James Murdoch warns No 10 not to shun Fox's Sky bid in Brexit run-up

Graham Ruddick
James Murdoch said inward investment in the UK creative economy is important as Britain leaves the EU. Photograph: Bloomberg/Getty Images

James Murdoch has warned the government not to turn its back on 21st Century Fox’s bid for Sky as the UK prepares to leave the European Union, claiming Brexit makes it more important than ever that the country attracts investment.

Murdoch said he was looking forward to going through the regulatory process on the deal if the UK “truly is open for business”, and defended his track record as chief executive and chairman of Sky, saying that “has to count for something”.

The chief executive of Fox was speaking at the Royal Television Society convention in Cambridge on Thursday, two days after Karen Bradley, the culture secretary, confirmed the government was referring the proposed Fox-Sky deal to the Competition and Markets Authority on the grounds of media plurality and broadcasting standards, dealing a blow to the Murdoch family.

In comments that will be interpreted as a warning to the government, Murdoch said: “There is a huge opportunity for companies and countries willing to act decisively and capitalise on the economic and social benefit that this industry can create. Inward investment in the UK creative economy and the positive signal it sends to companies around the world is more important than ever as the UK prepares to chart its course outside the EU.

“Indeed, the soft power of the UK’s creative identity is going to be a big part of that story. So if the UK truly is open for business post-Brexit, we look forward to moving through the regulatory review process, and this transformational transaction for the UK creative sector becoming an affirmation of that claim.”

The 44-year-old son of Rupert Murdoch said the government was refusing to meet him and admitted he was disappointed that Bradley referred the deal on broadcasting standards and media plurality. However, Murdoch said he was confident the deal would still go through and he was “really looking forward” to dealing with the CMA, which he described as having a “reputation for probity and seriousness”.

Bradley referred the deal on broadcasting standards after raising concerns about a lack of compliance procedures at Fox News and corporate governance at the Murdochs’ companies. Letters between Bradley and Ofcom, the media regulator, show the culture secretary raised issues such as sexual harassment allegations at Fox News, the broadcaster’s discredited story that the murdered Democrat aide Seth Rich was the source of leaked emails, and the risk of Fox trying to “Foxify” Sky News.

However, Murdoch robustly defended Fox and Sky’s track records. “As the founder of Sky News, and we owned 100% of it for many, many years, there were no issues. When I was chief executive, no issues, and when I was chairman, and I am chairman again, no issues.

“So the record has to count for something. Whether or not 30 years ago someone has a grievance about a political position that a newspaper took that is no longer part of the business is irrelevant to a process that should be transparent, that should be fact-based, that should be evidence-based, and that should get an answer that makes sense for the UK economy, for the creative economy, and for the thousands and thousands of people who work at Sky and 21st Century and just want to go and build something great.”

He also said Fox dealt with allegations of sexual harassment at Fox News against Roger Ailes, the former boss, within two weeks of him learning of the claims.

“The first we heard about the Roger Ailes allegations was a New York Times story that a lawsuit was about to be filed and then it was filed,” he said. “We looked at it, we hired an independent outside law firm to investigate it, we looked at the allegations and in less than two weeks we made the decision and we had to move on from Roger Ailes. That was actually not a hard a decision – what he did was wrong and you just have to say it clear and say it loud, that is unacceptable behaviour in an organisation.”

Murdoch said he welcomed the “mystery” about his own views and that he did not discuss politics with his father, who has supported Donald Trump. “I think it is ironic that in the US in some sectors they think I am a raging liberal environmentalist treehugger and here I am the rightwing demon who is going to Foxify everything. I am glad at that because I think mystery is an important part of an identity, and I prefer it that way.”

Speaking after Murdoch, Bradley defended her decision to refer the deal to the CMA for an investigation that could last six months. Her decision meant she overruled Ofcom, the media regulator, which recommended that the evidence available did not justify a broadcasting standards investigation, and that Fox and Sky had a record of compliance in line with other major broadcasters.

Bradley said: “The threshold for reference that I have to take is lower than the threshold may be for the fit and proper test that Ofcom do. It is important that there is confidence in what decision is taken. I think given that there are non-fanciful concerns and given that the threshold is lower, it is important for public confidence that a full review takes place by the CMA.

“I think now, let the CMA do their work, they are technical experts in competition and markets and I want them to look at the concerns that have been raised. You will see when we publish all the information on this exactly why the referral has been made.”

Vince Cable, the Liberal Democrat leader and long-time Murdoch critic, said the government “must not now let itself by cowed by threats from the Murdochs”.

He said: “Succumbing to this kind of pressure would set a dangerous precedent. This whole episode goes to show that Brexit risks leaving Britain in a weaker position when it comes to standing up against multinationals.”

Fox is controlled by Rupert Murdoch and his sons Lachlan and James. If the bid is successful, Fox will then own all of Sky, and the satellite broadcaster will join the Sun, the Times and talkRadio in the Murdochs’ wider British media empire, giving the family a bigger reach than any other news provider apart from the BBC.

The newspapers are part of News Corp, which was split from Fox after the phone-hacking scandal. However, Ofcom considered the businesses as one during its review of the deal because it stated that the Murdoch Family Trust was in control of both.

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