Rupert Murdoch loses BSkyB bid, may lose more

A protester wearing a Rupert Murdoch mask demonstrates with a David Cameron puppet outside the apartment of the News Corp CEO on July 13, 2011 in London, England.

Kai Ryssdal: Rupert Murdoch didn't get to be a billionaire by walking away from a fight. But today the head of News Corp. did just that. He bowed to immense political pressure and abandoned one of the biggest deals of his career, a plan to buy full ownership of the U.K.'s biggest television network, BSkyB.

From London, Stephen Beard has more.

Stephen Beard: For 40 years, Murdoch ran rings around British politicians and regulators. With 40 percent of the British press, he was courted and feared. Today, that spell was finally broken. Murdoch dropped his bid for BSkyB.

Ed Miliband, leader of Britain's Opposition Labour Party.

Ed Miliband: This is a victory for people up and down this country who have been appalled by the revelations about phone hacking, who have thought it is beyond belief that Mr. Murdoch could -- when this criminal investigation is going on -- expand his stake in the British media.

Murdoch was desperate to buy the 61 percent of BSkyB that he doesn't already own. His newspaper revenues are declining. But the TV station is churning out cash. To get his hands on that profit, he needs full ownership of the company. Today's decision is a bitter blow, but analyst Ivor Gaber thinks Murdoch may yet bounce back.

Ivor Gaber: Never underestimate Rupert Murdoch: he's a brilliant businessman, resourceful, imaginative and he showed himself in the past to have the ability to outwit most.

But Murdoch could be ousted as CEO. News Corp.'s share price has fallen 20 percent due to this crisis. American shareholders are grumbling. Media analyst Roy Greenslade -- himself a former tabloid editor -- does not believe Murdoch will recover.

Roy Greenslade: He's 80 years old. If he was a young, vigorous man, he might be able to get back on track. But I think he's damaged goods, and it's really difficult to believe that the damage can be undone.

Everything now depends on what happens in the U.S., where he has his most valuable assets. A Democratic senator has called for an inquiry into possible phone hacking in America, and whether News Corp. snooped on the families of the victims of 9/11.

In London, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.
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As readers come to understand the ethical lapses of the Murdoch media empire, they should also reflect on the Murdoch companies US holdings (in case anyone is unaware), which include: Fox News Wall Street Journal New York Post

What will be eventually uncovered in the U.S., not currently carrying U.S. politician's in his hip pocket as in the U.K., will be plenty of fodder for criminal investigation, not the least of which will be the "off-shoring" of $10B that he's made here, and the $5B in tax rebates that he collects. When this tap runs dry, it's over for this media fat cat!!!


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