What next for Murdoch?
The bid for the BSkyB satellite broadcaster is dead—and the expectation is that Rupert Murdoch won’t be able to come back to bid for 100% of the broadcaster for several years, if at all. The billions sitting on News Corp’s balance sheet will most likely be spent elsewhere. Mid-2011 may well turn out to be the high water-mark of Murdoch’s influence over the British media.
His advisers were quick to indicate that the media mogul’s company would now seek other commercial opportunities—“We’re likely to deploy our capital elsewhere”—one source said, and although the media giant may not be the most transparent group to outsiders it is all too aware that it is now so unpopular that expansion in Britain can no longer be on the agenda.
Chase Carey, Murdoch’s No 2, made a diversion from a planned trip to Germany this week and flew to Britain, where the final decision to walk away was taken before Prime Minister David Cameron and main opposition leader Ed Miliband jousted in the House of Commons.
Murdoch, his eldest children and other board members knew broadly what the prime minister would say—as company insiders recognised, News Corp has to sort out “its own mess” first.
Murdoch cannot easily come back for another Sky bid. Any new approach would restart the regulatory clock and it took a year to fail to get a decision this time around. Meanwhile, it will take several years for criminal, judicial and parliamentary inquiries into phone hacking and media standards to conclude—during which time political and public opinion is unlikely to favour a deal.
There are signs, too, that Murdoch may be willing to go further in retreating from the United Kingdom. News Corp’s Wall Street Journal noted this week that Murdoch’s company had “informally explored” whether there could be any buyers for the London Times, The Sunday Times and the daily tabloid Sun—but the problem with selling the newspapers is that it won’t rid him or the company of the criminal inquiries, which look set to be far more exhaustive than ever thought.
Murdoch has long said he is “too sentimental” to sell any newspapers, but the report in the Wall Street Journal will be enough to excite interest for a set of newspapers that nobody believed would ever come on the market.
In the current climate, if he were to receive another £1-billion offer for the Sun—as he did from rival UK newspaper publisher Richard Desmond in 2009—there is a genuine possibility it would be accepted. Any price for the loss-making Times titles could actually be attractive, a point not lost on concerned staff.
At the same time, the heir apparent, James Murdoch, is in the process of relocating from London to New York. In the light of the hacking claims there are already signs that UK institutional shareholders are questioning whether he can remain chairman of BSkyB, the company he led for four years, until the end of 2007. He may also consider a dignified retreat rather than face yet another British battle that could create an unwelcome precedent if he were ever nominated to become chief executive of News Corp.
Two weeks ago it looked inevitable that the UK culture secretary would approve a merger that would fuse the UK’s biggest broadcaster, Sky, with more than £6-billion of turnover, with the company that accounted for 37% of all newspapers sold in the UK.
In less than a fortnight Murdoch has had to close one of his four newspapers and walk away from a bid for BSkyB, for years, if not forever. The days of the Murdochs in Britain are not over, but their influence is, today, far from its peak.—