Fox Networks Group (FNG), an operating unit of Murdoch’s 21st Century Fox (NASDAQ: FOX), was one of the targets raided by investigators for the European Commission this week. It was first reported by the Telegraph and subsequently confirmed by FNG. The company said it’s cooperating with the officials.
The offices of a number of companies involved in sports broadcasting rights were raided as part of the wide ranging investigation. According to the European Commission, the focus of the investigation were companies that distribute “media rights and related rights pertaining to various sports events and/or their broadcasting”.
The EC said in a statement that the companies involved “may have violated EU antitrust rules that prohibit cartels and restrictive business practices.” If the allegations are true, the companies would be in violation of Article 101 of the Treaty on the Functioning of the European Union. The Commission did not name any of the companies affected.
The unannounced inspections were carried out in several European countries. The Commission officials were accompanied by their counterparts from the relevant national competition authorities. Unannounced inspections are a preliminary step into suspected anticompetitive practices. The Commission was careful to say that such inspections do not mean that the companies are guilty of anti-competitive behavior.
Sports broadcasting is a huge business in Europe. Networks spend billions of pounds to secure exclusive rights to games. There has been no indication as to when the investigations may be completed. The Commission said there was no legal deadline to complete inquiries into anti-competitive conduct.
The raid comes at a sensitive time for Fox. The company is currently engaged in string of deals that are facing regulatory approval. Notably, Fox wants to buy Europe’s biggest pay-TV company Sky for around $15 billion. Sky has 22 million subscribers in Britain, Ireland, Germany, Austria and Italy. The EU approved the acquisition last April, and U.K. regulators continue to assess it.