What Rupert wants Rupert usually gets and his latest bid for the 61 per cent of Sky his Fox company doesn’t already own will almost certainly succeed. Although the bid, at 10.75p, a 40 per cent premium to the recent, rather depressed, share price will probably need to be sweetened a bit. It values Sky at £18.5bn, which is arguably more than it’s worth.
Why? Well the days of Sky minting money – as it was when Murdoch’s last bid was undone by the phone-hacking scandal at his News of the World – have gone even though it’s a more substantial business having bought Sky Germany and Italy from Fox, in best Murdoch style.
Sky’s fortunes were built on sports rights, mainly football, and now it faces competition from the likes of BT. So sports rights are much more expensive and Sky has fewer of them. There’s some evidence that football is losing its place in the nation’s affections, with audiences for Sunday games down. Sky has been culling some of its vast team of football reporters recently.
Then there’s the likes Amazon and Netflix, offering a premium alternative to the bundled model Sky uses. Amazon may well compete for football when the next round of rights comes along, as may Apple and Google.
Some shareholders are saying the deal is a stitch-up because James Murdoch is CEO of Fox and chairman of Sky. So it is but shareholders should take the money anyway.
Is the British ad market likely to change in the event of a Murdoch takeover? Unlikely; Sky sells a number of other digital channels including Discovery’s but there’s no obvious way of hiking rates.
Controversy is never far away from the Murdochs of course so anything could conceivably happen. But it look as though Rupert will finally own all of the ground-breaking satellite broadcaster he pioneered.
