Sky has warned it could close down Sky News if it proves a sticking point with regulators in its £11.7bn takeover by Murdoch-owned 21st Century Fox.
The threat to review the future of the news channel if a deal is blocked was made in a submission by Sky to the UK Competition and Markets Authority.
The body is undertaking a six-month investigation into whether Fox’s purchase of the remaining 61pc of Sky it does not already own would limit media plurality and affect broadcasting standards.
Sky said the competition watchdog should not “simply assume the continued provision of Sky News and its current contribution to plurality absent the transaction”.
The broadcaster warned it “would likely be prompted to review the position in the event that the continued provision of Sky News in its current form unduly impeded merger or other corporate opportunities available in relation to Sky’s broader business”.
Its shares tumbled 1pc yesterday, to close at 930p, wiping more than £160m off its market capitalisation.
The CMA was asked to launch the investigation by Culture Secretary Karen Bradley in September, in a surprise move which saw the Government effectively overrule Ofcom .
The media regulator had conducted its own three-month probe earlier this year, finding there were grounds to refer the deal to the CMA for scrutiny over media plurality but not over broadcasting standards.
In its comments to the CMA, Sky said, as regards to whether its takeover by 21st Century Fox would harm broadcasting standards, “there would have to be something in the nature of [Fox’s] corporate governance that gave rise to an identifiable risk of it degrading Sky’s existing procedures such as to create an ‘identifiable risk in terms of broadcast standards compliance'”.
It said the CMA should place “significant weight” on Ofcom’s findings that both 21st Century Fox and Sky’s records of compliance are “‘good’ and ‘in line with other broadcasters'”.
Earlier this week, though, Ofcom ruled that 21st Century Fox-owned Fox News channel had in fact twice breached UK broadcasting impartiality rules, before being pulled from airwaves in August.
Signs that 21st Century Fox’s optimism is waning over whether the deal will complete emerged on Monday, with reports that it had held talks with Disney to sell its stake in Sky, among other assets.
Analysts at Liberum said the discussions could be seen as a sign that it was “less confident” that it would gain regulatory approval from the UK Government for its Sky deal, and “may scrap its bid”.
Should the deal fail, it would be the second time a Murdoch takeover of Sky is scuppered, with its earlier attempt, in 2015 under the News Corp banner, falling through amid political fallout from the phone hacking scandal.