Photographer: Simon Dawson/Bloomberg

Ghosts of Murdoch’s Past Sky Bid Haunt Theresa May’s Young Team

Updated on
  • Furor over News Corp.’s previous attempt cost official’s job
  • Culture Secretary Bradley staying silent to avert new spat

U.K. Prime Minister Theresa May’s government, barely five months old and absorbed with navigating Brexit, now faces another explosive decision: whether to call on regulators to scrutinize the proposed buyout of Sky Plc by Rupert Murdoch’s 21st Century Fox Inc.

Senior officials remember the dramatic ramifications the last time Murdoch’s News Corp. made a bid for Sky six years ago. One minister was stripped of his role overseeing media deals, while another almost lost his job, only surviving after his closest aide took the hit and resigned.

Rupert Murdoch

Photographer: Cameron Spencer/Getty Images

The common thread running through the process was individuals in high office talking out of turn. This time, May’s team is determined not to make the same mistake. Fox, the company housing Murdoch’s television empire, reached a preliminary deal on Dec. 9 to acquire full control of Sky for 11.2 billion pounds ($14.1 billion).

At the center of the coming storm is Karen Bradley, the culture secretary. One of the least experienced members of the U.K. cabinet, 46-year-old Bradley had not served in the top flight until May took office in July and promoted her from a junior role as a minister for crime prevention.

Now Bradley has the task of deciding whether to ask regulators if the deal raises public-interest concerns. In so doing, she is required to act in what is known as a “quasi-judicial” capacity, putting aside all political considerations to focus strictly and independently on the matter at hand.

An early test of her department’s resolve came in the House of Commons in London on Monday afternoon, where Bradley’s deputy, Media Minister Matt Hancock, was careful not to reveal her position as he answered lawmakers’ questions on the proposed deal. She has yet to receive formal notification and will respond within 10 days of receiving it, he said.

“This is quite early in the process and all things that are appropriate to be considered will be considered,” Hancock said. “Procedures are being put in place to ensure there are no conflicts of interest, and the decision will be taken appropriately.”

Ed Miliband, who was leader of the opposition Labour Party when a proposed takeover was last considered by lawmakers, said the deal should not be allowed to go ahead because of the continuing shadow of the phone-hacking scandal that soured it last time.

“We still have cases of phone-hacking unresolved,” Miliband told lawmakers. “What has really changed since this house passed a motion five years ago? I believe very little.”

Botched Job

It was a failure to adhere to the required level of regulatory independence that caused so much damage to the government David Cameron ran after News Corp.’s previous bid for Sky. Indeed, the decision would not be Bradley’s at all if Cameron’s Conservative-Liberal Democrat coalition hadn’t botched its role last time around.

In December 2010, Vince Cable, the business secretary in the coalition, was secretly recorded by undercover reporters boasting that he had declared “war” on Murdoch and was minded to stop the News Corp. takeover of Sky. Cameron’s office immediately took responsibility for media deals away from Cable’s business ministry and gave it to the Department for Culture, Media and Sport, which was run at the time by Jeremy Hunt.

Yet for Hunt too, his new responsibility proved a poisoned chalice, at a time when journalists working for Murdoch’s newspapers division were embroiled in the phone hacking scandal.

‘Too Close’

In April 2012, Hunt’s most senior aide, Adam Smith, quit after a series of messages emerged between him and News Corp. lobbyist Frederic Michel. Explaining his decision to resign, Smith said the extent of his contact with Michel had created the impression that News Corp. had “too close a relationship” with his department. He insisted he had acted without Hunt’s authorization, and his resignation saved his boss’s job.

Officials now working for Bradley in the same department are determined to ensure the crises of the past are not repeated. Bradley is also likely to be kept out of any internal conversations relating to the deal within government, to ensure she can remain strictly impartial.

“The way Theresa May’s government deals with this is a test of their independence from the influence of large proprietors,” Cable said on Friday. “This poses a genuine threat to media plurality in the U.K., just as the bid six years ago did.”

Bradley’s predecessor as culture secretary, John Whittingdale, also suggested regulators would need to weigh the “serious issues” of media plurality that the proposed deal raises. One person familiar with the matter said the deal might face a similar level of opposition in Parliament, pointing to May’s slim working majority of 14. The chamber, though, was relatively empty on Monday for Hancock’s appearance.

On Tuesday, Bradley’s approach may face a more critical examination: she will be called to give personal testimony to a committee on communications policy in Parliament’s upper house.

For her part, the premier is expected to let her subordinates handle the review of the Fox-Sky offer to avoid getting directly involved in any potential public backlash around the deal, according to a person involved in the takeover talks. One consideration for May is that she hopes to encourage more foreign investment into the U.K. after the Brexit vote. A political row over a multibillion-pound business deal is the last thing that she needs.