Murdoch cashes in on Sky franchise while Malone’s Liberty waits in the wings for ITV

I don’t know what 83 year-old Rupert Murdoch’s on but he should do the decent thing and share it with the rest of us.

imagesAs expected, Murdoch (left) has sealed a deal in double-quick time to add all of Sky Deutschland and Sky Italia and his UK BSkyB holding – even as he lays siege to entertainment rival Time Warner in the US with a $75bn bid.

BSkyB, in which, annoyingly for him, his 21st Century Fox owns only a 39 per cent stake, has coughed up over £5bn to expand its empire. Most of the money will go into Murdoch’s coffers, strengthening his Time Warner hand.

The deal positions BSkyB, or whatever the enlarged company is to be called, as one of two European pay-TV giants alongside John Malone’s Liberty Media which now owns UK cable broadcaster Virgin Media. Both owned by Americans, of course.

Will the deal affect advertisers and agencies? Most pay-TV revenue comes from subscriptions; delivering smallish premium sports audiences. But advertising is playing a bigger role as audiences grow. And Sky’s new Adsmart system, where different people see different ads, is the first broadcast owner ad product to challenge the targeting monopoly enjoyed by the likes of Google.

What’s coming next in the great media revolution? It could just be Britain’s ITV. Malone’s Liberty now owns a 6.4 per cent stake in ITV, acquired for £481m from BSkyB which bought it a few years ago to thwart a merger between ITV and….Virgin Media.

Malone says it’s an investment but a tie-up with ITV would make sense now, as it did then. ITV, now valued at £8.3bn following some good years under boss Adam Crozier, is still under-powered in digital and pay-TV. But it still has big audiences and advertisers willing to pay a premium to reach them, plus an enticing programme library.

Surely another bid for ITV can’t be far away? Malone has to wait six months now after saying he wouldn’t bid but he might not be the only game in town.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.

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