Last week I flew back from the Oscars to find Rupert Murdoch making headlines on both sides of the Atlantic. In this country it was the row over Tony Blair supposedly interceding with the Italian prime minister, Romano Prodi, in Murdoch’s attempts to buy Silvio Berlusconi’s three-channel commercial television empire, Mediaset.
In Los Angeles it was the astonishing news that Murdoch’s American broadcasting vehicle, Fox, was buying the local baseball team for the unheard of price of $311m (183m) – roughly twice what anyone had previously been prepared to pay for a baseball side.
The deal was analysed by the Los Angeles Times with the sledgehammer thoroughness typical of American big city newspapers. That was partly because the Dodgers occupy a position in the life of Los Angeles not unlike that of United in Manchester – even though the former Brooklyn Dodgers only arrived in the city in 1958 when the team’s owner, Walter O’Malley, got fed up with the New York authorities’ reluctance to let him build a new stadium (it’s O’Malley’s son Peter who’s sold out to Murdoch).
But the paper was also clearly fascinated by Murdoch – who has been a major player in Hollywood for years, as owner of both Twentieth Century Fox and the Fox TV network, but has not hitherto impinged much on the wider life of LA.
Characterising Murdoch as “a global drifter, rarely participating in the civic life of a city unless he can use it to enlarge his business interests”, the Times analysed his friendly relations with Los Angeles’ mayor, Richard Riordan, a liberal Republican and enthusiast for organised labour who hardly seems a natural soul mate for the robustly right-wing Murdoch.
But just as he has assiduously cultivated Tony Blair – and saw his efforts pay off when Blair made enquiries on his behalf with Prodi – so Murdoch has made a friend of Riordan by willingly contributing, according to the Times, to every charitable cause the mayor has solicited him for, including the cost of building a new Roman Catholic Cathedral in LA (Riordan is a Catholic) and a children’s charity.
It’s true that Murdoch also gave $1m to Riordan’s opponents in the Californian Republican Party in 1996, but in the mayor Murdoch has secured a useful ally, should he wish to use the Dodgers purchase as a step towards buying a major league football team for LA, and towards building a new stadium to house it on some of the 300 acres of parking lots next door to the Dodgers’ existing home.
But $311m is a lot to pay for a baseball team, even if a football team may in due course follow. The Times doubted Fox could make money out of the deal – but then, some said much the same about the first BSkyB-Premier League deal.
The justification seems to be that, in an increasingly competitive media market, valuable “marquee” properties like top-drawer sports teams and leagues and blockbuster movies become ever more valuable, not so much for the cash they can themselves generate as for what they say about a broadcaster’s seriousness, for the potential they offer to promote other parts of the schedule and for their potential sales overseas and in secondary markets.
Fox knows this well. BSkyB has shown how valuable sports rights can be. Twentieth Century Fox knows well how profitable big movies can be – including the biggest of them all, Titanic, in which Fox has a 40 per cent stake and which, despite its record $200m (118m) cost, has so far taken $1bn (600m) at the box office to add to its 11 Oscars.
And the Fox affiliate in New York, WNYW-TV, has first-hand experience from the other side of the fence: it’s just agreed to pay $78m ($45m) over five years for repeats of NBC’s phenomenally successful Seinfeld.
A multinational company like News Corporation, with Fox TV in the US, BSkyB in Europe and Star TV in Asia (where baseball is a popular game) can also exploit the rights it owns internationally – although to do that in the case of the Dodgers, Fox will first have to get the baseball league to change the rule which says overseas TV rights must be negotiated centrally by the league, not by individual clubs (a rule Fox pledged to abide by as a condition of the other team owners’ approval for the purchase).
Once again, Murdoch has demonstrated his flair for the deal, and his ability to make headlines, outmanoeuvre rivals and make friends of influential politicians.
Next week he gives a rare speech in the UK at the Government’s European Audiovisual Conference in Birmingham, called to discuss the future of TV, film, the Internet and telecommunications across continental Europe. It should make interesting listening.