Fox forcing out Bill O’Reilly could appease critics of the Sky deal

The controversial Fox News host Bill O’Reilly has been dropped from the network after allegations of inappropriate behaviour and sexual harassment, in a development that could have significant implications for the Murdoch empire on both sides of the Atlantic.

Ofcom, the British media regulator, is considering whether 21st Century Fox, the parent company of Fox News, is a “fit and proper” owner of pay-TV broadcaster Sky.

Campaigners say the allegations against O’Reilly should alarm the watchdog, which can recommend that the government blocks 21st Century Fox’s £11.7bn bid for the 61% of Sky that it does not already own. Rupert Murdoch and his son Lachlan are the joint executive chairs of 21st Century Fox while James Murdoch, Rupert’s other son, is chief executive.

Maggie Chao at campaign group 38 Degrees, which opposes the Sky deal, said: “There’s a mountain of evidence that the Murdochs are not fit or proper to own Sky. The recent allegations of sexual harassment at Fox News in the US are just another reason to doubt whether the Murdochs can be trusted to control even more of the UK’s media.

“Hundreds of thousands of people in the UK already don’t think they should be trusted. If Ofcom’s alarm bells weren’t ringing already, they certainly should be now.”

O’Reilly had been an anchor on Fox News since 1996 and was the most-watched host on cable television in the US.

However, the New York Times revealed earlier this month that O’Reilly and 21st Century Fox, the parent company of Fox News, have paid out about $13m (£10.1m) to settle allegations from five women about inappropriate behaviour and sexual harassment. More women have subsequently come forward with allegations against O’Reilly.

The scandal has led to dozens of companies pulling adverts from Fox News and protesters targeting the Fox News headquarters. It has also triggered an internal investigation conducted by the same New York law firm that looked into sexual harassment allegations that ultimately forced out Roger Ailes, the founding chair of Fox News, last year.

Lisa Bloom, an attorney who is representing women who have made allegations against O’Reilly, has made a direct link between the scandal and 21st Century Fox’s bid for Sky by writing to Ofcom to protest about the deal.

In the letter Bloom accused Fox News of having an “utter disregard for the rights of women” and creating a “toxic culture”. She added: “Fox’s failure to intervene to protect the rights of its female journalists, its secret payouts, and use of intimidation tactics are reminiscent of Rupert Murdoch’s tabloid phone-hacking scandal in 2011, when it emerged that News of the World reporters had hacked the voicemail of murdered schoolgirl Milly Dowler.

“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.”

Tom Watson, the deputy Labour party leader and the shadow culture, media, and sport secretary, urged Ofcom to consider the O’Reilly scandal as part of its investigation into whether 21st Century Fox is a fit and proper owner of Sky.

“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 UK’s most powerful broadcasters,” he said.

Karen Bradley, the culture, media and sport secretary, has indicated that she expects Ofcom to look into the corporate governance of the Murdochs’ companies.

In a letter to 21st Century Fox and Sky last month Bradley’s department said she wanted Ofcom to look at whether the “culture or corporate governance” at 21st Century Fox explained why the services it operated, such as Fox News, had proportionately breached the broadcasting code more than Sky. The letter also referred to the “huge failings of corporate governance at the News of the World and its parent, News Corporation” during the phone hacking scandal.

Ofcom is scheduled to make a decision before 16 May. The Murdochs’ previous bid for Sky was scrapped in 2011 when the phone hacking scandal was at its peak. Since then, the family has restructured its empire. The publishing businesses, including the Sun, the Times and the Sunday Times in the UK, were spun into a company called News Corp while the entertainment arm, including Fox News and the film studios, was spun into 21st Century Fox. However, Rupert and Lachlan Murdoch remain co-chairs of both businesses, while James Murdoch is on the board of News Corp as well as being the 21st Century Fox chair.

The decision by 21st Century Fox to force out O’Reilly could appease Ofcom and critics of the Sky deal. In the past Rupert Murdoch has stood by high-profile employees when they have faced heavy public criticism, including Rebekah Brooks, who was appointed chief executive of News UK, the UK arm of News Corp, after being found not guilty of phone-hacking charges, and Kelvin MacKenzie, the controversial former editor of the Sun.

MacKenzie was suspended as a columnist by the Sun last week after comparing the Everton footballer Ross Barkley, whose grandfather is Nigerian, to a gorilla and writing that the only other men in Liverpool who are paid £60,000 a week are drug dealers. MacKenzie was already a contentious figure in Liverpool because of the Sun’s coverage of the Hillsborough disaster while he was editor.

In a statement about the proposed Sky deal, 21st Century Fox said it “takes its regulatory and compliance obligations very seriously”. It added: “We have a strong record of compliance in all our markets, including in the UK.

“We are confident that our proposed transaction to acquire the outstanding shares of Sky that we don’t already own will be approved following a thorough review by regulators.”

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