LONDON — Bill O’Reilly’s sexual harassment scandal is causing more headaches for 21st Century Fox’s 11.3 billion pound ($14.8 billion) bid to take full control of U.K. cable network Sky Plc.
Revelations that U.S.-based Fox News renewed O’Reilly’s contract after he settled a sexual harassment lawsuit for $32 million came just a month after Britain’s culture secretary asked competition regulators to review the takeover. Karen Bradley said one of the reasons for her decision was that Fox News’ handling of a broader sexual harassment scandal raised concerns about corporate governance at Rupert Murdoch’s 21st Century Fox.
Soon after the New York Times broke the story about O’Reilly’s contract renewal, a senior member of the British opposition Labour Party said he planned to ask the regulator to reject the takeover.
“More revelations about the corporate culture at 21st Century Fox,” Deputy Leader Tom Watson tweeted. “It shouldn’t be allowed to take over Sky.”
Murdoch’s media group wants to buy the 61 percent of Sky it doesn’t already own. The takeover values Sky, which broadcasts Premier League soccer, at 18.5 billion pounds.
Bradley in September asked the Competition and Markets Authority to evaluate the takeover in light of Fox’s commitment to broadcasting standards and the deal’s impact on media plurality in the U.K.
That decision initiated what may be a six-month investigation into Murdoch’s drive to consolidate his media empire, bringing renewed attention to the mogul’s holdings. With Murdoch already owning the Sun and The Times newspapers, there are concerns that he and his company will wield too much power in Britain.
But the regulator will also look at a variety of other issues to determine whether the merged entity would have a “genuine commitment to broadcasting standards objectives.” Among these are allegations that 21st Century Fox’s board failed to recognize that sexual harassment was a problem until a Fox News anchor took the issue to court, according to a Sept. 12 letter to the company from the Department for Digital, Culture, Media and Sport, which Bradley heads.
The O’Reilly revelations are giving fresh oxygen to opponents of the takeover. The campaigning group Avaaz said it was amending its submission to the CMA to cast “further doubt” on the takeover.
“While U.K. authorities were assessing their Sky bid, the Murdochs turned a blind eye to yet another O’Reilly sex scandal, then awarded him a multimillion dollar pay rise,” said Alex Wilks, Avaaz’s campaign director. “This behavior shoots a hole in their claim to have cleaned up their act. We’re urging the competition watchdog to obtain full details of Fox’s secret settlements and what the Murdochs knew.”
The issue has been fraught in Britain. An earlier Murdoch attempt to buy the remaining shares of Sky was scuttled by the 2011 phone-hacking scandal, in which journalists working for Murdoch newspapers were accused of gaining illegal access to the voicemail messages of celebrities, members of the royal family and crime victims.
Murdoch’s News Corp. withdrew its bid for Sky in 2012, amid fallout from the scandal. News Corp. in 2013 split itself into two companies, with 21st Century Fox focusing on broadcast and cable television, as well as film and TV studios.
Murdoch shut down the 168-year-old News of the World tabloid at the height of the controversy. The anger over phone-hacking has abated, giving the media empire another shot at consolidating its holdings.
The O’Reilly revelations are unlikely to shock regulators, particularly if 21st Century Fox was careful in disclosing past allegations to authorities as part of the bid.
U.S. settlements are generally much larger than those in Britain in regard to sexual harassment cases, so that alone would not change the situation, said Alice Enders of Enders Analysis, a media expert.
“We’re not at a point that we’re looking at something that is going to be the smoking gun,” she said, adding that the O’Reilly revelations and the eye-watering sum will simply “reinforce existing impressions on questions of corporate governance issues.”
But analysts say it is important to point out that all of these reports serve to inform Culture Secretary Karen Bradley, who ultimately will decide whether to approve the deal. Any new information that raises questions about governance and company culture is relevant and must be considered or the government leaves itself open to further legal action.
“Political pressures may be more important,” said Damian Tambini, an expert in media communications regulation and policy at the London School of Economics. “In the current political climate, Ms Bradley will be very keen not to be seen as part of a move to excuse a company where there is an alleged culture of sexual harassment, or sweep it under the carpet.”
21st Century Fox was not immediately available for comment.