Even before Fox News officially fired Bill O'Reilly on Wednesday, the sexual harassment allegations against the host were casting a shadow over a controversial $14.5 billion media deal in Europe.
The O'Reilly crisis was being cited in 21st Century Fox's latest effort to take control of the pan-European broadcaster Sky, a media property the Murdoch family failed to buy in 2010, according to Variety.
Murdoch currently owns 39 percent of Sky and is offering approximately $14.5 billion to purchase the remaining 61 percent.
The allegations against O'Reilly and the dismissal last summer of Fox News chairman Roger Ailes have rekindled memories of how a previous Murdoch news scandal, Britain's phone-hacking affair, killed the company's earlier shot at fully acquiring Sky.
A key to securing British government approval for the deal will be to convince U.K. regulators the Murdochs are “fit and proper” to hold a broadcast license.
The Daily Mail reported earlier this month that 21st Century Fox cleared the initial hurdle in purchasing Sky after winning approval of European Union regulators.
"Based on the results of its market investigation, the Commission concluded that the proposed transaction would raise no competition concerns," the EU body said in a statement.
But some fear that Fox's ownership of Sky could reduce the mix of viewpoints in British media, according to CNN. Murdoch also owns the country's largest newspapers in The Sun, The Times, and The Sunday Times. European critics said the proposed Fox-Sky deal would unfairly dominate bidding rights for major sports events and movies.
The O'Reilly scandal and the Murdochs' handling of it could come up in a more comprehensive review of 21st Century Fox's efforts by United Kingdom media regulator Ofcom, CNN said. The regulator plans to rule by May 16.
The British government’s top media official Karen Bradley said the proposed takeover will be reviewed to ensure that Murdoch and his companies are “fit and proper” holders of a broadcast license.
O'Reilly was Fox News' biggest star on its biggest cable news show "The O'Reilly Factor." He was let go Wednesday with 21st Century Fox issuing a statment: "After a thorough and careful review of the allegations, the Company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel."
Gabriel Sherman of New York magazine earlier wrote, "The prospect of dumping O'Reilly — once unimaginable — has gained steam this week due in part to street protests outside Fox News headquarters and advertiser boycotts on O'Reilly's air. One network insider said Fox executives are alarmed by the severity of the ad-revenue decline."
The magazine wrote that dumping O'Reilly could help silence critics and the remaining chatter over the phone-hacking scandal, and mark the final push to close the deal to purchase Sky. Now the "unimaginable" has come to pass, but its effects remain to be seen.
Sources told New York magazine that while Rupert Murdoch was standing behind O'Reilly, his sons – James and Lachlan – wanted him out.
"Rupert Murdoch built his media empire without paying much attention to corporate norms and rules, but his sons showed with the ouster of [Roger] Ailes that they wanted to run a different kind of company," Sherman wrote for the magazine. "What happens to O'Reilly will tell us more about who is winning the intergenerational battle over 21st Century Fox."
"Many of us believe if you look at the conduct of the Murdochs and the untrammeled power they already have it is not in the public interest for them to take over Sky and have full control," Ed Miliband, former leader of the opposition Labour Party, told Reuters last month.
Murdoch's son James, who is chief executive of Fox and chairman of Sky, was criticized by Ofcom in 2012 over his handling of the phone-hacking scandal.
The regulator said his management of the group's U.K. newspapers at the time "repeatedly fell well short of the conduct to be expected of as a chief executive and chairman," although it said Sky remained a fit and proper owner of broadcast licenses.
Twenty-First Century Fox, which owns cable, film, and pay-TV assets around the world, said the media market had changed dramatically in recent years as broadcasters face new challenges from streaming services.
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