Sour grapes for Murdoch’s media
Has the old boy finally lost his touch? It takes no more than a glimpse at the record to see this hasn’t been a vintage year for Rupert Murdoch.
Most irking by far was the failed bid for Hughes’ DirecTV business. Bad enough that the strategic deal of the decade – which would have transformed NewsCorp’s TV interests into a truly global force – miscarried. But to have the spoils carried off by cheeky Charlie Ergen, backed by little more than a mountain of IOU notes, must have been mortifying indeed.
And to add insult to injury, EchoStar, Ergen’s fragile satellite empire, has just been bolstered by Murdoch’s arch media mogul rival, Jean-Marie Messier – whose media vehicle, Vivendi Universal, this week bought a &£1bn, ten per cent stake in it. The same Messier who, only this week, succeeded in carrying off his own transformative strategic deal. Thanks to the $10.8bn (&£7.4bn) acquisition of the film and television arm of USA Networks, with Barry Diller thrown in, Vivendi can now consider itself the world’s second-largest media company, after AOL Time Warner.
Which leaves Murdoch where? Fretting over the implications of aligning himself to Kirch Gruppe – another potentially transformative deal (judged at least on a European scale) that is riddled with problems. But before we write the ‘spent force’ epitaph, hailing en route the advent of a new generation of media moguls such as Messier, Ergen and Dick Parsons at AOL, it’s worth remembering the game is far from over yet. Deals hastily concluded (and Messier has done five in the US alone this year) often unravel.
As for Murdoch, he’s been there before and survived. The on-off-off ‘epoch-making’ deal with Silvio Berlusconi springs to mind. A more interesting index of his powers, waning or otherwise, may be seen in how he continues to micro-manage his empire. He has played a good hand, for instance, over UK pay-TV – effectively trouncing his rivals as they attempt to enter the digital era. Admittedly the anti-competition inquiry being pursued by the Office of Fair Trading could result in a megabuck fine for BSkyB. More likely, however, it will end with BSkyB dropping its prices, slightly.
Equally, we are witnessing some classic Murdoch manoeuvring in his long-neglected UK newspaper empire. It’s hard to fathom how seriously News International views the opportunity of launching a free (Metro style) London (Evening Standard style) newspaper. All that’s known for certain is that the Railtrack station distribution contract, handled by Maiden and currently held by Associated Newspapers’ Metro, is up for grabs. The consensus seems to be that Murdoch is playing games with his main UK rival. Associated itself is not so sure. It has even dusted down that old war-horse, Bert Hardy – who so effectively saw off Robert Maxwell all those years ago when he tried a similar stratagem.
What Murdoch does next, and how well he handles it, will provide all the insight necessary into the ‘over the hill’ theory.
