and ultimately by the Secretary of State for Digital, Culture, Media and Sport.

Twenty-First Century Fox proposed new ring-fencing remedies which would effect the legal separation between Sky News and the rest of Sky, establishing Sky News as a distinct company within the Sky Group, with its own fully independent board and under the management control of the Head of Sky News. Under this proposal, Sky News would operate entirely independently with guaranteed funding by 21CF for 15 years.

Additionally, Twenty-First Century Fox offered personal undertakings given by Twenty-First Century Fox's Executive Chairmen and its chief executive officer not to influence or attempt to influence the editorial choices made by the Head of Sky News. Twenty-First Century offered this even though the record before the CMA shows that, over the course of nearly 30 years as Sky's founding shareholder, neither Twenty-First Century, nor the Murdoch Family Trust, have ever sought to influence the editorial direction of Sky News.

Alternatively, The Walt Disney Company has expressed an interest in acquiring Sky News, with a view to adding it to Disney's existing portfolio of television channels, whether or not Disney's proposed acquisition of Twenty-First Century proceeds.

Twenty-First Century stated that it remain committed to working with the CMA to find remedies that will ensure the continued editorial independence of Sky News. It 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 legal options if necessary.

Twenty-First Century retain a 39% stake in Sky and, subject to ultimately obtaining regulatory approval, remain focused on acquiring the remaining 61% of Sky.