By DANNY HAKIM and STEPHEN CASTLE
April 21, 2017
LONDON — Britain postponed on Friday its regulatory review of 21st Century Fox’s proposal to take full control of the British satellite television giant Sky until after the country’s general election in June.
The delay comes amid calls for British regulators to consider Fox’s handling of sexual harassment cases in the United States, which recently led the company to dismiss Bill O’Reilly, its highest-profile news anchor. The regulator, the Office of Communications, commonly known as Ofcom, is reviewing the potential effects of a merger on media competitiveness and is testing whether the combined company would be “fit and proper” to hold a broadcasting license.
The government cited the shifting political timetable as the reason for the delay. Prime Minister Theresa May issued a surprise call on Tuesday for early elections on June 8.
When a general election approaches, officials enter a period known as purdah, during which they avoid announcements that risk influencing the outcome of the coming vote.
Ofcom, which is independent, was to provide its report to Karen Bradley, the British minister for culture, media and sport, who would then have decided whether or not to abide by its recommendations.
Because a decision to approve or deny the merger would formally be made by the minister, rather than by Ofcom, the period for deliberations was extended until June 20, officials said.
Ms. Bradley, who previously called for the competition review to be completed by May 16, said on Friday in a statement that she was extending that deadline “given the proximity of this decision to the forthcoming general election.”
In the “fit and proper” test, Ofcom is trying to determine whether the people who would be running the company are fit to do so. The test is relatively rare, but is familiar to Rupert Murdoch and his corporate empire.
The last such review by Ofcom began in 2011, and also examined the fitness of Sky, then called British Sky Broadcasting, amid a bid by the Murdoch-led News Corporation to buy full control of the company.
News Corporation has since been split into two companies, including 21st Century Fox. The earlier review was conducted in the wake of a telephone hacking scandal that had engulfed the Murdoch family. Sky ultimately passed the review, but James Murdoch, Mr. Murdoch’s son and top lieutenant, was criticized in Ofcom’s report for his mishandling of the hacking matter. The proposed acquisition was abandoned.
It is not clear whether the review of the new Sky deal will encompass actions that took place in the United States. In the past several months, Fox News, which is owned by 21st Century Fox, has forced out Mr. O’Reilly and its chairman, Roger Ailes, as a result of sexual harassment scandals.
“We’ve been listening to a range of views around what we should consider relevant to the current ‘fit and proper test,’ ” said Joe Smithies, a spokesman for Ofcom.
Speaking generally, he added: “We have an ongoing duty to be satisfied that holders of our broadcasting licenses are fit and proper, and that duty is a legal obligation from the Broadcasting Act, and it’s something we take very seriously.”
“In considering whether any licensee is fit and proper, we would take into account any relevant misconduct of those who manage and control a broadcast licensee,” he said.
Tom Watson, the deputy leader of the opposition Labour Party, said in a statement that it “is important that full and proper process is followed in the assessment of this bid.”
“I have consistently argued Ofcom must consider the serious and systemic corporate governance failures at Fox as part of its inquiry into whether the company should be allowed to take full control of Sky,” he added. “The conduct of senior executives at Fox and their consistent failure to meet corporate governance standards in the recent past has a direct bearing on whether it is a suitable owner of one of the U.K.’s most powerful broadcasters.”
A spokeswoman for 21st Century Fox pointed to previous statements by the company. One said it was “confident that the proposed transaction will be approved following a thorough review process,” while another said the company “takes its regulatory and compliance obligations very seriously. We have a strong record of compliance in all our markets, including in the U.K.”
Sky declined to comment.
In a letter to Ofcom last week, Lisa Bloom, a lawyer representing Wendy Walsh, one of Mr. O’Reilly’s accusers, wrote that “the similarities between the current harassment scandal and the phone-hacking scandal reveal the company’s approach to business and management — a lack of oversight, intervention, and decency.”
Mr. O’Reilly has said that the claims against him are unfounded.