US media behemoth Comcast successfully outbid competitors to acquire Sky (SKYB.L) for $40 billion, taking over more than 30 percent of the European corporation's shares worldwide.
Passing the 30 percent threshold will require Comcast to cap buyout shares at 17.28 pounds per share, capitalizing Sky at roughly £30.6 billion. However, Comcast shares fell Monday after investors voiced concerns about the buyout price, Reuters reported on Tuesday.
Australian media kingpin Rupert Murdoch, who owns 21st Century Fox, owns a 39 percent stake in Sky. However, Fox will sell those shares to Walt Disney due to a separate agreement.
Fox unsuccessfully bid for Sky with a 15.67 pound per share offer last weekend and conceded defeat to Comcast, who placed a "materially superior" bid, Sky's independent directors said. The takeover, one of Britain's largest acquisitions, raises eyebrows about US ownership of British media.
UK Media, By the Numbers
UK media watchdog Media Reform Coalition published a report in 2015 which stated six companies controlled 80 percent of local newspapers and 85 percent of revenues. Two companies-Rupert Murdoch's News Corp UK and Lord Rothermere's Daily Mail Group-control nearly 60 percent of British news circulations.
It noted that Sky News is "by far the biggest broadcaster," with Murdoch controlling 39 percent of the company.
Newly-appointed UK culture secretary Jeremy Wright approved in July Murdoch's bid for the remaining 61 percent of Sky shares, the Guardian reported. However, Murdoch lost to Comcast on Tuesday.
The report also highlights that US media giant Viacom International already owns Britain's Channel 5, with two companies controlling nearly 40 percent of commercial analog radio licenses and two-thirds of all commercial digital stations.
Justin Schlosberg, former Media Reform Coalition chairman and coordinating committee member, told Sputnik that the Comcast victory was "bittersweet", but assured that the media giant would not act within the British public's interest.
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"The Comcast acquisition will directly impact journalism broadcasts," he stated. "We challenged the 21 Century Fox merger and felt very strongly about the Murdoch family takeover. To the extent that this hasn't happened, it will end up in the hands of Comcast instead."
"It is a bittersweet win that Murdoch will not become a major player in UK news," he continued.
"We don't necessarily have faith that Comcast will deliver what we consider ‘journalism in the public interest'," Schlosberg stated, adding that Comcast was purely a ‘for-profit' media corporation which was not expected to carry the same high journalistic standards as public service broadcasters.
The Scope of US Presence in British Media
At the 2014 MacTaggart Film Festival, Channel 4 CEO David Abraham also cautioned against US mergers during his keynote speech. "This creativity risked being sacrificed for profit," he stated.
Read the stories, but not seen the speech? Catch up on David Abraham's MacTaggart lecture in full on our @YouTube: http://t.co/SrXJNHlAJj
— EdinburghTVFestival (@EdinburghTVFest) September 3, 2014
Abraham described the British media's rapid consolidation under US companies, citing All3Media's acquisition by Discovery and Liberty Global, who bought BSkyB's 6.4 percent stake in ITV.
US multinational Liberty Global, the world's largest international TV and broadband company, is headquartered in London and purchased Virgin Media for $23.3 billion in 2013.
Liberty Media Corporation, a Liberty Global subsidiary, also acquired European racing organization Formula 1 for $8 billion in September 2016, by buying the organization with an initial minority stake of 18.7 percent or $746 million, followed by 100 percent stake after the deal's completion.
British businessman Bernie Ecclestone chaired Formula One for 40 years, with Chase Carey of 21st Century Fox stepping in as company chairman. US billionaire John Malone claimed a minority stake in the company, the BBC reported in 2016.
Despite being hailed as one of the biggest deals in sports history, detractors criticized the move for taking away profits from the sport, which saw plummeting ratings in recent times. The new American owners should cater to a sport primarily enjoyed by Europeans, in addition to rising teams' costs and circuits, BBC sports editor Dan Roan said.
