If Rupert Murdoch's critics in the U.K. and the U.S. needed more ammunition to show that Twenty-First Century Fox Inc. (FOXA) - Get Report isn't suited to take full control of Sky plc, they got it over the weekend.

Labour Party leader Tom Watson told The Guardian on Sunday, Oct. 22, that he would press the country's competition board to reject the Murdochs' proposed £11.7 billion ($15.4 billion) acquisition of the 61% of the European pay-TV and internet operator that Fox didn't already own. Watson's ire was piqued over the weekend by a report from The New York Times that Fox News in February signed then-anchor Bill O'Reilly to a new contract worth $100 million over four years just one month after settling sexual harassment allegations against him for $32 million.

"Rupert Murdoch and his sons, Lachlan and James, the top executives at 21st Century Fox, made a business calculation to stand by Mr. O'Reilly despite his most recent, and potentially most explosive, harassment dispute," the Times wrote.

Fox shares were down 1.7% on Monday morning to $27.04, extending the stock's 2017 decline to 3.5%. In contrast, the S&P 500 index has advanced 15% this year.

O'Reilly was forced out in April after the Times reported that five women received payouts from Fox News or O'Reilly for agreeing to not pursue litigation or make public their allegations of sexual harassment. The agreements, the newspaper reported, totaled $13 million.

Earlier this month, U.K. regulator the Competition and Markets Authority said it would examine Fox's treatment of its employees both in the U.K. and in other countries to assess its commitment to broadcasting standards. Fox executives had been pushing for months for the competition board not to embark on such an inquiry.

Of particular importance, the January settlement and February contract extension for O'Reilly came six months after CEO James Murdoch went to great lengths to insist that the company would take all necessary steps to improve its workplace environment following the July 2016 ouster of its co-founder and imperial boss, Roger Ailes, also amid charges of sexual harassment. Ailes died in May from complications from a head injury sustained at his Palm Beach, Fla., home.

Rupert Murdoch, 86, took over as chairman and CEO of Fox News in July 2016 after Ailes was forced out of the company.

Watson, Labour's deputy leader, said over the weekend that the Times' latest reporting on the network demonstrated that Fox had "allowed a culture of bullying to flourish."

In response, Fox defended its decision to re-sign O'Reilly, explaining in an emailed statement that the anchor had told the company he had personally agreed to settle sexual harassment charges by a former Fox News legal analyst who said she planned to file a lawsuit. Fox said it was not aware of the amount of money that O'Reilly paid the legal analyst, Lis Wiehl, and that the anchor's new contract included "protections for the company specifically aimed at harassment."

"21st Century Fox has taken concerted action to transform Fox News, including installing new leaders, overhauling management and on-air talent, expanding training and increasing the channels through which employees can report harassment or discrimination," Fox said in the statement. "These changes come from the top, with [co-chairman] Lachlan and James Murdoch personally leading the effort to promote civility and respect on the job, while maintaining the company's long-held commitment to a diverse, inclusive and creative workplace."

The Times report, though, is likely to be used by Fox's critics to allege the company sought to cover up rather than clean up a workplace culture that allowed sexual harassment to fester.

The CMA last month said it would accept public comment regarding Fox's "genuine commitment" to broadcasting standards and, crucially, whether taking full ownership of London's Sky would reduce media plurality and access to differing voices. The CMA also said it contacted Ofcom, the government's separate media regulator, to ask for information and factual and technical assistance.

The CMA investigation could take as long as six months; its recommendation will be sent to Culture Secretary Karen Bradley for her decision on the Fox-Sky deal.

The Murdochs have wanted to own all of Sky for years but previously were thwarted in 2011 after revelations that U.K. newspapers owned by Fox illegally obtained voicemails of celebrities, politicians and crime victims, including a murdered girl. Some six years later, the Murdochs are once again having to deflect attention about the internal workings of their company as they pursue the same goal of taking full ownership of a cable TV and internet provider with operations in the U.K., Ireland, Germany, Austria and Italy.

Fox announced an agreement in December to acquire all of Sky, predicting the deal would close by the end of 2017.

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