The UK’s Labour Party won big in the recent election, a referendum on many things championed by the political “other side” in Britain. At Sky, things looked grim: stock fell four percent just on the idea that the election results may bode poorly for the expected Fox takeover.
Some say those concerns might be well-founded. Labour leaders may not be too interested in having Sky remade in the image of Murdoch’s right-leaning political affections, so there’s some strength to the idea that these newly empowered leaders would take a stab at scuttling the deal.
Meanwhile, Conservative Party leaders who championed the takeover are reeling, while Prime Minister Theresa May works to form a minority government. That said, the takeover may just be a formality at this point. Fox already owns nearly 40 percent of Sky, so coming up with a majority stake would not take too much doing, respectively speaking.
Analysts are already on record saying the deal would be pretty much done had the Conservative Party managed to hold onto its majority. Now, however, experts are less sure, predicting a much tougher route for Fox. Investors are leery of the deal, worried it might not happen, so they’re keeping the stock price even lower than Fox’s bid amount.
That said, the real issue here is what the British and their elected government would do if Fox tried to turn Sky — in American parlance, into a “red” network. Pushing a more conservative brand of news in the UK might be popular in some quarters, but it would highlight the country’s growing divide as illustrated by the contentious Brexit vote. Even if Fox does come through with the deal, Sky would have an uphill climb in keeping its audience happy.
That dynamic alone might be enough for media regulators to nix the deal by determining that Fox’s leadership is not “fit and proper” to take control of Sky. Likely, if that does transpire, regulators would blame the recent series of major scandals at Fox News Network in the United States … but regardless of what happens, there will be political and public relations consequences.
Ronn Torossian is CEO of 5WPR.