Six years ago, a scandal involving phone hacking at U.K. newspapers owned by Rupert Murdoch forced 21st Century Fox (FOXA) to withdraw efforts to acquire the portion of European satellite TV and internet provider Sky that it didn't already own.
Earlier this week, some Fox observers speculated that the emergence of new allegations of sexual harassment at the company's Fox News Channel could similarly upset Murdoch's second attempt to take full control of Sky.
But on Friday, the European Commission approved Fox's $14.2 billion proposal to combine its 39% stake in Sky with the rest of the company. Yet to close the transaction, Murdoch still needs the approval of U.K. regulator Office of Communications, or Ofcom, which oversees the communications industry.
Sky needs a license from Ofcom to operate in the U.K., and to acquire that license it needs to demonstrate that "a person is fit and proper" to hold it. Six years ago, Fox CEO James Murdoch was in charge of the Murdochs' U.K. newspaper group when numerous journalists were arrested, and some high-ranking editors convicted, for hacking into the phones of celebrities including Princes William and Harry as well as a 13-year-old girl, Milly Dowler, who was abducted and killed in 2002, an incident that shook the country.
With such a backdrop, analysts including Brian Wieser of Pivotal have speculated that the new allegations against Bill O'Reilly could upset the Sky acquisition once again.
Earlier this week, The New York Times uncovered sexual harassment claims that hadn't been made public against Fox News' biggest star, the tempestuous host of the most popular hour of cable TV news, The O'Reilly Factor. The report, published Sunday, alleged five women who worked at the network received payouts totaling $13 million either from O'Reilly or Fox News in exchange for agreeing not to pursue litigation.
The latest allegations against Fox News prompted a rash of advertisers to withdraw their support for O'Reilly's show. Fox, in an emailed statement, said that those ads would be redeployed to other shows on the network. At least 33 companies have pulled ads from The O'Reilly Factor including Mercedes-Benz, BMW, Hyundai, GlaxoSmithKline (GSK - Get Report) , AllState (ALL - Get Report) , Wayfair (W - Get Report) , Rollins' (ROL - Get Report) Orkin, TrueCar (TRUE - Get Report) and T. Rowe Price (TROW - Get Report) .
The European Commission announcement is sure to prompt a sigh of relief for the elder Murdoch, 86, who took charge of Fox News in July after Roger Ailes, its longtime chairman who co-founded the network with him in 1996, was forced out of the company following a lawsuit alleging sexual harassment. The suit, filed by former fox News anchor Gretchen Carlson, was withdrawn after Fox agreed to a settlement of $20 million.
Ofcom in 2012 said that the Murdochs' News Corp. (NWSA - Get Report) was "fit and proper" to own Sky but scolded James Murdoch, charging that his actions "repeatedly fell short" of expectations for his role as president of the newspaper group at the time of the scandals. Regardless of that statement, the Murdochs withdrew their bid to acquire Sky in July 2011.
Further complicating matters this time around, though, are accusations by Fox News on-air commentator Andrew Napolitano, who repeatedly charged, without evidence, that the U.K. government last year had wiretapped Trump Tower, home of President Donald Trump.
"We don't know how much weight may be placed on the O'Reilly matter or others which may arise from the U.S. Attorney's investigation," Wieser said in an investor note Tuesday. "However, it would be unsurprising if these items, along with the decision to bring back on-air Fox News personality Andrew Napolitano (who has made repeated claims on air that the U.K. government wiretapped Trump Tower; those claims are disputed both by the U.K. government and Fox News itself) were included in Ofcom's considerations regarding the fitness of Fox's management."
Time will tell if this latest scandal is enough to scuttle the acquisition once again.