What the hell is going on with Rupert Murdoch?
Following talks to sell parts of his empire, Raymond Snoddy wonders if the media mogul has launched a complex, three-dimensional chess game, or is simply succumbing to old age
Just when we thought we knew that Rupert Murdoch was a rather predictable creature whose business manoeuvres could be reliably forecast, he changes the rules.
Murdoch is a buyer not a seller and across the years he has been prepared to spend eye-watering amounts – often involving large premiums – to get assets he has really wanted.
He has been a builder rather than an asset stripper and from the early moves to Hollywood Murdoch aimed to complete the value chain from film concept at the studio through television and satellite to the consumer. It was the path to the future.
Though he has always had conservative social instincts and welcomed Brexit and Trump as great triumphs, at heart his political initiatives have always been about one thing – the pursuit of the institutional survival and greater glory of News Corp and its successors.
It has also long been his ambition to hand over a powerful media legacy – the business he single-handedly created – to those of the next generation who had the interest and the ability to take it on.
Sons James and Lachlan appeared to be very interested and committed – the legacy secured.
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Now we hear the Murdochs have been in serious talks about selling the studio, television and satellite businesses, with the exception of Fox News and Fox Sports, to the much larger Disney organisation.
For the moment the Disney talks do not appear to be live because of a lack of agreement on price – but never say never in mega-billion deals like that.
The talks are particularly surprising given that any deal would have to include unresolved hanging bits such as the £11.7 billion 21st Century Fox bid for the 61 per cent stake in Sky it does not already own, a deal currently before the Competition and Markets Authority.
So what on earth is going on?
Rupert, who is 86, could simply be getting tired of it all and is happy to be increasingly distracted by new wife Jerry Hall. Unlikely, and anyway, in such a case he could simply have handed over more power to James and Lachlan and started to enjoy a well-earned retirement.
Another more rational possibility is that he may have concluded, or been convinced by his sons, that Fox is simply too small to compete with the media giants of the new world – Amazon, Facebook, Google and Netflix.
The fact that there was an aborted attempt to buy Time Warner and that James Murdoch repeatedly emphasises the importance of scale in the international streaming business, argues strongly for such a possibility.
Yet can things really be that simple – an abject Murdoch surrender with only the most perfunctory of final battles?
There is another possibility: that Rupert Murdoch has neither succumbed to age, changed character or run up the white flag.
He could just as easily have launched a three-dimensional chess game, stirring things up to see how the pieces fall.
It was strange that the Disney talks should have leaked, or been leaked after they were apparently over.
It is a very effective way of either putting up the “for sale” sign, trying to re-open the Time Warner talks or attract attention from any other potential merger partner. It says Rupert Murdoch is prepared to parley.
Somewhere in all of this Rupert Murdoch is likely to have an angle, and a plan B and Plan C.
There are many arguments against a straight sale at the moment.
Would anyone buy while the fate of Fox’s bid for Sky hangs in limbo?
The decision to refer the entire deal to the CMA was the correct one and although ultimate clearance is the likely outcome, with regulators you can never be sure.
Those who want to block the Murdoch takeover – or would it be the Disney acquisition by then – should ponder what they wish for.
The clear warning by Sky that the future of Sky News would have to be reviewed if the 24-hour channel “unduly impeded merger or other corporate opportunities” raises the stakes.
Sky could be bluffing when it warns the CMA should not “simply assume the continued provision of Sky News and its current contribution to plurality absent the transaction.”
Leaving aside the appalling use of the English language this is merely a statement of fact rather than a bluff. If the loss-making channel has to be sacrificed to get a deal through – it would be done.
Indeed the Murdoch haters have a lot to lose here; a loss that goes beyond leaving the BBC with a 24-hour television news monopoly in the UK.
If all the 21st Century Fox assets were to go to another, how viable would the news and sport remnants – Fox News and Sports in the US and the newspaper business in America, the UK and Australia – be enough to hold the permanent attention of the Murdoch brothers.
Newspapers will not be sold while Rupert is alive but after that how committed will James and Lachlan be?
What an irony it would be if those who attack the over-weaning power of the Murdoch empire should eventually suffer the loss of not just Sky News but the loss-making Times because of the increasing weakness of that empire.
Could it really be that what Murdoch has created will be demolished within his lifetime or very soon after.
It’s entirely possible because there is little chance of 21st Century Fox finding a way of matching the firepower of Google, Facebook or Amazon.
Murdoch must rue the day he turned down the option of a 5 per cent stake in the early Amazon for a relatively trivial sum. He didn’t see how it could ever be profitable.
Rupert Murdoch may indeed be heading for the final curtain and if so will depart with little more than a whimper, but it’s just as likely that there will be a late twist in the plot and he will find the unexpected move that will at least earn him an honourable draw.