What's going on?

UK regulators said on Tuesday that media mogul Rupert Murdoch�s 21st Century Fox was unlikely to get the green light for its $16 billion bid to buy European media giant Sky � but that�s not the end of it…

What does this mean?

For years now, Rupert Murdoch has hankered after full ownership of Sky, a British-headquartered telecoms company which pioneered satellite TV in the country. Back in 2016, Murdoch launched a bid to buy the whole shebang via his firm 21st Century Fox (which already owns 39%).

The UK�s competition regulator, however, reckons that Murdoch�s family would have too large an influence on British media if Fox owned all of Sky. It�s therefore made clear that it�s unlikely to give the deal its blessing in its current form � but it did leave the door open for Disney to eventually acquire all of Sky.

Why should I care?

The bigger picture: Regulatory approval is central to this intercontinental saga.
Disney agreed back in December to buy a $66 billion chunk of Fox � including its 39% stake in Sky. The UK regulator said it would be more amenable to a buyout of the remaining bits of Sky once that deal was finalized, which is a heavy hint that it would give the green light to Disney. But the Disney/Fox deal has to first get past US regulators, who could block it on the grounds that it diminishes the competitiveness of the US media industry.

For markets: Shares of Sky jumped around 2% on Tuesday.

Since the issues surround Murdoch controlling too much of the UK media, the regulator is unlikely to oppose Sky being sold to Disney. The uptick in Sky�s shares on Tuesday likely reflected this more optimistic view that a deal will, eventually, get done � and that Disney will pay Sky�s investors a nice premium for the privilege.